Acquiring and Stewarding Major Donors | A Nonprofit’s Guide
Every nonprofit organization needs funds to keep its doors open. And those funds can sometimes appear so elusive and difficult to come by, and the process so tedious. With so many funding sources to choose from, it’s no wonder nonprofit professionals are sometimes baffled and stuck. Out of all the funding sources, major donors can sometimes be…
Every nonprofit organization needs funds to keep its doors open.
And those funds can sometimes appear so elusive and difficult to come by, and the process so tedious.
With so manyfunding sources to choose from, it’s no wonder nonprofit professionals are sometimes baffled and stuck.
Out of all the funding sources, major donors can sometimes be the most intimidating to fundraisers and nonprofit marketers.
However, major donors can be an excellent source of funding for nonprofits – especially since it’s crucial for nonprofits to diversify their portfolio of supporters.
When it comes to major donors, both the process of acquisition and stewarding is equally important.
Sadly, for far too many nonprofit organizations, while they might invest in the acquisition, stewarding major donors is merely an afterthought.
These tips and insights will help you start thinking about how to both find major donors and steward them effectively, expanding your reach and impact.
Who are Major Donors?
Major donors are your top donors with the highest contributions. Contributions made by major donors could be cash or in-kind. Typically, your major donors make up for the majority of your total donations. This could be 50% to 75%, depending on the distribution of the donation amounts. The easiest way to find out major donors is to maintain a donor database that shows you the top individual donors.
But the question remains: how to identify major donors?
Here’s how to do it:
Determine what your major gift level is. For example, if it’s $500, individuals who give $500 or more to your cause are your major donors. In our next section, we have explained what a major gift is.
What Is A Major Gift?
Major gifts are the largest donations a nonprofit organization receives. Since nonprofits vary so greatly in size, some nonprofits might consider a gift of $5,000 to be major and some might consider a gift larger than $100,000 to be a major gift.
What Is Major Donor Acquisition?
Major gift acquisition refers to the process of identifying potential major donors, reaching out to them, building a relationship with them, and then making the ask.
This process can broadly be split into:
Prospecting Major Donors (researching potential major donors – usually based on wealth and philanthropic indicators)
Cultivating Major Donors (connecting with and building a relationship with major donor prospects – usually through get-to-know-you visits, meetings with the leadership, informative luncheons, and more)
Soliciting Major Donors (making the ask – usually in person)
What is Major Donor Stewardship?
Major gifts stewardship centers around acknowledging, recognizing, and thanking your major donors.
Proper major donor stewardship is one that ensures the retention of a major gift donor in the long run.
How To Acquire Major Donors: The Ultimate Major Donor Fundraising Strategies for 2021
These fundraising strategies will help you in specifically attracting major donors to your nonprofit organization.
Before you dive into the major donor fundraising strategies for 2021, here’s a Donorbox webinar where Jay Frost, the president of Frost Fundraising talks about the art of acquiring major donors. He explores the strategies to discover the major sources of support, identify them through free/low-cost tools, and finally, build lasting relationships with them. This can be especially helpful for small nonprofits looking to gain major donors for their cause.
1. Understand Why Donors Give To Your Organization
Asking your donors for their input and feedback is not only a great way to show your donors that you value how they feel, but is also a good way to acquire meaningful content that you can then use to acquire and steward your donors.
One way to accomplish this is by sending them a survey. With major donors, however, phone calls or emails might be appropriate.
Some questions to ask your existing donors that may help your organization’s major donor acquisition strategy may include:
What initially attracted you to our organization?
Why did you decide to give to us and not another cause/organization that you care about?
Was there a specific campaign or a campaign element that made you want to donate?
Was there a specific campaign or a campaign element that made you give a larger gift?
How would you describe our organization to a friend, relative, or co-worker?
What is important for you to know about an organization that you support?
Once you understand why your donors give, and particularly why your major donors give, it will become easier to craft an effective major donor acquisition strategy and tactics.
2. Prospecting Matters
Prospect research allows your nonprofit organization to learn more about your donors’ personal backgrounds, past giving histories, wealth indicators, and philanthropic motivations.
This way, you can effectively evaluate a prospect’s capacity to give, as well as their affinity towards your organization.
Starting with the basics, past giving has been proven to be one of the greatest indicators of a prospect’s willingness to donate in the future. Real estate ownership and stock holding both also help determine wealth and predict a likelihood of future giving.
Nonprofit involvement and donation to other nonprofits are also useful indicators.
It’s important to note that complete prospect research provides a more accurate assessment of potential donors than wealth screening alone.
A comprehensive and well-executed prospecting research can make or break your major gift acquisition.
Some quick tips to help you out with major donors prospecting:
Set your prospecting and fundraising goals and your screening timeline.
