Category: Major Donor Fundraising

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

Jim Shapiro  |  Major Donor Fundraising

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!

4 Steps to Create a System to Raise More Major Gifts

Jim Shapiro  |  Major Donor Fundraising

Over my 20 years of doing and teaching major donor fundraising, I’ve noticed something that small nonprofits should pay attention to:

Organizations that have a systematic approach to major donor fundraising raise the most money and have the most satisfied donors.

It’s really that simple.

The system that I recommend has 4 easy-to-follow steps. And if you do them right you’ll honor your donors, deepen your organization’s relationship with them, and raise more money.

Don’t get me wrong, installing this system takes real work. But the work isn’t hard – especially when compared to the personal and financial results you’ll see!

Let’s get to it . . .

Step #1 – Identify exactly who your major donors are

  • If you already have very specific criteria for who is a major donor, or your organization is currently managing major donors, move to step #2.
  • If not, then pull a list of all donors that gave your organization a gift in the last 24 months. Sort them by total giving. The donors at the top of the list are your major donors.
    • I realized that “the top of your list” is a little imprecise. But it varies wildly by organization. The main principle is to identify the donors who give the lion’s share of your donations, call them your major donors, and then cultivate them with more time and effort than your other donors. If you have less than 100 donors, treat all your donors like major donors. If you have 10,000 donors, you’re probably looking at a group of 250 to 500 donors.

I used the word “exactly” because most small nonprofits don’t clearly define who is and who isn’t a major donor. And because of that, some major donors don’t get cultivated well. Gifts (and relationships) are lost.

Step #2 – Rank your major donors

Just knowing who your major donors are isn’t enough. You must rank them, but not just by financial capacity or historic giving.

Most major gift officers make the mistake of managing their list from the financial information only. There are other factors at play! Factors like whether the donor has a strong relationship with someone associated with your organization, and whether the donor has a strong affinity to your organization or to your cause.

How to implement this step is too much for one blog post. But to help you rate and sort your donors, I created this spreadsheet for you to read and use.

Step #3 – Create a plan for each major donor

Now you know who your major donors are. You’ve rated and sorted them. It’s time to create a cultivation plan for every donor on your list.

First, for each major donor, decide who at your organization will be responsible for the relationship. That may be your Executive Director, it may be a “major gifts officer,” it may a Board member. The point is to make sure that someone is responsible (and accountable) for each major donor relationship.

Here’s what happens if it’s “management by committee” and no one single person is responsible for a major donor relationship. That means that everyone is responsible. Which means that no one is responsible. Which means the relationship won’t be cultivated as well. Which means the donor is likely to give less and less – and then leave altogether.

Once each donor has been assigned to a person, then make a communication plan for each donor, so you can cultivate a relationship that leads to a point where an ask for support is warranted and even expected. This should be a step-by step plan, mapped out over the course of a year. Know exactly what your plan is for asking, thanking and reporting.

This work requires reviewing the major donor rating sheet on a daily basis and reviewing/updating your moves strategy as needed, as fundraising goals are met or the donor’s appetite for working with you evolves or changes.

If you fail to plan these steps, you are planning to fail.

Step #4 – It’s time to Ask

Once you have completed steps 1-3, you move from internal planning to external action.

In many cases it will be time to Ask a donor for a gift. Donors who have recently given a gift will need to be thanked or reported to.

My advice is to know exactly where each donor is in the Ask, Thank, Report, Repeat rhythm, then make the appropriate next move. A “move” is major donor fundraising jargon for “the next step.” And what experienced fundraisers do is plan a series of “moves” over the course of a year to lead the major donor to making a gift. (This is the “step-by-step plan” I’m talking about in Step #3 above.)

These “moves” could include in-person meetings, phone conversations, writing thank-you notes, sending emails, sending a copy of your newsletter in a nice envelope, etc.

Here are three quick pro-tips for you

  • The more in-person meetings you can get, the better.
  • Never have lunch alone!
  • Major donors are far more likely to give you another gift if they have been well-Thanked and Reported back to re: their previous gift.

Step-by-Step + Accountability = Success

Doing all of this absolutely creates more work than you’re doing now. However, it makes all of the work easier because it takes the mystery out of successful major donor fundraising. Instead, you have easy-to-follow steps. Just build your system and then work your system.

Just make sure that accountability is part of your plan!

Make sure the plan for each donor is written down. Make sure the plan is measured and followed. True fundraising success happens when your organization has a custom plan for each major donor, each step is tracked, and the person responsible for each step is held accountable. Do that, and all the little steps needed to build the relationship will happen.

I hope this blog post encourages you to take your major donor planning and strategy to the next level. I believe you can do it!

Who – exactly – makes or breaks your fundraising goals?

