Recently I had an executive from a small nonprofit in Kansas ask me how to improve organizational sustainability in the New Year. There have been a lot of predictions regarding how the new tax legislation will impact nonprofit organizations. Some predict that it will be even more difficult to effectively raise money in the new financial climate. I don’t believe it will be all doom and gloom, but it is wise to constantly assess what we are doing and look for opportunities for improvement.
Back to the question at hand, I have found over my career that effectively identifying major gift prospects is a precursor to consistently achieving funding goals while building sustainability. Finding those who will support your work at a higher level financially gives the organization more flexibility to make strategic decisions that move the mission forward. When you have a strong base of support, you can operate programs with a level of certainty and allocate resources effectively. So, that leaves the million dollar question – how do we find major gift prospects?
First, we should probably define ‘major gifts.’ This is the easiest part. A major gift is whatever you decide it to be. Different organizations will define a major gift differently. A large group, like Harvard University, might use $25K or $50K, or even more. A small organization might define a major gift as $500 or $1,000. For the purposes of this article and since we are small organizations, let’s use $1,000 as the threshold.
To get more major gifts, the first thing we must do is to make a list of prospects. Even a small organization could have hundreds of donors in their database. In most cases, all of those people are not able to make a $1,000 gift. So it is important to target the most appropriate people so that you can develop a strategy. I like to use the AAA method for prospect identification.
When I am building a prospect list, I try to identify those who fit with the three A’s. The three A’s are: Affinity, Ability and Access. First of all there is Affinity. For someone to make a major gift, they need to like your organization and/or cause. They need to have a respect for the work that you do. They must believe that you are able to create impact. They need to see you as trustworthy and a good steward. If the prospect likes your charity and/or believes in your cause, they may be a good candidate for a major gift solicitation.
The next “A” is Ability. No matter how much the donor loves your organization, they need to have the ability to make the gift for which they are being asked. This requires fundraisers to do their homework. Good prospect research strategies will help you to make a decision on the appropriate ask amount. There are other factors that can impact Ability too, such as the timing. If you need a $10,000 gift in cash by tomorrow, there are going to be fewer prospects than if you request $10,000 over 3-5 years. I often ask donors to make a gift in a range. Sometimes, even though we do our research, there is still a question about what is really feasible. Asking someone for a gift between $1,000 and $5,000 allows the donor to help guide you to the right number.
Let’s say you have identified a prospect who loves your mission and they have the capacity to make a major gift. That is great, but you still need the last “A” – Access. I am sure that you can think of five people, off the top of your head, who could give your charity a million dollars today without causing their family a hardship. Jeff Bezos. Bill Gates. Mark Zuckerberg. Phil Anschutz. Pat Stryker. I could go on and on. Although these people have the Ability to give to your charity, and may also have Affinity for the work you are doing, you typically need to be able to get a meeting with them if you are going to get a major gift. Access is a critical part of the major gift process. The good news is that you do not necessarily have to have the direct access yourself. This is an area where Board Members, Committee Members, volunteers, and other donors or friends can be of help to you. And if you use someone to gain that access, like a donor or volunteer, consider involving them in the ask process. You always want to have the “asker” be someone to whom the prospect has a propensity to say yes.
There are, of course, other things that must be considered to obtain major gifts. For example, you must ask the prospect to support the right project at your agency. If they are interested in senior citizen issues and you ask them for a gift to underwrite services at your preschool, you may not get the gift. Keep in mind that the the three “A”s are a tool to help quickly pre-qualify prospects so that you can develop the appropriate strategy to engage them.
It may sound like major gift fundraising is a lot of work. Well, it is. However, the hours put into engaging a major donor have the ability to provide a significant ROI once you have them on board with your charity. And with proper stewardship, that work can pay off for years to come. So, use the three “A”s to identify prospects who can make your major gift fundraising really take off. This strategy helped drive our organization to a 38% increase in the number of major gifts in 2017 – and it can work for you, too.
So, what are you going to do this week to improve your major gift fundraising? You can comment below, I’d love to hear your thoughts.
Best wishes for a successful year.