Choose your parameters: Here are some of the examples:
Past giving to your nonprofit,
Past giving to other organizations,
Nonprofit involvement as a board member or trustee,
Real estate ownership,
Stock holdings, and more.
Choose your system:
How are you going to go about your prospecting?
Are you going to use a prospect screening company such as DonorSearch or have a member of the team dedicated to it?
What tools will you use if so (e.g. LinkedIn)?
Cover your basics: See if there are patterns in your current major donor base. See if existing major donors have something in common (e.g. industry, role, geographical location). Go to your current donors and see if you can move them into larger gifts.
Use your informal network to identify prospects. Also, look at donors who give to similar organizations and causes. Don’t forget to look at those who give to political causes too (donations to political campaigns are another strong indicator that a potential supporter is wealthy).
When prospecting, don’t forget that major donors most often need to somehow be linked to your cause, be interested in your cause, and be able to give.
3. Leverage Your Network
When it comes to acquiring and soliciting major donors, your best chances are to reach out to the already existing network of supporters, rather than cold calling or cold emailing.
Your existing donors already support your cause and have a commitment to your organization. They are likely aligned with your values and can (hopefully) testify that you are putting their donation dollars to good use.
You could also ask your already existing major donors for help. Ideally, ask your major donors to bring friends and colleagues they would like to introduce to your organization who they feel might have an interest in your mission. Having an in-person meeting where your donor can make introductions will be the most effective.
Pro tip: Don’t overlook your board. Even if they are not major donors themselves, your board members often have the kind of connections you need to reach out to potential major donors.
Chances are, you have access to a bigger network than you think. Do a connection mapping exercise where you list and map out all the people you know: your trustees, ambassadors, employees, volunteers, and more, and start digging around. Who do they know, where do they work, who are they married to, where have they gone to school? Use LinkedIn to help with this.
4. Create a Branded Major Donor Program
Major donors need to be carefully solicited and nurtured before they’re asked for a contribution. And when they’re finally asked, it’s highly likely that they’d love to be a part of a major donor program.
People like to feel like they’re part of something special and exclusive.
Create a branded major donor program, with its own logo, tagline, or at the very least – a name. Set a donation amount parameter (e.g. anything larger than $25,000 is classified as a major gift for your nonprofit organization). This not only helps create the program as it is but might also encourage some people who were considering making a smaller donation to donate more. For example, someone who might have been considering a $20,000 gift might now give $25,000 to become part of the program.
In addition to branding it, think of ways to enrich the program. Find ways to meaningfully engage its members and make them feel special. For example, you can organize events or program tours exclusively for the members of your major gift program. This will also contribute to donor stewardship.
Pro tip: Really think of the incentives. For instance, if a major gift donor gives a significant contribution to your campaign, they may want to have the opportunity to name a wing in the local hospital they’re helping fund.
5. Organize a Special Event for Your Major Donors
A special event is not necessarily a fundraising event. In this case, you need to host an event to make your current major donors feel important.
This event will be dedicated to acknowledging their major contributions and thanking each of them. You should ask them to bring their interested colleagues, friends, or family to the event. Some of them could turn out to be your potential major donors.
Remember if they have come to attend the event, they truly love your cause. Hence, keep the event focused on your work, impact, and mission. If possible, make some of your beneficiaries a part of the event. E.g. local school kids, a family you might be helping, etc.
When your current and potential major donors meet them in person, the emotional impact increases tenfold. That eventually encourages them to give more to your cause.
If you’re worried about the pandemic, use a virtual event platform to run your event. Facebook Events is a convenient way to get started. A video conferencing app like Zoom or a virtual event management solution like Airmeet can help you host the event.
6. Use Company Gift Matching to Increase Major Donations
Through the company gift matching program, employers match their employees’ donations to charitable organizations.
Every company has its own rules and regulations regarding the maximum/minimum threshold. Sometimes they do not match the entire amount, but still, contribute a large part of it.
Now imagine donations from your major donors can actually be doubled with this program. Even while prospecting for your major donors, you can check the potentiality of it.
Sometimes your donors don’t know about this feature. It’s your responsibility to make it happen.
Donation software like Donorbox helps you put the company gift matching feature right on the donation form, so it is easy for donors to find. It also gives your donors all the necessary resources to go through the simple process at their end.
Donors increasingly want to see as tangible results and outcomes as possible, and rightly so. They are giving away their hard-earned money to help support your cause.
More so than other individual donors due to the size of their gift, major donors care about data and numbers.
You need hard evidence that you’re a good steward of your funds and are working towards accomplishing your mission.
This is why it’s become more important than ever to be a data-driven nonprofit.
