Your Major Donors Are More Important Than You Think They Are

Your Major Donors Are More Important Than You Think They Are

We’re doing a series of short posts called Mastermind Lessons.

The Fundraising Mastermind is transformational consulting for nonprofits that we do with Chris Davenport of Movie Mondays and The Nonprofit Storytelling Conference.

Today’s post is the second top-level lesson we’ve found that every organization in the Mastermind needs to learn…

Your Major Donors are Remarkably Important and You aren’t Spending Enough Time or Money on Them

An organization usually knows that a small percentage of donors (your “major donors”) provide a significant percentage of your total revenue.

But an organization is usually shocked when they discover how small that number of donors is, and how large the percentage of income is.

In our experience, it’s usually around 85% of an organization’s revenue from individuals that comes from 10% of their donors.

And because the organization hasn’t sat with the numbers and really faced what they mean, the organization does not spend enough time and money on their major donors.

Here’s the example I use that helps organizations see:

Say you have a business that has 100 customers. And 10 of those customers are responsible for 90% of your revenue. You would give those customers the “white glove” treatment. They would be greeted by name at the door. They would have a special, shorter line to wait in. They would get a phone call the next day to see if their purchase worked out.

That’s common sense. But too many nonprofits don’t apply it to fundraising.

Your major donors should get the “white glove” treatment:

  • Hand-written thank you cards
  • Appeal letters written specifically to them, about what they care about
  • Newsletters sent in large envelopes, with a hand-signed cover letter
  • A call from the Executive Director after every gift

There are lots of possible treatments. You can and should be doing them.

That said…

To Keep Your Major Donors, and to Lift Them to Higher Giving, You Need a SYSTEM

Special treatment is great. Start doing it now.

But what you really need is a major donor fundraising system.

In a nutshell, here’s what your system should do:

  1. Identify your major donors
  2. Rank them so you know who to focus on first
  3. Build relationships with them (with the ones who are open to this)
  4. Make a revenue goal for each major donor
  5. Make an annual plan to lead each major donor to reach the goa

It’s the organizations that have major donor systems in place, and then are disciplined about running the system, that see major revenue growth. They keep more of their major donors, and lift their major donors to higher and higher levels of giving.

Does Your Organization Need This?

The good thing about this is that almost every organization I’ve spoken with recently says they know they need to spend more time and money on their major donors.

The tough thing is that very few of them know what to do next.

My suggestion: take a class like this one from Jim Shapiro, the co-founder of Better Fundraising. (And if you can’t make those dates, apply anyway because there will be another class later this spring.) And follow the Veritus Group blog.

It will take time to get great at major donor fundraising. But it’s worth your time and investment!

Two Easy Steps to Cultivate Your Major Donor Relationships

cultivate majors

This is more of a reminder than a blog post.

The reminder: spend more time on your major donor fundraising!

Here’s why this is so important: the latest research I saw said that the average nonprofit receives 88% of their “individual donor revenue” from just 12% of their individual donors.

In my experience, disciplined major donor fundraising is the biggest-impact / least-used fundraising tool for most nonprofits.

At this moment, let’s not talk about the reasons why that is. Instead, let’s talk about two simple things you can to do start doing a better job today.

Do These Two Things

Here are two really simple things you can do to “go a little deeper” with your major donor fundraising:

  1. Subscribe to the blog from Veritus Group. They are the best at setting up internal systems to do major donor fundraising well, and at understanding what major donors want from your fundraising.
  2. Call one top donor today just to say “Thank you.” The donor you call should be one you haven’t spoken to in a while. And to make it easy, here’s a simple script for you:

“Hi [DONOR NAME], this is [YOUR NAME] from [YOUR ORG] and I’m calling just to say Thank you. Don’t worry, I’m not calling to ask for money. But we haven’t communicated 1-to-1 in a while, and I want to make sure you know how much you are appreciated. You and your generosity have done amazing things! So thank you, and are there any questions you have that I can answer, or anything you’d like to know about what your gift has accomplished?”