Jim Shapiro  |  Major Donor Fundraising

We’re going to spend this month blogging about major donor fundraising, and teaching you to get better at it quickly.

And I’ll start with an educated guess about your organization: a majority of your fundraising revenue (from individuals) comes from a small percentage of your donors.

Most of our clients have at least 80% of their fundraising revenue coming from about 20% of their donors. For a couple of organizations it’s as high as 95% of the fundraising revenue coming from 5% of their donors.

Most organizations we start working with would say they ‘pretty much know that our top donors bring in most of our revenue.’ But it’s the organizations who ‘know exactly which donors bring in most of the revenue and have a plan to help them give even more’ who raise a LOT more money.

If you don’t know your ‘major donor revenue ratio,’ stop what you are doing right now and figure it out!

Once you know your ratio, you’ll instantly have a game-changing realization: you need to focus more of your efforts on cultivating those relationships.

I am constantly amazed at how many organizations don’t know their ratio. One look at your ratio is all it’ll take to know how important it is to build relationships with your top donors, and to do all you can to retain them.

And listen – I am the first one to say that major donor fundraising is not easy work. It takes time and real effort. But in my opinion it’s the most important work you can do to sustain and increase your fundraising revenue.

Consider this: if a majority of your fundraising revenue comes from a small number of donors, then you should spend a majority of your time working to keep those donors actively giving and (if possible) giving more.

Let me hit this point home for you with a short story.

Recently I was asked by our local fundraising association to talk to a group of fundraising directors. After my talk, I was approached by one of the directors in attendance. She asked me how I expected fundraising directors like her, from small organizations, to do all that I was teaching them to do. She felt overwhelmed with all of her fundraising responsibilities, and it was common for her to feel paralyzed by her workload.

My response to her question was simple and direct.

I encouraged her to figure out which fundraising activities produced the most revenue for her organization, and spend her time maximizing those activities. I also told her it was okay not to do some of the fundraising tasks on her list, especially those tasks that produce very little revenue.

She looked so relieved to know that she didn’t need to do it all!

This story illustrates two things:

  1. You are one person, and you can’t do it all. So it’s important for you to focus on the fundraising activities that produce the most revenue.
  2. In order to focus on the fundraising activities that raise the most money, you must say no to some of the tasks on your fundraising list that don’t produce revenue.

Over my 20 years of fundraising, I have seen this kind of thinking and prioritization turn overwhelmed fundraising staff into focused, energized and driven fundraising professionals. And they start raising more money immediately!

So here are your next steps:

  • Figure out what percentage of your income is coming from your major donors
  • Identify exactly who those donors are
  • Shift your thinking to prioritize everything to you do to retain and upgrade those donors
  • Make a plan for each one of those donors for the rest of the year. After all – if you make a plan for the donors who provide 20% of your income, isn’t it more important to make customized plans for your donors who provide 80% of your income?

As this month goes on, we’ll talk more about how to make your plan for each donor, how to ask them, and how to increase their giving!

3 ways to maximize major donor fundraising NOW

Jim Shapiro  |  Major Donor Fundraising

You know how critical major donors are to your organization.

This fact is magnified during the month of December. The amount of money you raise this month largely rests on the shoulders of a few key donors.  And it is your job to maximize your efforts this fundraising.

But if you are like everyone else in nonprofit work, you probably have very little time to add another thing to your to-do list. You are running out of time!

The good news is that this fundraising season you have one more week than usual between Thanksgiving and Christmas.

This means you have a BONUS week to raise more money from your major donors. Another side of the same coin: you have a bonus week to give your major donors the opportunity to experience the joy of giving.  Because never forget; they LOVE to give!

With this in mind, I’ve come up with 3 easy things for you to do to maximize the fundraising season and to make the most of this bonus week.

1. Don’t spend time writing Christmas cards; spend your time writing Christmas appeals.

Since your time is limited, you should focus most of your energy on what will produce revenue. Christmas cards are nice, but they won’t generate revenue. The first thing you should work on and deliver is a Christmas appeal. Ask your donors to make a generous year-end gift and then once you receive that gift you can send them a thank you note and wish them a happy holiday.

2. Call your top 10 major donors who haven’t given a gift this year right now and set a time to meet with them to ask them for a year-end gift.

Be very clear that the purpose of the meeting is to ask them for a gift. Taking the time to meet in person sends a strong message that you value them and their giving to your cause.

3. Say, “YES!” to any and every invitation you receive to attend a holiday party, open house, public event, etc.

This is a great time of year to deepen relationships with current major donors and to meet their friends. I know you are tired and feel maxed out, but the number of opportunities to meet with current and future donors in-person won’t come this way until December of 2018.

Major donors are incredibly generous people who give a significant percentage of the total donations for your organization. So it’s essential that you maximize the fundraising season and take advantage of this bonus week between Thanksgiving and Christmas. Now is the time to lead your donors to give a big year-end gift, and when possible cultivate new relationships that will fuel your major gift fundraising throughout 2018.