As you make your case, include your nonprofit’s accomplishments and the actual mission-based results of major gifts in the past. Show them that $X helped you accomplish a very tangible outcome. Major donors want to know that they are donating to a nonprofit that will use their money well and that their money will go a long way.
8. Don’t Rush It
Don’t rush major gift solicitation. Sure, you will meet an odd major gift prospect who will jump right in and give straight away, but those situations will be few and far between.
A more common scenario is that your major gift solicitation will take time and patience. Enter into each major donor cultivation with the understanding that you’re in it for the long-haul.
Even after you secure the gift, if you want to keep that major donor returning and incrementally upping their gift size, your stewardship will have to be just as patient and diligent as your solicitation.
Tips for Stewarding Major Donors
The 8 tips in this section are effective in the successful stewardship of your major donors.
If you don’t have the capacity to hire a full major gifts team, or if major gifts are not yet the priority – hire a major gifts officer.
A major gifts officer would essentially take care of the full major donor acquisition process – from prospecting to stewarding and upgrading. You’ll want an experienced fundraiser in the role.
Pro tip: Veritus Group suggests the following formula to help you determine how to hire a Major Gift Officer.
“Do you have 450 donors who have given $1,000+ cumulatively in the last 24 months? If you do, you can hire a full-time major gift officer. The reason for 450 donors is that once the MGO (Major Gift Officer) goes through a qualifying process, only about 150 (or 1/3) of those donors will want to relate in a more personal way. 150 is the maximum number of donors a single MGO can cultivate successfully.
Now, let’s say that initially, those 150 donors have a total value of $200,000 in immediate giving potential. And let’s say that with salary, benefits, travel, etc, the MGO will cost $100,000. You’re starting at an initial 2:1 return on investment (ROI). I know that seems low for major gifts but remember – you start low and build it. The VISION is that over time, say in five years, that caseload will grow in value to 6 or 8 or even 10:1. And donor attrition will drop from 40% to 5% a year. This is how it grows.
Now, what if you look at your database and you only have 250 donors that meet the cumulative level of $1,000+ in the last 24 months? Well, consider hiring a part-time MGO, or allocate 50% of a current staff member to it.”
Tip 2: Create an Exclusive Major Donor Society
An exclusive major donor society is nothing but a members-specific club for your major donors. It’s a good way to regularize major gifts as well as engage the donors.
Here’s how major donor society can help you in the stewardship process –
Your major donors feel special and appreciated. That encourages active participation in the future.
Share your day-to-day work and impact details with the major donors. With real-time impact data of their contributions at hand, they’ll tend to give more.
An exclusive peek into the bigger picture on a monthly basis can make them feel the pride of being a part of your noble mission.
Set a minimum donation amount for every member of the society. It makes them give more than they otherwise would.
Give them access to your online and offline events. Encourage them to volunteer if they wish to. It connects them more emotionally with the cause.
Host exclusive lunch or dinner events for them with board members or leadership teams. The happier they are, the more they give to your nonprofit.
Tip 3: It’s Not Only About The Money
Don’t get me wrong. Money is essential to a nonprofit’s survival. And it’s something that major donors can bring to the table.
But truly lasting, fruitful partnerships between major donors and nonprofit organizations are about much more than money and can’t be bought with a large check.
If you want to sustain a strong relationship with your major donors, you have to invest on a personal level.
As nonprofits work through a traditional donor life-cycle with donors, stewardship becomes the linchpin — the central cohesive element on which everything else hinges.
Tip 4: Have a Stewardship Plan
It is important to show your major donors just how special, valued, and appreciated they are. Investing in stewardship techniques and developing strong relationships has been proven to lead to more frequent and larger gifts
Of course, it’s important to steward all donors, not just the top tier of your donor pool.
Create a strategic stewardship plan that incorporates all giving levels and you will increase gifts across the organization.
Listen to your major donors’ various needs and interests and customize a stewardship plan to maximize these relationships.
For example, your major donor stewardship plan might include:
Major donor stewardship events (e.g. inviting your top 10-20 donors to breakfast with organizational leadership and your board of directors);
Strategy luncheons (e.g. inviting your major donors to contribute to conversations about the direction and strategy of your nonprofit);
Sending our cards via direct mail (e.g. birthdays, promotions, and more);
Informal annual report (letter describing annual accomplishments and impact on your constituency);
Gala dinners (in-person party/dinner usually featuring a meal and often an awards section).
Pro tip: Here are some questions to help you assess your current stewardship efforts:
Do you have a written plan?
Does your plan include written, phone, and in-person components?
Do you have a dedicated budget for stewardship?
Are you innovative and open to change?
Do you look for ways to better acknowledge, recognize, and report to donors?
Do you gather donor feedback?
Tip 5: Communicate, Communicate, Communicate
While this is true for any donor group, communication is essential to good major donor stewardship.