I’m pretty sure you can take it from there.

But the trick is to call at least one top donor today. It’s a small step. But a BIG step for that donor.

And you’ll be on the path towards a better relationship and better future fundraising results!

Report to your Major Donors This Summer

Major report icon.

If your organization doesn’t have a natural reason to fundraise during the summer, July and August are a great time of year to be Reporting back to your major donors on the impact their previous gifts are having on your beneficiaries.

Take the time this summer to visit with your major donors and Report back to them the amazing things that have happened because they gave you a gift earlier in the year.

If you are unable to meet face-to-face with them, then send them a text that includes a picture of a beneficiary they helped. Or take a short video of a beneficiary, or perhaps the building the donor helped build. Set aside time in your day to call your donors and give them a quick update.

By whatever means possible, Report back to your donors during the summer months. Why? Because now is a great time to close the loop with each of your donors and earn their trust, so that they will be ready to give another gift during the last few months of the year!

How Your Board Can Help When Raising Major Gifts

Active board.

If your board is like most, they don’t like asking donors for gifts. They fear rejection. They fear the negative connotations associated with fundraising. They don’t see it as their role.

If this describes your board, then I am here to share some good news with you. There are other powerful things your board can do to help your major donor fundraising.

What Your Board CAN Do

Here’s just a short list of things we’ve had real, measurable success having board members do:

  1. Write thank you notes. Most board members have the time to write thank you notes. Give each board member the names of the donors that need to be thanked, provide thank you notes and mailing addresses, and tell them what to say. The trick is to make it as easy as possible for them to just do it. Make it as easy as filling out a form!
    • Pro Tip: have them write two notes at the beginning of your next board meeting.
  2. Call donors to thank them for their recent gift. Most board members have a phone and can find the time to call and thank donors. Same process as above: make it as easy as possible for them to do it by providing the donor’s name, last gift amount and phone number, and telling the board member what to say.
    • Pro tip: like writing notes, these calls can be great right at the start of a board meeting.
    • Invite their friends to attend an open house or a “non-ask” event. This is a relatively simple request since there isn’t an expectation for their friends to give a gift. The board member is just asking their friends for time and an opportunity to learn more about the organization they serve.
  1. Invite friends to sit with them at your next gala fundraising event. This is the easiest way for a board member to encourage their friends to give a gift without actually asking them directly for a gift.
  2. Write a check! It is very important that each member of your board make a significant donation to your cause every year. Hopefully they can give at a major donor level, but if not, my advice is to require each board member to give a “significant” gift – and they get to determine what “significant” means for them.

How to Help a Board Member Who is Willing to Ask

If you have a board member who is actually willing to ask donors for major gifts, congratulations! You have a rare species of board member – cherish them and thank them like crazy!

Also – help them succeed! Here are a few things you should equip them with:

  1. A clear fundraising goal and offer. They need to know how much you are trying to raise, why the gift is needed now, and what the donor’s gift will accomplish.
  2. An emotional story (or two) of Need. The best resource you can provide to your board members involved in fundraising are short stories that present a problem for the donor to solve. Tell your board member that if they only share stories about people who have already been helped, they will raise less money!
  3. A deadline. We all work better, faster, and with more urgency when we know we have a deadline. This is true in fundraising too. Your board member will work with urgency if she knows she has a deadline to meet. And the same can be said for the donors she is talking to – the donors will be more likely to respond if they know there is a deadline to the request.
  4. Response forms and reply envelopes. If your board member has fundraising success and can secure major gifts, then it is your job to make it easy for the donor to send in their gift or pledge.

Your board members should be actively involved in supporting your major donor fundraising efforts. But you and I both know that not all of them are willing to ask for gifts.

To encourage board members to help you, be sure to tell them that what you’re going to ask them to do does not always need to be asking their friends or your current major donors for a donation. But be clear that if they aren’t willing to do that, they can still help in valuable ways. And they need to!

