Major Gifts Fundraising With Hall Powell

My first encounter with major gifts fundraising occured when I helped a friend run for U.S. Congress. My background was in sales and sales management for the medical manufacturing and supply industry, I did not know anything about “fundraising” other than what most people think about when they hear the phrase, “asking for money for a good cause.” With that in mind, I was first trained by the political party as to how I would raise money for his campaign. For me, any contribution I could scrape up was a “major gift.” After the campaign, with the little experience I had in fundraising, I was invited to join a major fundraising consulting firm where I learned how to plan and organize “capital campaigns” for nonprofit organizations seeking to raise money for major projects e.g., new buildings, equipment, programs, and endowment. The funding for those “campaigns” required “major gifts” to ensure a successful campaign. Later I transitioned from consultant to Chief Development Officer for three major institutions where I learned that major gifts were not exclusive to capital campaigns. Major gifts were needed for operational, and program needs, along with occasional “special projects” throughout every day of my career in fundraising.

Major Gifts...How Do You Define Them?

My purpose in writing this article is to not only demystify the term “major gifts” but also to put the subject in context for successful fundraising.  My challenge, and opportunity, is to make this presentation relevant and interesting to those of you who are in small organizations, others in large institutions, and all in-between.

Before I go any farther, I will not refer to your organization as a “shop”. It is so common in many seminars and written materials for the speaker/writer to refer to your “shop”: “For, whether you are a small shop or a large shop, blah, blah…”  Small or large, you don’t work in a shop if you are a nonprofit organization.  A shop is a building where goods and services are sold, or where things are manufactured or repaired.

Okay, now that we have established that you are involved with an organization of unique importance to the welfare of the recipients of your purpose and mission, it’s important to define what dollar amounts major gifts are for you. The term “major gifts” could mean something different for every organization.

Major Gifts...The Big Picture

Every year, when the amount of philanthropic giving by Americans for the previous year is tallied, the results show the vast majority of philanthropic gifts are made by individuals: Seventy-five to Eighty percent (when you include estate gifts). While philanthropic gifts from corporations (businesses) and foundations are important, their percentage (15-20%) of the annual total of philanthropic giving is far less than individual giving. All three sources of philanthropic giving: individuals, foundations, corporations, are potentially prospects for major gifts. Individual giving is in the “Willie Sutton” category. When the famous back robber was asked, “Why do you rob banks,” he responded, “That’s where the money is,” In a very real sense, that is true of individual giving as it relates to where fundraising professionals should be focusing their fundraising efforts. Now I realize there are exceptions to what I am saying. Some programs will depend more on government and private foundation gifts; others will be primarily focused on special events as their primary source of philanthropic revenue. But, in every category (individual, foundation, corporation) there are major gift prospects for your fundraising efforts.

“Well,” you say, “You still haven’t told me what a major gift is.” You are right. Let’s do it.

Major Gifts Fundraising for Your Organization

A successful fundraising program is usually comprised of strategies to generate annual philanthropic support for the organization. Typically, routine charitable gifts would come from special events, direct mail, and grants, and many other potential creative opportunities (e.g., money jars in convenience stores).  Next, there can be special needs for philanthropic support for new projects or needs that require charitable gifts in addition to the routine annual gifts. For example, the organization might need to expand building space, or need a new or additional facility, or renovate existing space; there might be a need for a vehicle. There could be a need to fund a new program. These “special needs” might require a major gifts campaign (which some call a Capital Campaign) in order to raise philanthropic funds over-and-above the annual fundraising needs. Remember, major gifts aren’t only for “capital campaigns.” Major gifts can also transform your annual fundraising efforts.

So, what is considered a major gift for your organization? Example: It could be that a major gift for a small nonprofit with an annual revenue of $300,000.00, would be a $5,000.00 gift from an individual, business, or a foundation. For a larger nonprofit organization, with an annual revenue of $2,000,000.00, a major gift could be a minimum of $50,000.00. What is considered a “major gift” is relevant to the size of the gift as related to the need of the organization and its ability to secure it. How do you secure a major gift?

5 Keys to Major Gifts Fundraising

Broadly speaking, there are five non-negotiable keys in the major gifts fundraising cycle: (1) Case for Support (2) Prospect Identification; (3) Cultivation; (4) Solicitation; (5) Stewardship.