If this blog post sparked your thinking, then I know you’d benefit from a webinar I hosted a few weeks back. Click here to get our Major Donor Year-End Fundraising Webinar and learn an easy-to-follow system that will help you get (bigger!) gifts from your most valuable donors before the year ends. You’ll feel confident with a step-by-step plan for what to do this year, and you’ll love knowing that you’re stewarding your most important donor relationships!

I believe in you and the work you do so much that I’m going to give you my personal discount code. Type in JRS25 (that’s for James Robert Shapiro) and you’ll get an additional 25% of your purchase of this product and/or any other products you purchase from our site.

How To Get Matching Funds from a Major Donor

Steven  |  Ask, Major Donor Fundraising

Matching funds are the easiest way to make everything you do (appeals, events, newsletters, you name it) raise more money.

And your easiest source of matching funds are your major donors.

We’ve had great success helping our clients get their major donors to donate matching funds. When done correctly it engages the major donor, gives the major donor a chance to multiply their impact (who doesn’t like that?) and helps you raise more money towards your development goals.

Here’s how we go about it. And of course every major donor is different, but here’s the approach that’s worked for us . . .

Review your major donors for the right donor(s)

Look for a donor who either a) hasn’t given a gift yet this year, or b) you think has the capacity to give another gift at year-end. At year-end, I think approaching majors who haven’t yet given a gift this year is your best move.

Approach the donor with a question

Use the opening question of, “Would you like the chance to multiply your giving and increase the impact of your generosity?” You want to — right away — get the donor in the frame of mind that they can increase their impact by donating matching funds.

Share the stats with them

Make it clear to the donor that they will be multiplying the impact of their own giving. Here’s why: not only do they get their gift matched by the rest of your donors, but there’s additional giving that takes place because of the match!

Look at these stats from MailChimp. I would share these stats directly with your major donor, and talk about how their donation can make results like this possible:

  • Matching funds increase average gift size by 41%
  • Matching funds increase the # of donations by 110%
  • Matching funds increase revenue by 120% (and that’s not including the matching funds themselves!)

Do you see how a match does more than double the money you raise? You get 2x the original amount because you have the match, and the funds raised to match it. But then your fundraising performs better than average too! This is an instance where 1 + 1 = 2.5. THAT’s the opportunity you have to give your donor!

Give them a deadline

If your donor is interested but doesn’t commit, give them a deadline that’s reasonably soon. You want to make them feel like opportunities to multiply their impact like this don’t come around that often (which is true). Tell them that if they say “no” you are going to contact another donor because you need the match to increase fundraising results.

And if you haven’t heard from them by the deadline, contact them to check in. Then if you need to talk to another donor, talk to the next person on your list.

Having a match really is the easiest way to increase your fundraising results. And if you want those kind of increased results for your year-end fundraising? Figure out what major you should be talking to right now and approach them right away.

For Major Donors, November > December

Steven  |  Major Donor Fundraising

“Most major donors make their giving decisions prior to December.”

That’s a powerful lesson that I learned the hard way. My background was mass donor fundraising; sending out millions of letters, and creating donor-acquition TV shows, and doing radio campaigns.

In that world, December is the most important month to focus on.

But when I started doing major donor fundraising I was taught two incredibly powerful things for major donor fundraising at this time of year:

  1. Know exactly which of your major donors have not given a gift yet during this year
  2. Ask those majors to give a gift no later than early November.

What I learned was that a large portion of major donors make their giving decisions before Thanksgiving. And there are lots of stories about major donor families meeting during Thanksgiving weekend to decide what organizations to support that year.

Not all majors are like this. But in my experience, enough of them are that soliciting your majors before Thanksgiving works better than after Thanksgiving.

For the majors that you are going to meet with and ask in person, aim for before thanksgiving. (Which means you should start setting up those meetings in October.) For the majors who you are sending a major donor proposal or mailing to, send it the first week of November.

Could you make a reminder call in December? Of course? If they haven’t given yet, should they still be included in your year-end direct mail and emails? Of course.

And remember:

For most organizations major donors provide between 80% and 90% of total revenue from individual donors.

This is important. This is worth your focus. It’s worth doing early.

tl;dr? For majors, November > December

And if you need help making a plan for your majors, check out our webinar. We created it expressly to help smaller organizations maximize their major donor revenue and relationships! It will walk you through the easy way to make a proven plan to get major gifts before the end of the year.

No Mystery, Just a Major Donor System That Works

Steven  |  Major Donor Fundraising

Hopefully you’ve heard that Jim is hosting a webinar expressly designed to help you get major gifts before December 31st.

This is your last chance to sign up for the live webinar, where you’ll be able to get Jim’s advice and your questions answered.