So get them actively involved in the Thanking and Reporting portion of our ‘Ask, Thank, Report, Repeat’ fundraising system for major donors!

The Magic of a Matching Gift!

Note from Steven: this month Jim’s been posting helpful blogs about your major donor fundraising. This post is about matching gifts. Speaking from personal experience: follow Jim’s advice and you’ll raise a lot more money!

Everyone likes a good deal – even your donors! Think about any store that sells things you love. When they have a sale, are you more likely to pay attention and make a purchase? You bet. Getting a ‘deal’ makes all of us more likely to take action now.

It’s the same thing with nonprofit fundraising.

In fundraising, matching funds are often the ‘deal’ that makes donors take action. After all, what donor wouldn’t want to double their money & impact when they make a donation?! Matching funds are fundraising magic.

Matching funds are the easiest way to improve fundraising results – and at the same time make your donors feel great about their giving. And your easiest source of matching funds are your major donors.

Let me make the further case for why matching funds matter, and then I will tell you how to secure them from your major donors.

Matching Funds make a BIG Difference

Here are just a few reasons why securing matching funds helps you raise more money:

  • A 51% increase in the average donation amount (and that’s prior to receiving matching gift funds).*
  • Mentioning matching gifts in fundraising appeals results in a 71% increase in the response rate.**
  • 84% of survey participants revealed they’re more likely to donate if a match was offered.‡
  • When a match is offered, one in three donors indicates they gave a larger gift because matching was applied to their donation.‡‡
  • Match-funding is the most likely factor to make donors give more. Match-funding even scored higher than emergency appeals.***

That’s fundraising magic right there! Donors are more engaged, more likely to give, and you’ll raise more money.

Note from Steven: you can use matches several times a year. Donors do not get tired of them. Do you get tired of your favorite things going on sale?

Now go secure those funds!

By now you are probably asking yourself, “How do I get a major donor to give matching funds?” As I mentioned earlier, the easiest source of matching funds are your major donors.

Here’s how I go about securing matching funds from major donors:

  1. You must first know who your major donors are. Earlier this month I wrote a blog post where I outlined the process for identifying, ranking and working with your major donors. If you don’t know exactly who your major donors are, then I’d suggest you first read that blog post.
  2. Review your major donor list to find a donor who either hasn’t given a major gift this year or you think has the capacity to give another large gift.
  3. Contact the donor to ask them if they’d like the chance to multiply their gift and in turn increase the impact of their gift.
  4. If you need to, share a couple of the stats above with the donor. Most major donors know that matching funds increase fundraising results – but they don’t have any idea how much. Be sure to tell them how big an impact their gift of matching funds will have!
  5. When asking for matching funds (or any gift for that matter), give them a deadline to respond to you by. If your donor seems interested but doesn’t commit to giving you a matching gift, then give them a deadline that’s reasonably soon.

Follow those steps. You won’t have success every time – but you’ll have more success than you expect!

Having matching funds really is fundraising magic. It is the easiest way to increase your fundraising results, and it’s a great way to engage your major donors in your fundraising efforts.

And a more engaged major donor is a great thing for your organization!

*Source: Tech Soup: Which Fundraising Strategies Work?
**Source: Tech Soup: Which Fundraising Strategies Work?
‡Source: The Big-Give Research Initiative
‡‡Source: The Big-Give Research Initiative
***Source: The Big-Give Research Initiative

The role of major donors in promoting and funding your special events

Your special fundraising event is not too far way. You’re scrambling to put all the pieces together. You are stressed out and have no idea how you are going to accomplish all you need to do before the big day.

Have you ever felt this way? Or do you feel this way right now?!

Over the years I have personally planned special events both large and small. Most recently, I’ve consulted and advised our clients how to make the most of their fundraising events. I know how stressful it can be to plan these events. I have also learned something powerful…

Your Major Donors are So Important to Event Success

Just like most fundraising endeavors, your fundraising event will rest on the shoulders of a few people – your major donors.

