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Following A Plan, Plus Four Donor Identification Methods, Key to Finding Major Gift Success

A new study has some critical insights for major gift fundraising, including that charities are most likely to cultivate and receive major gifts when they follow a plan—regardless of what the plan actually is.

In addition, the 2017 Major Gifts Fundraising Benchmark Study, a collaborative effort of Association of Philanthropic Counsel (APC), one of its member firms (Melissa S. Brown & Associates), and one of the APC sponsors (MarketSmart), identified four key methods of donor identification that led to the most success in raising major gifts.

Not a lot of charities in the survey followed a process or plan all the time to identify major gift prospects. However, of the 37 percent who did, three quarters of those organizations met their major gift fundraising goals.

In contrast, 39 percent of charities said they have a process but don’t use it consistently, and 39 percent of those organizations met their major gift fundraising goals. One quarter (24 percent) don’t have a plan or never use a process, and 43 percent of those respondents met their goals.

While simply using ANY plan is probably not a good idea, the survey shows that charities who take the time to develop a formal process, and use it consistently, will find good results in their major gift fundraising.

“The single most important thing your organization does to raise major gifts is identify prospects, people who care about your mission and are able to consider a major gift, whether that is $1,000 or $100,000 for your group,” says Missy Gale, of M. Gale & Associates in Fort Worth, Texas, and immediate past chair of APC. “Organizations that use a process to identify major gifts – any process – and use it consistently meet their major gift goals most often. This was true across all sizes of charities, from those with revenue less than $500,000 to the largest in the study, with revenues above $25 million. The key is to be consistent in working to identify major gift prospects.

Best Donor Identification Methods

The survey also looked at what methods charities used to identify prospects, and what percentage of organizations used each one:

  • Knowledge of staff: 90%
  • Donor record/CRM (Customer Relationship Management) analysis: 78%
  • Prospect research: 76%
  • Referrals from donors or board members: 72%
  • Knowledge of board members, volunteers: 66%
  • Wealth Screening: 56%
  • Track Direct Engagement: 56%
  • Information from other organizations: 35%
  • Modeling “typical donor”: 33%
  • Track Digital Engagement: 28%
  • Donor Surveys: 21%

The survey then focused on those organizations who consistently met their major gift fundraising goals, and identified which methods were mostly closely associated with success. Those four methods were

1)     Analyze donor transaction records (used by 84 percent of respondents that met their major gift goals consistently)

2)     Employ tracking methods to understand how prospects engage online with your organization (used by 89 percent)

3)     Prospect research (used by 84 percent)

4)     Referral by other donors or volunteers (used by 85 percent)

"Some of the tried and true methods that we always talk about don’t seem to be super associated with success," said Melissa Brown, who conducted the research for the APC, in an interview with The Chronicle of Philanthropy. “For instance, a common practice of asking board members to rate prospects based on their ability and likelihood to give didn’t show up in the survey among the most effective methods for finding big gifts.”

Challenges

The survey also asked respondents about the biggest challenges in major gift fundraising. The top three were:

  • Not having enough staff or time in their own day (identified by 54 percent of respondents)
  • Board member involvement (47 percent)
  • Identifying gift opportunities to match with donor interests (41 percent)

Organizations with smaller operating budgets struggle more with board member involvement while organizations with larger operating budgets struggle more with identifying gift opportunities.

The survey also asked charities what is the minimum size of donation to be considered a major gift, and if they were currently involved in a capital or endowment campaign. Just over one-quarter (26 percent) had identified almost enough prospects for 2017 major gift requests, a new report finds. The other 74 percent had identified half or fewer of the major gift prospects needed for their 2017 goals.

“The vast majority of funds your organization can raise will come from major gifts,” said Jeff Schreifels, senior partner with The Veritus Group. “Prioritize your time and spend the most effort there. Draw in others to help with administrative tasks like, stuffing envelopes, entering donor information in your data base, etc.  Board members, student interns, someone will be willing to help if you just ask and have systems set up so they can implement them. Your focus should be on building relationships with your donors. Your donors are waiting for you to talk to them. You simply cannot be too busy for that.”

A full copy of the report can be found here. An infographic with key data from the survey can be found here.



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