Case for Support

major gifts fundraising case for support A successful fundraising program assumes that you have a compelling Case for Support. This is true for securing annual support as well as major gifts. If there is not a compelling need for funding, why should anyone want to give their hard-earned money? So, for the sake of this article, we will assume that you have a Case for Support document, in writing, that can be shared with a potential donor. The case will highlight the history of the organization, what you do, what you have accomplished to-date, and what you need to do, and how you plan to get it.

Not only do you need a compelling Case for Support, you also need a sound plan to back it up. A case backed by a sound plan, which includes total financial transparency, will encourage philanthropic support.

Prospect Identification

prospect identification for major gifts fundraising

Prospecting

Let’s refer to Willie Sutton again: Where is the money? We know that statistically, most of it, philanthropically speaking, is held by individuals. We won’t ignore businesses (corporations) or foundations, but you must make individuals your primary focus for major gifts prospecting.

Your database

The logical place to start is with your own database – the people who you already know. You (or others on your staff or Board) will know who has the potential for “large” gifts or who know other people who do. Put together a de facto prospect review committee to “confidentially” get together to assess a created list of potential major donors, people who, if so inclined, could make a “major” gift. As you go through this process. Members of the group/committee will offer new names that don’t appear on the prepared prospect list(s).

Next, you could (I don’t want to imply that the following is mandatory) take the final list of potential major donors and combine them with your entire database of donors and conduct…

Database Research

While this exercise is not mandatory, it could be the right thing to do. There are internet resources, connected to the Experian database, that can provide you at a reasonable cost all (and more) you need to know about a person’s financial ability (and perhaps propensity) to make a major gift. Wealth capacity is what you will be searching for. I simply mean one or two steps: First you can do a general search for new (unknown to your organization) individuals who have sufficient net worth to make a major gift, if they were so inclined. In this way, you might discover “the millionaire next door.” One of the common complaints I hear from fundraisers is that “We (other nonprofits) are all going to the same donors for major gifts.” There is a lot of truth in that statement in many communities. By doing a wealth search for people with net worth of $1 million+ in a realistic radius of your service area will uncover valid major donor prospects who are not being solicited by other nonprofits.

Next, you could append (upload) names from your own prospect research, as I described above, and find out those prospective major gift donors, who are already giving to you, have the potential of giving a lot more.

You could use the donor search resources that can be purchased at a reasonable cost, for one time to get started on searching for prospective donors, or you could use them periodically if needed. When I was the Chief Development Officer for three different medical centers, I would run a database wealth search every six months so that I could find out about wealth potential from new donors during the six months of fundraising activities.

Lists

Most Chambers of Commerce publish lists of members by categories, e.g., Banks, Trucking, Manufacturing, etc. Lists should be periodically reviewed for new companies and new executives of companies. There are other resources like newspapers and local magazines that could also reveal potential donors. Remember: major gifts can come from businesses and foundations.

People who know people

I mentioned above that convening a group of people who know people is a good resource for identifying potential major donor prospects. I want to come back to this for a moment. People generally don’t like to talk about their money, but as a professional fundraising consultant and chief development officer for a combined thirty-nine years, I learned that many people like to talk about other people’s money. I would ask someone with whom I had a good personal relationship, and was already a faithful donor, “Who do you know that has the ability to make a major gift, and would, if they knew what you know about our organization?” I generated a lot of new major gift donors by using that technique.

Special Events

Do not miss the opportunity to use special events as a prospecting tool for major gifts. Special events, while they are produced for the purpose of drawing attention to your organization and raising money, don’t let it end there. Use them as cultivation tools. People attend events. Although they may give a gift at an event as a result of ticket sales, bidding at an auction, or even from a direct ask, many can still give more, and perhaps larger gifts. Review the invite and attendance lists. Do your prospect review as we have discussed earlier in this article. Use an event as a means to the end goal, major gifts, not as an end within itself.

Earning the Right to Make “THE ASK”

earning the right to ask for a major gift The next step in raising major gifts is to build relationships with the individuals on your lists. This stage of the fundraising process is sometimes called cultivation. I call it “Earning the right to make the ask.” We can never be presumptive about someone’s generosity or largesse.

Presuming, you have a compelling Case for Support, fundraising is about relationships

Successful fundraising professionals (I’m not talking about call-center fundraisers) are individuals who consider themselves as “honest brokers,” who help donors determine the best way to satisfy their need to give, not the organization’s desire to get. To be an honest broker you must get to know your prospective donor, or current donor, well enough to know what their desires and likes are. Sometimes, that might mean that you actually let them, or even encourage them, to give to another cause or program because, for the moment, it is the best gift for them.

