Demystifying the Major Gifts Process: Part 1 ā€“ Working with Major Gift Officers or Consultants

burnout founder's syndrome fundraising major gifts Oct 04, 2021

One of the number one questions I am asked is about raising major gifts. So, over the next four weeks, I will be delving into the major gift solicitation process.

  1. Working with major gift officers or consultants
  2. The foundations of why major donors give and how to talk with them
  3. How to identify major donors for your small to mid-sized nonprofit
  4. How to do the major gift ask (according to major donors who have been solicited hundreds of times)

 

Demystifying the Major Gift Process: Part 1 – Working with Major Gift Officers or Consultants

 

I am excited to launch a discussion of the major gift process and set the record straight on what I believe a major gift is, why major gift programs are essential and explain the foundations of understanding my process of soliciting major gifts.

There are a lot of misconceptions about major gifts and how they work that plague the industry. Today we will handle some misconceptions with the major gift officers or consultants.

 

Misconception 1: Major Gift Officers Have Relationships With Major Donors and Can Ask from their Rolodex

One of the biggest misconceptions is that “a good fundraiser brings with themselves a Rolodex of major donors” that they can “just ask for a favor” or “solicit a gift since it’s a shoo-in.” Yes, I’ve been told all of those things.

One reality hidden in these statements is true and is juxtaposed to a major fallacy that can completely ruin your major gift program.

The Truth: All major gift fundraising comes down to relationships. Someone (an actual person) has to speak with the donor (also an actual person) and at some point “ask” them to make a gift.

The Fallacy: I put “ask” in quotations because if you listen in on successful major gift conversations, you will quickly see that the major gift officer’s job is not to “ask” for the gift. The major gift officer’s job is to get to know the potential donor and see whether that person’s philanthropic priorities align with the organization’s work and trajectory. The ask only comes when the fundraising professional is relatively certain that the person’s giving would be good for BOTH the organization AND the benefactor.

Don’t get me wrong, some well-networked people can solicit millions of dollars of gifts from their network (celebrities, wealthy individuals, etc.), but that is not fundraising. This strategy may be employed for a new organization to get off the ground, but it is not a “strategy,” and it’s certainly not sustainable. It’s also no way to keep your friends! Many qualified major gifts fundraisers will come familiar with names, would have gotten to know many of the major donors in the area and industry, etc. But that isn’t what makes them successful. One of the best major gift officers I know came from a sales background and had no experience in fundraising. What makes him so good are his people skills, genuine curiosity, and love and passion for the cause, not his knowledge of the big guys everyone is talking to/about.

It may surprise you, but major donors do not give because of the person who asks (although they need to trust the person); donors give because they are compelled with the mission of the organizations, AND that mission aligns with their philanthropic priorities. I don’t care how much money the person has; they have to believe that the organization’s mission is important enough to give. It is extremely rare to see gifts that are a “special favor” and when those gifts come, it’s always a one-time gift far under the person’s capacity – usually, a “Mercy Gift,” as I call them.

 

Misconception 2: Success Will Come Before Professional Fundraisers Are Paid

I cannot tell you how many times I have been approached by an organization to fundraise for them using what I consider to be absolutely abhorrent tactics. Here are two actual quotes:

From the Organization:

“We need $500,000 in the next nine months. If you can raise that, you can keep everything you raise in addition to the $500,000. I mean, this is going to be a great [project] – you can easily raise $1,000,000. It would be well worth your time.”

My Thoughts:

Oh really, well worth my time. If it’s so easy to raise money for your project, why would you need to hire me? Have you considered whether the donors would even want to fund a project where 50% will pay one person? What do I say to the donor when I meet with them and have to explain how the money will be used?

From the Organization:

“[Executive Director] explained how your pricing works and what a starting retainer would be. However, our organization is new, and we could not afford to pay you with the risk that we would not have any return. Instead of what you suggested, I was thinking we could work on a commission basis where you could keep 25% of what you raised, or whatever percent you suggested until your contracted amount was fulfilled.”

My Thoughts:

Somehow many people seem to think that professional fundraisers are not worth paying. Maybe organizations have had a bad experience, or perhaps they fall into “Founder’s Syndrome” and honestly believe everyone would want to support their organization – including the fundraising professional as a volunteer. Any fundraising professional worth hiring would refuse to be paid on a commission basis – it goes against the Association of Fundraising Professional’s Code of Ethical Standards (https://afpglobal.org/ethicsmain/code-ethical-standards - see #24).

The misunderstanding of how major gift fundraising occurs causes many problems for organizations. Organizations want to hire someone to take or and take away their financial issues. While a fundraising professional can do a lot to alleviate financial stress and build a more consistent cash flow from giving, the expectations should still be aligned.

I want you to remember that a fundraising professional is a person, usually with a family – they are not ATMs. Fundraises undertake some of the most stressful and high-pressure work of the organizations, and they need to be treated well if you want them to stick around. Try this mindset shift on for size: Try to go from “How quickly can this person raise us the money” to “What can we do as an organization to help the new fundraising hire be as successful as possible.” Remember, many organizations need fundraising help – especially with major gifts. If you invest what you will be paying your major gift officer over two years only to burn them out, you will be like many nonprofits and keep churning these positions.

 

Misconception 3: If Our Fundraiser Is Not Working Out, We Will Fire Them

If your major gift officer or development director is struggling, don’t fire them – get them the help they need. I have been called in many times either by boards or development directors themselves to help them get back on track. May I propose that perhaps the problem is with your system, not the person?

As it turns out, the people who are great with relationship building and have profound caring energy about them are typically not the ones who are good at building systems or being creative. If you have a system in place to feed your major gift officer, the right person will be successful even with limited experience. I will discuss in a future article the actual process of identifying leads. For now, I ask you to reconsider the cost you have put into this hire, to keep them for one to two years, and that it will take that same amount of time for the next person to possibly succeed. It’s far less cost and risk to work on the person you have in place. Building a system costs one quarter to one half of a major gift officer’s annual salary without turnover and without another runway for the next person to come in and meet your community. Also, consider the social capital when your donors see another employee of your organization… gone. Some of your biggest donors may have grown quite fond of this person over the last year or two. How long will it take for your donors to get close to the next person? Probably longer than the last.

 

More Truth Bombs


Truth Bomb #1:

No matter how good and experienced a fundraising professional is, they still need to work with the organization’s contacts to solicit major gifts. If major gifts are about finding the people who align with your mission, it makes sense to look at those already involved in your mission.

 

Truth Bomb #2: 

It’s actually quite rare for a donor’s first gift to an organization to be a major gift. I will discuss this in a future article but suffice to say that one of the most successful strategies to increase major gifts is to upgrade existing donors. From my experience, I’d say more than 75% of major gifts I’ve solicited have come from people who gave a smaller amount. I would say that the average first gift of someone that later upgraded to a major gift is between $100 and $500. But I have seen high net-worth individuals who give over $1million per year make gifts as small as $25. Think about these people and how often they are solicited for money – they cannot give $100,000 every time they are asked!

 

Truth Bomb #3:  

On average, it takes a fundraising professional 12-18 months to get acquainted with an organization, its mission, and its contacts before totally new gifts that are truly attributed to the work of the Major Gift Officer will come in. For smaller organizations without a major gift program, it takes closer to 24 months, from my experience. After a few months, the newly onboarded fundraising pro should be able to jump in and maintain current relationships and even upgrade donors. Still, truly new gifts take time because relationships and trust don’t happen overnight.