Listen, this thing is the real deal. It’s about giving you an easy-to-follow system to get major gifts AND deepen your relationships with major donors.

Because major donor fundraising shouldn’t feel like an unsolvable mystery. I’m in all the meetings, hearing questions like ‘How do I know who to talk to first?’ and ‘What do I do if I can’t get a meeting with them?’ and ‘That donor already gave last year, what do I ask them to give to this year? And how much?’

Jim has the answers.

Well, he doesn’t have all the answers. He has a system. And that system gives you your best shot at getting gifts. And the system is built to honor your donors and deepen your relationships with them. Because we believe the same thing our friends at the Veritus Group do: it’s not just about the money!

Take a look at this graphic from the webinar. Jim is teaching you his 4-step Identify, Rank, Move, Ask system. It’s easy. And after this page you’ll know who to focus your time, efforts and money on first. And second. And third.

We built you a spreadsheet that you’ll receive with your purchase. It’s built so that you can enter your donor data, rank and track your majors. For a small shop without a sophisticated donor software system, this alone is gold and worth the price of the webinar.

But I need to be clear; you’ll still have to do some work. This isn’t some magical unicorn of a webinar that solves all your major donor problems. There is no silver bullet.

Let’s just call it a shortcut. This webinar allows you to download the accumulated wisdom of the really smart fundraisers who have gone before you. They know that successful major donor fundraising is about having a system —> that generates a plan —> that tells you who to talk to next and what to say to them —> which gives you the best chance for major donor fundraising success.

Especially at this time of year.

Because there are no guarantees. But you CAN stack the odds in your favor.

Sign up for Jim’s webinar today. It’s October 12 at 10:00 am Pacific Time. If you can’t make it, we’ll record it for you so you can watch it as soon as you want to start raising more money.

It’s $179. It’s in the territory of “the best $179 you’ve ever spent.” With the seminar and a little work (which you were already going to do, but now it will be more focused) you’ll raise thousands (or tens of thousands) more. And you’ll have a system that you can use for ALL of next year to raise even more from your donors. Go sign up!

Hidden Pitfalls: Not Following Up on a Pledge

Steven  |  Ask, Major Donor Fundraising

Is your organization good at following up on pledges from donors?

In my experience, most organizations aren’t. And it’s especially apparent with major donor pledges.

The lack of follow-up usually comes from fears around ‘bothering’ or ‘badgering’ the donor. People fear they will ‘drive the donor away’ or ’cause a problem in the relationship’ — especially when the donor is a major donor or a board member.

And only one person needs to voice these fears and they spread like wildfire.

But these fears are mostly unfounded and do far more damage than you think.

When follow-up on a donor pledge is absent or insufficient, here’s what that communicates to the donor:

It says that the donor’s gift isn’t important.

Because if their gift was important – if it really mattered – the organization would be in touch with the donor early and often. It would be telling them how important that gift is. The organization would actively be trying to get the gift!

It says that the donor herself isn’t important.

Donors know that other people are giving to your organization. They imagine that you’re out having wonderful lunches with the big donors, happily giving and receiving, making the world a better place and enjoying it while you do. So when a donor isn’t followed up with, they feel like they must not be important enough to get the good treatment.

It says that your organization doesn’t have its act together.

The donor knows you have to pay bills, pay salaries, and use money to help the people who need help. When a donor makes a pledge and doesn’t hear enough about it, it feels to her like your organization must not track money very well. It makes her wonder what happened to the other donors who made pledges. And if you’re really raising as much money and helping as many people as you say you are.

The donor doesn’t feel like their gift makes a difference.

The most important one. If a donor doesn’t hear directly and often about her pledge, she wonders if her pledge was really going to make a difference. Because if it was really going to make a difference – if it was really needed – wouldn’t the organization have gotten in touch with her? Maybe her gifts don’t make that much of a difference after all . . .

Makes you want to do a good job following up with the pledges you receive, doesn’t it? Here’s a quick list for how to do that well:

  1. Always have a deadline. Deadlines are amazing at causing action to happen – both on your part and on your donor’s part!
  2. Communicate with your donor(s) early and often about their pledge. I recommend 3 times: once immediately after the pledge, once about halfway from the pledge to the deadline, and once a month before the deadline.
  3. In your communications, mention that their gift is important, that it matters, and that it will make a difference. You want your donor to know that her gift matters and that it is needed.
  4. Be sure to mention that you understand if circumstances change and they can’t give the amount they pledged or fulfill their pledge by the deadline. You want to give your donors an honorable way out.

Think of the whole thing as a ‘kind business process’ that’s honoring to your donors and honoring to your cause or beneficiaries. Don’t let fear get in the way of loving follow-ups! If you do, you’ll lose revenue and harm relationships with donors.