For example. Years ago, when I was the Certified Development Officer for a major medical center, we were in a major fundraising campaign to fund the construction of an advance cancer research center. It was a $37 million goal. I had a prospect, who was already a major donor to the medical center’s foundation. I went to him for a “lead gift” to our comprehensive campaign. After my presentation, he said: “I think this is an important project, and I want it to be successful.

However, my heart is not in that program. When you get ready to build the new children’s hospital come see me.” I thanked him for his candor and encouraged him to support the children, because that was where his heart (interests) was, and a gift to children would be the “best” gift for him. He later made a very large gift to the children’s hospital.

Building strong major donor relationships

Building relationships with major donors is a process, and the process should be ongoing - a never-ending quest to know your donors better.

As a major gift fundraiser, it’s your responsibility to build relationships with the individuals within your “portfolio” of major gift donors and donor prospects. In a small nonprofit, your portfolio will probably be the entire list of donors and prospects. For those in larger organizations, there could be one or more development officers who “steward” a list of donors and prospects that is known as her or his “portfolio.” We will sort out the word steward later in this presentation.

You will probably know many of the people in your portfolio and there will also be those “prospective donors” who you are getting to know better along with the others in your portfolio. Whether you know them or not, you need to think strategically about how they might consider supporting your organization in a bigger way, resulting in long-term support and potentially larger gifts.

To do the above steps, you need to have an individual, written plan of care for each donor or prospective donor. The plan will have various points-of-contact whereby you will make contact with them, or involve them in events or activities, whereby the person(s) has some form of contact with you and/or the organization: they are learning and experiencing more and more of what your organization is all about. This kind of exposure will not only educate, it will also help to draw them intellectually and emotionally into the organization. It is all part of earning the right to make the ask. Informed donors can make right choices for themselves. We owe them that opportunity.

You should create a plan for each of the individuals in your portfolio. The plans will be similar, but you’ll need to personalize them depending on your relationship with each person.

There are some basic considerations in establishing a relationship of trust with existing and prospective donors. They are:

  1. Know your donor.

    One of the things I have observed in my many years of major gift fundraising, as it relates to building relationships with successful people, too many fundraisers are just like most other non-fundraising people: They don’t like to make a face-to-face ask for a major gift. For some, even asking for the cost of a special event ticket, or a sponsorship gift for an event (e.g., Hole Sponsor for a golf tournament) is intimidating. I think there are many psychological and social reasons for that, but I believe the primary reason is that many (maybe “most”) are not comfortable in talking with “people of means” because they don’t know how rich people think. They don’t understand what is “normal” for wealthy people: what motivates them, their lifestyles, making money, spending money, giving money away, etc.  How do you overcome the “anxiety” of making a face-to-face ask for a major gift?  Get know them. How?

    Set up an appointment for the purpose of getting to know them better. Have a meeting with them that is not about asking for money. Have a cup of tea or coffee, or whatever social setting is appropriate, and ask questions like:

    • “When you are considering what nonprofit organization to support, what do you look for?”
    • “How do you like to be approached by someone who wants to ask you for philanthropic support?”
    • Is there anything about my organization you would like to discuss? Is there anything you don’t know about or are concerned about?
    • How do you prioritize your giving?
    • Who do you want asking you for philanthropic support?
    • Is it true that “people give to people” or is the charitable cause more important as a basis for making a giving decision?

There are many more good questions that could be asked as “get-to-know-you” questions, but I want to strongly emphasize that you begin your conversations with questions about your donor and his or her family, their interests, not yours. And, be a good listener. As my ancestor said:

“If you make listening and observation your occupation, you will gain much more than you can by talk.” Lord Robert Baden-Powell

Meet with your donors and listen your way to success.

  1. Invite your donors to “come on campus,” to see your facility, your staff, your beneficiaries. For example: If your organization serves the homeless, or children, or older people, a donor actually seeing the population, or cause you serve, and how they are benefiting from the results of philanthropy, can be a powerful “Ah ha” moment for her or him. You could even invite them to be your guest at one of your events. Volunteering is a way to get people involved and educated about your organization. It is amazing to me how many volunteers are not asked to give money to the organization they are volunteering with. Of course, for some people, volunteering is the only way they can serve the organization. We love and need them too.
 
  1. Keep your donors informed. Updates about your programs and services can be communicated by phone, email, in-person, or handwritten notes. An old-fashioned, handwritten note can be very impressive these days of “everything technical.”

