Major Gifts: Seeking Investments for Your Future

Al LyonsJohnson Center for Philanthropy

Grand Rapids, Michigan

http://www.gvsu.edu/jcp/

Qualities defining major gifts

Major Gifts MAJOR GIFTS:

• Typically from previous donors who make small gifts • A capital campaign will lead with one gift of 10%-

20% • Major gifts can also be annual. • Major gifts are often paid over a period of time • May include planned gifts as well as cash.• One type of major gift is a “big gift.”

– Once-in-a-lifetime gift of a significant sum

Major Gifts

Basic principles of major gifts

• Major gift solicitation involves matching the donor’s interests with the needs of the organization.

• Each major gift is a campaign in itself

Major Gifts

Reasons for making a major gift:

1. Being asked to give by someone you know well.2. Because you volunteered at the organization.3. Being asked by clergy to give.4. Reading or hearing a news story.5. Being asked at work to give.6. Receiving a letter asking you to give.7. Receiving a phone call asking you to give.8. Reading a news or magazine ad asking you to give.9. Seeing a television commercial.

(INDEPENDENT SECTOR, Giving and Volunteering in the United States, 1996)

Major Gifts

Reasons for NOT making a major gift:

1. I could not afford to give money.2. I already give as much as I can.3. I’m making less money this year than last.4. I’m unsure about having a job next year.5. I lost my job.6. I would rather spend my money in other ways.7. no one I knew personally asked my to give.8. No charitable institution asked me for a contribution.9. I didn’t get around to it.

(INDEPENDENT SECTOR, Giving and Volunteering in the United States, 1996)

Major Gifts

Identifying and qualifying major gift prospects.

Look for:A. Awareness of the organization - Some linkage B. Interest - via smaller gifts and response to invitations C. Involvement through serving on board or committeeD. Concern for welfare of organizationE. Committed to improving organizationF. Capable of giving:

– Previous gifts: to the organization or to othersG. Accessible by the organization

Major Gifts

Cultivation and tracking of major gift prospects.

1. Involve the prospect in activities of the organization and seek his/her counsel.

2. Invite the prospect to visit the organization. 3. Give appropriate gifts of appreciation to the prospect 4. Keep the prospect informed

Use the gift range chart to demonstrate quality andquantity of gifts needed.

This provides justification

Major Gifts – Gift Range Chart

To Raise $1,000,000

Gift Amount # of Gifts Needed$100,000-250,000+ 1-2$ 50,000 2-4$ 25,000 4-8$ 10,000 10-15$ 5,000 20-30$ 1,000 100$ 500 or less

Major Gifts in a Fundraising Campaign

• The top 25-100 individual prospects

• A contribution of $25,000 or more (or, ideally, $100,000 or more)

• This may also include major corporate and foundation prospects.

Major Gifts in a Fundraising Campaign

The Major Gifts Process:

1. Identify and prioritize the top 25 - 100 prospects

2. Determine best personalized approaches and projects

3. Cultivate identified prospects on an individual basis

4. Conduct a personal approach to identified prospects

5. Help determine and execute ongoing recognition

MAJOR GIFTS COMMITTEE ORGANIZATION

The Process of Asking for a Gift

There are three dimensions:

1. The psychology of asking for money

2. Identification and cultivation of the prospects

3. The solicitation itself, which connects:

- the goals of the campaign

- the mission of the organization - the values of the prospective donor

The Process of Asking for a Gift

The psychology of asking for money

A. Giving away money is pleasurable.

B. Giving money enables them to address social problems

C. When someone says no to a request for money, it is usually because of something going on in her life

D. People dislike asking for money mostly because they are afraid they will be rejected

E. In the U.S., to talk about money can be taboo

The Process of Asking for a Gift

The psychology of asking for money

F. Reflect not only on what the culture teaches us about money, but also what we learned in our families – about money and giving.

G. When you ask someone to support your organization, you ask him to invest in work which that person wants to see happen and cannot provide alone.