If you have a major donor program, you already have a group to receive a series of major gift-related communications. If not, at the very least, create a mailing list with your major donors and major donor prospects.
Those two groups can then each have a certain drip email stream and be sent specific direct mailings.
You can even host appreciation luncheons with the major donors and key leaders in your organization.
Pro tip: Don’t get stuck in overly formal communication. You don’t only have to organize formal events to communicate with your major donors. Inviting a major donor to a quick tour of the program can have as much of an impact.
Tip 6: Show Major Donors Their ROI
Once a donor committed to a major gift, they’ll likely want to know what their return on investment is in terms of impact.
To do this,share with them about programs with great results that also speak to their philanthropic interests.
Communicate how much you’re spending and what that money is accomplishing realistically. Be transparent with your numbers. Share some of the nitty-gritty, day-to-day details of the work their contribution is helping fund so that they can visualize their donation in practice.
In addition to the numbers, show your donor how their donation is helping your overall goal.
Charity:water leads the way in terms of demonstrating impact. The New York City-based nonprofit organization consistently shows up on “how-to” lists and seminars as the top example of how to engage donors and raise funds through great content.
Charity: water does a great job overall of showcasing how each donation is contributing to the overall cause, for example, by providing GPS coordinates and photos of the wells it builds and sharing them on social media. Like charity:water, consider dedicating a portion of your website to communicating impact.
Pro tip: Send photos or videos that show progress and make the project and the donation more personal and ‘real’. Charity:water, which we shared above, does this exceptionally well.
Get creative with how you communicate donor impact to your major donors. For example, when the nonprofit Pencils of Promise, which builds schools in developing countries, hosted a Wall Street gala for wealthy donors, it provided VR headsets that allowed viewers to see inside a schoolhouse in rural Ghana. The event raised $2 million.
Tip 7: Set up a Public Donor Wall
A public donor wall is a virtual or physical wall that showcases the names of donors who contributed to a nonprofit campaign.
To successfully steward your major donors, you need to recognize them. The best and simplest way to achieve that is to put up a public donor wall.
Within this specific donor segment, many choose to remain silent. Do not, however, confuse this with a lack of generosity or a desire to forgo all recognition and stewardship.
Instead, it means you must be creative and expansive when considering stewardship for planned gift donors.
Create a comprehensive stewardship plan for your deferred gift donors. A touch every now and then shows your continuing gratitude and welcoming disposition.
Over To You
In summary, strategic and effective major donor acquisition and stewardship increase your funds and your organization’s image, reputation, and priority with both current and future donors.
When you steward your donors well, they will feel the remarkable power of their generosity and they will be happy to keep giving for years to come.
However, don’t expect to simply sign a contract and with that ensure a meaningful, ongoing, mutually beneficial relationship. You have to put in time and effort to make it work, but really good partnerships are worth it.
Choose Donorbox as your donation system and check out our Nonprofit blog for more nonprofit resources and tips.
Frequently Asked Questions (FAQs)
In this section, we have answered some of the common questions you may have regarding major donors.
1. How do you identify a major donor?
To identify a major donor, you need to dive deep into the process of prospect search. Tools like Donorsearch will help you analyze your potential donor’s financial status. But at the same time, you need to determine if they’re likely to help your cause. All this requires skills and effort, hence you can hire a fundraising consultant for thorough assistance.
2. Why do major donors give?
Studies suggest that 65% of major donors give to transparent nonprofits. They like the idea of knowing the impact and the ability to designate donations.
3. How much should a major gift officer raise?
An experienced major gift officer should be able to raise at least an amount equivalent to their salary in the first year. For that, they need a strong donor database and active board members. In 3 years, this amount should increase up to 5 times their salary per year, or even more.
4. How do you attract major donors?
To attract major donors, first, you need to define the major gift level for your nonprofit. If you’re getting a few donations above $200 and others less than that, then $200 is the level. Accordingly, find out the list of your existing major donors. Based on this data, your major gift officer can strengthen your donor research, fundraising infrastructure, and marketing strategies to bring in more major donors.
5. How do you close a major gift?
Communication is the key to closing a major gift. You need to follow up with your major donor prospect on a regular basis and try different ways to keep them engaged. Don’t be shy to directly ask for a gift or donation and share the impact it will have. A professional fundraiser/ major gift officer can help you streamline the process.
6. How long does it take to get a major gift?
It depends on the size of the major gift and your prospect’s trust in your nonprofit. A $200 major gift will take you 1 to 2 meetings and a month at most. But if it is $2000, it’s going to take a lot more convincing, follow-up, and sometimes, as long as 3-5 months. Strong brand presence and relationship with potential major donors can be very helpful.