Asking for Major Gifts

You are ready to make a major gift ask when:

making the ask for a major gift

  1. You have a compelling Case for Support backed by a sound plan that has been reviewed with the donor prospect. Donors want to know that you not only have a valid need, but that you also have a plan for the acquisition and application of funds needed. The Case and supporting plan should have been reviewed with the donor prior to the ask for support.
  2. You have evaluated your prospect’s ability to give and what amount you want to ask for. You must know your prospective donor – their likes and dislikes and their financial capacity to make a gift at the level of giving you are asking them to consider (more about that below).
  3. When you know who is going to do the asking. Sometimes it is better to go to an ask appointment with two people instead of one person. Two people can support each other in the asking process (e.g., one reviews the Case and the other makes the ask). Whoever has the stronger peer relationship should make the ask. It is harder to say “no” to two people.
  4. You have the appropriate supporting materials: Case for support (to review and leave behind if necessary); Gift Acceptance Form (official document to record the gift (if it is a pledge or “Intent to Give”); Proposal Letter (If appropriate), and a Range of Gift Table (if you are conducting a major gift campaign).
  5. You are ready to make the appointment.

Scheduling your appointment

  • The biggest obstacle to overcome is the reluctance and anxiety to make the appointment call. If you have cultivated your prospect properly, they are not going to be surprised about receiving a phone call from you.
  • Set the appointment for the time and place of the donor’s choosing. The best place is usually on their “turf” (home or office) or in a neutral setting (e.g., coffee shoppe). Make sure it will be a “quiet place’ without distractions.
  • It would be preferable to have both parties present if the gift is going to be made by two people in a relationship. You might ask, “would (name of other person) be meeting with me also? If your prospect is a foundation staff person or a corporate representative, it would not be necessary.
  • Be sure you know what you are going to say before you make the call. You might even want to make yourself a script of basic sentences in order to feel more comfortable about making the call. For example:

    Hello, Tom. This is Hank. Do you have a minute (wait for the response)? Good, thank you. I hope you and Mary have had enough time to consider the need we have for support, and I would like to visit with you both to see where you are in the decision-making process. Would you have about 45 minutes next week?

    If “Yes,” then establish when and where.

    If “No,” then ask, when would be a good time to get back with them. Ask them if they need additional information. Don’t leave it open-ended.

The visit and the “Ask”

  1. Have a genuine, friendly, casual warm-up. As I mentioned earlier in this article, make your initial conversation about the donor. Show deference to them.
  2. Review the Case, if needed. You could ask them, “Is there anything in our Case for Support document that you didn’t understand or need additional information about?

    If “Yes,” address the need,

    If “No,” proceed to the ask.

  1. Be sure to ask for the donor for a specific amount of money, not just, “We hope you will support our need.” Donors need and want to be asked for an amount to consider. If you are not sure about a specific amount (e.g., $1,000.00) ask them for gift in the range of $500.00- $1,000.00. It could go like this:

    Mary and John, would you be willing to consider making a $1,000 gift to our new program (or whatever the need)? -or-,

    Mary and John, we are in need of strong support for our project. Would you be willing to consider of making a gift of $500 to $1,000.00?

    Many years ago, John D. Rockefeller, a wealthy industrialist, when asked to make a gift to a charity, reportedly said, “I don’t want anybody telling me what to give, but I do want them to suggest an amount they want me to consider.”

  1. Another absolute: Always try to make a face-to-face appointment with a potential donor. Do not make it over the phone or with a letter (much less email) unless it is a corporate or foundation request, and even then, try to make personal contact with a person in the company or foundation and have a conversation with them before sending a letter or proposal, when possible.

Ending the visit

  1. Summarize the discussion. Make sure everything about the gift and the process of giving is understood. Make sure any donor requests are honored or understood e.g., “In memory” of someone.
  2. Help the donor(s) to fill out the gift agreement if the gift is a pledge or “Letter of Intent.”
  3. If a follow-up is needed, be clear as to the need (e.g., time to consider the ask) and acknowledge the need with a promise to get back with the donor at a mutually agreed upon time.
  4. Always express gratitude for a gift commitment and even for a rejection, inasmuch as you should always thank someone for their time and the willingness to consider the ask.
  5. Send a Confirmation Letter after the visit to confirm what was agreed upon during the visit.

Donor Retention

Research indicates first time donors only donate again about 20% of the time. However, if a donor makes a second donation, the chance of them continuing to contribute is 60%.

major gift donor retention

Welcome Them

Work quickly to welcome and engage new donors as soon as they make their first donation. Within 48 hours (maximum time) of their gift, send a personal thank-you card or a handwritten note from a leadership staff member or volunteer. A note from a Board member is even better. Then, stay connected throughout each year with various ways of communicating without asking for money.  Continue to reach out with special touches throughout the year—maybe a personal email with a picture or short personal video clip. Too many times we hear of donors who say, “The only time I hear from them is when they want money.” Not good.