H. When you talk to someone about making a donation to your group, you provide the donor with the choice of helping or not helping your group accomplish this work

The Process of Asking for a Gift

1. Opening. Establish rapport.

2. Involvement. Bring the subject of the organization. Ask the prospect questions and allow the prospect to ask you questions.

3. Presentation. A full description of your program and the money needed to make it happen.

4 Close. This actually started when the prospect gave you permission to solicit. All that is left to determine is the amount of the gift and the method by which that gift will be made.

The Process of Asking for a Gift

Dealing with objections and refusals

A.Be prepared.

B.Listen carefully to why the prospect is objecting

C.Offer to follow up and make another call

D.The first refusal may not be the final one. Try again,

E. Do not take a refusal personally; evaluate: are you the right person to be asking for the gift?

F. The prospect has the right to decline to make a gift.

The Process of Asking for a Gift

Stewardship of the gift and giver

A. If a gift is made, acknowledge within (24?) 48 hours.

B. If prospects say no, thank them and keep them informed

C.Even a “failed” approach is a cultivation visit

D.There is a moral obligation to use that money in the way the donor expects and to keep the donor informed of the work his gift is supporting.

The Process of Asking for a Gift

Conventional Wisdom:

A. Give yourself before asking others to give.B. People do not give to causes, they give to people with

causes.C. We do not have the right to deprive anyone of the

privilege of saying “No.”E. The principal reason people do not give: They’re not

asked.F. Rarely do we know the donor’s real interests – Ask -

The Process of Asking for a Gift

Conventional Wisdom:

G. The solicitation is never completed until you close.H. Honor the donor by asking at the right levelI. Effective solicitation is the right person soliciting the

right prospect for the right gift at the right time for the right purpose in the right way.

J. Effective solicitation is 60% listening and 40% talking.

Leadership Prospect Approaches

IDENTIFYING A LEADING PROSPECT

• They have:1. The resources to make the level of gift 2. The inclination and history of contributing money to

any organization (preferably at this level).3. The inclination or history of giving away money to

you (look at their past relationship with you).4. A strong relationship with someone in your

organization (you have someone to open the door).

Leadership Prospect Approaches

RESEARCHING THE PROSPECT

1. What is their giving history to you?2. What is their (or their family’s) past involvement with you? e.g. program attendee, volunteer?3. What is their giving history to any organization?

- . . . Cause-related?- . . . Community-related?

4. What are their special interests, such as program concerns, key charity and community interests, recognition interests, and business relationships?

Leadership Prospect Approaches

PREPARING TO MEET WITH THE PROSPECT

Why might they make a major investment in us? from their viewpoint.

1. Prepare a special Case Statement for them that outlines your need in terms of their interest.

2. Determine the best person to make the initial contact 3. Determine the best time and setting for that contact.4. If others should be present, determine who they should be.5. Determine possible subsequent steps as follow-up.6. Determine possible recognition opportunities.

Leadership Prospect Approaches

POINTS TO INCLUDE IN PRESENTING THE APPEAL

1. The importance of a lead gift - community their endorsement, leadership role, and challenging to other prospects.

2. You are asking them to make an investment in the future of your community.

3. Every dollar given is equal to almost four dollars saved in long-term financing. Their gift is cost-effective.

4. “We are coming to you first because of the position of respect and prestige you command in the community. A major gift from you is a signal to others we are a worthy organization for contributions.”

Leadership Prospect Approaches

POINTS TO INCLUDE IN PRESENTING THE APPEAL

5. Present recognition possibilities and discover their preference. Recognition of them is important to you – it gives visibility of support.

6. Ask questions of them; get the prospect to participate. Find out from them what the specific next steps might be.

7. LISTEN! When a person makes a significant gift, it is usually their idea. You plant the idea and encourage them toward making a final decision.

8. End the initial appeal with an invitation or whatever follow-up is most appropriate.

Leadership Prospect Approaches

Remember:

Making a major gift is generally not a one-contact call. It could mean subsequent

contacts over a period of time.

Be prepared with suggestions as to the next step.

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