Rule #5 for Board Members: Major Gifts Brings in the Most Money
Major gift fundraising can seem a bit mysterious.
Especially to board members, who often imagine unpleasant, awkward face-to-face solicitations.
But in reality – that’s actually not what happens at all.
Our one-on-one visits with donors are usually informative, productive, and enjoyable for both the donor and the fundraiser. If that’s not happening, then we wouldn’t be successful.
Good major gift fundraising requires lots of relationship development and prep work with the donor before we ever make an “ask.”
We get to know our donors. We take our time.
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Successful major gift fundraising requires patience, and lots of preparation. We have to wait till the time is right.
We don’t ask unless we think the donor is ready, and:
- The right person is doing the asking
- We know the donor well enough to know that they might say yes
- The timing is right
We are never pushy or aggressive.
If we ever make a donor feel rushed, then all is lost. Then our relationship with the donor takes a serious hit.
This post is an excerpt from my video education series for board members: The Board Member’s Guide to Fundraising: 10 Rules for Success Every Board Member Must Know.
It’s an easy guide for board members who want to understand how fundraising works today, what kind of strategies are most effective, and how they can help.
You can find out more and register for the Board Member’s Guide to Fundraising here.
So here’s the thing board members need to know:
Major gift fundraising is MORE about the overall relationship with the donor, and less about the ask.
The overall relationship is what yields those wonderful large gifts from our supporters.
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We fundraisers are in the business of fostering friendly, authentic long term relationships, over time, with lovely donors who care so deeply about our cause.
Board members are surprised to discover that it’s actually fun, as we get to know our donors and their interests.
Many board members think all we do is ask and ask. But actually the ask is one small step in a long, quite enjoyable process of engaging with the donor.
Which is more productive? Fundraising events or major gifts?
Here’s another key fact about major gift fundraising that board members need to know:
Major gift fundraising is the most cost effective way to raise money.
Why? Because the cost per dollar raised is around 5 or 10 cents on the dollar. Expenses are very low considering the large amounts of funding raised.
On the other hand, look at the cost of fundraising events. Many board members tend to promote events as a fundraising strategy.
But events are the least efficient and least effective ways to raise money. Why? Because the cost of raising money is so high.
The typical cost per dollar raised in fundraising events is 50 cents on the dollar.
Here’s an example: What if your organization needed to raise $250k for a particular project?
If you decided to have an event to raise the revenue, how much time, energy and resources might it require?
The event can be a huge effort, requiring a full army of hard-working staff and volunteers – for months. And it can drain everyone dry.
What’s worse, in order to net $250k from the event, you would need to bring in overall revenues of $500k. Why? Because it usually costs 50 cents on the dollar, and the expenses are so very high.
What about the more cost-effective major gift approach?
Instead, your organization could look for a major donor or two to underwrite the $250k project.
You’d consider which of your larger donors might be most interested in the particular project or program.
You’d select a few donors who might have both the financial capacity and the interest. These are people who are already very connected to your organization.
You’d approach them about this slowly, and ask them about their interest in this particular project.
- Do they think it’s a good idea to tackle this?
- How should we fund it?
- Is this something they would like to be part of?
- Would they want to help?
Watch these questions that I laid out above.
They are gentle. They engage the donor.
They are never, ever pushy. They lead the donor along a natural, organic path.
We always find out if the donor is interested before we take the next step of actually asking.
By using this far more effective technique, we can probably find a happy donor or two who wants to fund our $250k project.
Let’s compare the numbers between the event and major gifts:
- The fundraising event took an army of volunteers, countless time, energy and resources to raise the needed $250k.
- The one-on-one visits with donors took a small fraction of the time and energy of the event.
So you can see that the major gift approach is faster, easier, more productive, and a far better use of organizational resources.
I’m sharing all of this because, as a board member, it’s important for you to understand how these fundraising strategies work.
How major gifts is far more efficient and effective way to raise money. In fact, it’s THE most efficient and effective way.
Deploy your organization’s resources at the highest level.
As a board member, you want to be sure your organization’s resources are being directed to their higheset and best use.
You want to see your investments in the fundraising staff and budget product a high return on the investment.
Bottom Line: Rule #5 for Board Members: Major Gifts Bring in the Most Money for the Least Effort
Directing your fundraising staff toward events sets you up for a lot of work for less return.
Focusing more on major gift fundraising sets you up for a high return with less work.
Which fundraising strategy do YOU want to promote?
Here are the Board Member’s Rules for Fundraising Success posts to date:
Share these with your board members. Then get them the video series “10 Rules for Fundraising Success Every Board Member Must Know.”
Rule #1 for Board Members: Fundraising is Based on Relationships With Donors
Rule #2 for Board Members: Know Your Fundraising Roles and Responsibilities
Rule #3 for Board Members: Fundraising Has a Significant Return on Investment
Rule #4 for Board Members: The Easy Money is in Donor Retention
Rule #5 for Board Members: Major Gifts Bring in the Most Money