If you want your event to be as successful as possible, here are a few suggestions to help your major donors help you and your cause:

  1. Ask your major donors to underwrite or sponsor your event. After all, the goal of your event is to raise money. So why not ask your major donors BEFORE your event to help underwrite the cost? Or if they own a business, you can ask them to make a donation in exchange for business promotion (that’s what event sponsorship is).
  2. Ask your major donors to invite 10 of their closest friends to come to the event. Most likely your major donors have friends that could be major donors to your cause. Special events are a great way to introduce their friends to your mission. And if your fundraising event does a great job motivating people in the room to make a donation, you have a high likelihood that these “new friends” will become donors.
    • NOTE: if a friend or invitee of a current major donor makes a gift, treat that person like a major donor even if their gift doesn’t merit that status. Think of the gift they’ve given you as a ‘test gift’ to see if they really like your organization and like the way you treat donors. Treat them like a Major and you’ve massively increased the chance that they’ll become a Major!
  3. Ask your major donors to make a gift at the event. Do not leave their giving up to chance at the event! Before the event, ask them to make a gift at the event. This gives you the opportunity to ask for what you need, and to answer any questions your donors might have regarding the fundraising offer or how the funds will be used.
  4. Ask your major donors to give a matching gift PRIOR to the event. There is nothing better than walking into the room the day of your event with matching funds available. Donors love knowing their gift will be matched – and their impact increased. Matching funds will increase the net fundraising results of your event.

Not every tip is right for every donor. Your job is to know each of your major donors, then to apply the right strategy for each!

Give Each Major Donor a Special Role at Your Next Event

Your current major donors want to help. After all, they are already invested in your work, and they want to see you succeed.

So give each major donor a specific role at your next event. Use at least one of the strategies above to give each major donor a special role to play. Then if you do, several fantastic things will happen:

  • You’ll raise more money.
  • You’ll know that the donors who make-or-break your event are going in primed and ready to give.
  • Your majors will appreciate the extra communication and the clarity around their role
  • You will be able to Thank them for more than just their gift.
  • You’ll have involved them in ways other than just giving – which increases their likelihood of giving again.

And here’s perhaps the most motivating outcome of all: you’ll be more at peace on the day of the event – and at the event – knowing that it’s going to go great!

The best way to ask major donors when you can’t get in front of them in person

Major donor fundraising should be intentional and relational.

But sometimes you can’t be as relational as you’d like! Sometimes donors are unable to meet. A large percentage of your donors won’t even be interested in meeting.

Or even speaking to you.

But there are times when you still need to ask them for a donation!

Thankfully, many of them will open mail from your organization. And that’s why mailed appeals to major donors are still so successful.

Super Simple Guide

I’ve had to do this a lot over the years, and here’s a quick list of the tips I’ve found to be most helpful:

  • Send the appeal in a large envelope. 9×12 should do the trick.
  • Hand-address the envelope and use a live stamp (no meter postage).
  • Send a longer letter than you would to your mass donors. 4+ pages should give you the room you need to make your case for support.
  • Most donors won’t read the entire letter, but they will scan it. Design the letter to be easy to read, and underline a couple of key things; specifically the reason you’re writing them today and what you hope they will do.
  • Personalize it with their name.
  • Hand-sign the letter.
  • Always include a customized reply card (again with the donor’s name) and reply envelope with a live stamp. Make it as easy as possible for the donor to send you a donation now!
  • Ask for a specific amount based on their previous giving, but also include an “open ask” in case they’d like to give less – or more! (An open ask usually looks something like, [ ] Here’s my gift of $_________.)

Big Picture Goal

Your big-picture goal here is to make the letter feel like it was put together just for the donor – not something you produced for everyone.

I know it’s not possible to ask every Major Donor in person each time. So you need to get good at using the mail to make sure they see your ask.

Hopefully, this blog post helps you think through and plan how your direct appeal should look in the mail!

How to ask major donors for a sizable gift

What if I told you it could be just as easy to ask a donor for $10,000 as it is to ask her for $1,000? Would you believe me?