Create a sense of belonging

Ideally, you want to make donors feel like they are part of the team. Build their sense of investment in the organization. For them to feel like they are “investing in the purpose of your organization, not just, “I gave them some money.” Follow up to promote opportunities for them to get involved in a non-monetary way, such as volunteering. Volunteers can be among the most motivated donors.

Don’t wait for them to give another gift

Before the first year’s anniversary of the initial gift to your organization, present a new donor another opportunity to consider making a major gift. But, be sure when you make that ask, that it is not the first time they have heard from you since their initial gift.

The exception could be: If a donor’s first gift was made as a gift to a major gift fundraising campaign, and the donor had agreed to a multiple-year pledge payment, it would not be appropriate to ask for another major gift during the pledge period of the campaign.

Looking ahead

Finally, remember, as discussed earlier in this presentation, conduct periodic donor review of new donors being added to the database via special events, direct mail, online giving, etc., who may have the potential to make a major gift if cultivated and engaged properly. Make sure you conduct electronic screening on new donors you may have gained over the past year. Determine if any should be assigned to another staff member, if appropriate. Large organizations, many times have major gift officers in development who manage portfolios of major donors and would be eager to add new prospective donors to their list.

Final thoughts of an honest broker

Successful major gift fundraising is possible by having a compelling case for support, backed by a sound plan, and is offered to a qualified prospective donor, who is being solicited by the “honest broker,” an individual who puts the needs of the donor to give before his desire to get. Go raise major gifts for your organization to change lives and to change the world.


About Hall Powell:

Hall has served as Senior Vice President of Development Systems International (DSI) for more than a decade and has 38 years of fundraising experience, including 23 as a fundraising consultant. He has provided campaign and development counsel to a wide variety of institutions throughout the country, with special emphasis in the healthcare field. Prior to joining DSI, Hall was senior consultant with the fundraising consulting firm Alexander Hass of Atlanta, Georgia. Previously, Hall served as the Executive Vice President of the Memorial Health Foundation, Inc. in Savannah, Georgia, and the founding Executive Director of the New Hanover Regional Medical Center Foundation, Inc., in Wilmington, North Carolina. He spent more than four years as the founding Director of the Amethyst Foundation in Charlotte where he played a significant role in the development of a nonprofit management seminar for Winthrop University. He also served as Director of Graduate Administration at Winthrop and was responsible for directing the Executive MBA Program as an Associate Professor in the Management Department. A seasoned lecturer in the nonprofit sector, Hall has also been an instructor with the Duke University Nonprofit Management Seminar. A Certified fundraising Executive, Hall has served on the national board of directors of the National Society of Fundraising Executives, now known as the Association of Fundraising Professionals (AFP). He has also been instrumental in forming two AFP chapters. He holds an undergraduate degree from Guilford College and an MBA from Winthrop University. Hall also engaged in graduate studies at Columbia International University. In his role as a fundraising counselor, Hall Powell is a strong advocate of the underlying philosophy of “donor-centered fundraising,” meeting the need of the donor to give, not putting the needs of the nonprofit organization as the primary motive for the donor/institution relationship. With this underlying philosophy for building comprehensive fundraising programs for institutions he served as Chief Development Officer, and for those he serves as fundraising counsel, he supports the Major Gifts Ramp Up model. The model, accurately presented in 13 chapters built upon tried and proven best practices for successful major gifts fundraising, emphasizes building capacity for the nonprofit organization and long-term donor relationships.

As a consultant, Hall Powell was retained by Memorial Health University Medical Center Foundation, to develop and strategic plan for fundraising. The major teaching and research regional medical center had a development program raising approximately $2 million annually through the activities of 12 fundraising events and grant seeking, and it was desiring to raise $37 million to fund the building of an advanced cancer research institution on the campus of Memorial Health. For the next four years, Hall served as the Chief Executive Officer of the medical center’s Foundation for the purpose of implementing his strategic fundraising plan. In the first year of his tenure as CEO, Hall restructured the development program utilizing the donor-centered principles of Major Gifts Ramp Up and raised $12 million. Within the next three years, the $37 million goal for the cancer research institute was achieved while developing a comprehensive, capacity-building fundraising staff and program.