Well, I’m here to tell you that it can be just as easy – BUT only if you are willing to keep things simple, follow the ‘success ingredients’ I’ve outlined below, and then ask with confidence.

Here are the ‘success ingredients’ that need to be in place in order for you to have confidence when asking major donors for a sizable gift.

  • Know your donor. What does she like about your organization, or about the outcomes your organization creates? What has she funded in the past? What are her personal interests or hobbies? The more you know about your donor, the more likely it is you can create an Ask that appeals to her.
  • Before you ask your donor for a sizeable gift, tell your donor that you plan to ask them for a sizeable gift. Don’t surprise your donor! Tell her your intentions. If you prepare her to be Asked, she’ll respond better when you ask.
  • Develop a great fundraising offer that you know she will love. Ask her to fund projects, programs and outcomes she already likes! If you know your donor likes directly funding meals for homeless moms and kids, then don’t ask her to fund the new job-training program for men. Stay on target.
  • Make your ‘Ask’ part of a larger vision or campaign goal. Most donors don’t want to feel like the only donor giving a sizeable gift. They want to know that other donors are giving or being asked to give at sizeable levels.
  • Ask for more than you think your donor can give. I can tell you story after story of Major Gift Officers that have applied this thinking and come away with $100,000 gifts when they were first thinking of asking for $10,000. The big idea here: don’t accidently downgrade donor giving amounts by always asking for what you think donors can/will give. Sometimes you need to ask for what is needed, because oftentimes donors will surprise you!
  • Ask with confidence, and then give your donor time to mentally process your request and respond. It is all too common for Major Gift Officers to do most of the talking. It is critical that after you have delivered your appeal for support, that you stop talking and listen. Remember, this is a two-way conversation, and the donor deserves time to ask questions or respond with a financial commitment.

Try it!

The best way to improve your confidence and ability to ask donors for sizeable gifts is to go out and try it. I challenge you right now to identify 2-3 major donors (or potential major donors) and ‘cook up’ an Ask with each ingredient.

It might feel awkward at first. But it’s what I see successful major gift fundraisers do again and again and again. For you, this process will become easier and easier to do as you practice the steps above. And pretty soon, you won’t believe you used to do major donor fundraising ‘the old way’!

If you don’t have any major donors to try this out on, or you don’t feel as confident as you’d like, then practice by role-playing. Do it with a co-worker, a board member, or even a friend.

Whatever you do, it is time for you to get out there and put this thinking to work. You’ll be amazed at how much easier major donor fundraising can be – and how much more money you can raise for your cause.

[SHORT POST] The simple things very few nonprofits do for their major donors

The Virtuous Circle.

You guys. It really is this simple. And so few nonprofits do it.

  • Yesterday I heard about a nonprofit that hadn’t communicated (at all!) to their major donors in 2 years.
  • There’s the story that’s going around about the guy who gave a million dollars to his alma mater – and never received a thank you.
  • And there’s story after story about major donors who gave large gifts and then, after being thanked, were never communicated to again until they were asked for their next large gift.

Each time a major donor gives a gift to your organization, make damn sure there is a plan to Thank them well and later Report back to them what their gift made possible.

Here’s Why

When you thank a donor well, they know their gift was appreciated and important. Put your donor hat on for a moment. As a donor, you’d like to feel appreciated and important, right?

When you Report well, they know their gift actually made a difference. As a donor, you’d like to know that your gift made a difference, right? And you’d be more likely to give again if you know your gift made a difference, right?

The Easy Steps

If you’re like most nonprofits, at least 80% of your revenue comes from 20% (or less) of your donors. And usually, it’s closer to 90/10. So we’re not talking about that many people.

Here’s what I want you to do:

  1. Go make a list of the last 10 major donors who gave your organization a gift
  2. For each one, write down whether they need to be Thanked or Reported to.
  3. Over the next 10 days, do the appropriate step for each major donor.

You’ll be amazed at how happy they will be to hear from you. And you’ve instantly made it more likely they will give you a gift this year!