In countless prospect identification meetings with professional and volunteer nonprofit leaders, invariably the subject of wealth and financial capacity is the immediate and dominant trigger of names.
To be sure, financial capacity is a huge factor, but I would argue that passion for the mission and cause carries more weight. In other words, a prospect with passion will dig more deeply into their pockets than a prospect with more wealth but less passion. It is our job to help donor prospects understand an ever-changing financial terrain.
Fortunately, there are more options than ever that can help donor prospects stretch the amount and impact of their gifts. Let’s review some of these strategies:
1. Always start prospect discussions with a review of current donors. This might seem obvious, but it’s surprising how often it is bypassed. Your current donors remain the most promising prospects for future and larger gifts, since they have already demonstrated a commitment to your mission and trust in the organization. Plus, they are eminently accessible for meetings and discussion. No doubt, you are in steady communication with donors as part of your stewardship practices.
2. Consider the power of monthly giving. We’ve featured Erica Waasdorp, President of A Direct Solution, in our Eskin Fundraising Training webinar series on several occasions as a subject matter expert on monthly giving, about which she so cogently and enthusiastically writes, speaks, presents, and promotes through social media. She certainly has made me a convert. You can’t beat the return on investment. The cost associated with maintaining a monthly giving program is low, and new technology is lowering it every day. The average monthly donor gives $25 a month. Typically, monthly donors stay with the nonprofit for 5 to 7 years. So, do the math, and you’re talking about a supporter worth $2.1 thousand.
3. Pledge periods are common during capital campaigns. Typically, donors are given three to five years to cover a larger gift than they have ever made before. Signed letters of intent are crucial to formally establish payment expectations when you’re running a capital campaign.
4. Blend gifts that combine current and deferred elements. Legacy gifts provide powerful tools to significantly increase the gift while postponing any out-of-pocket expenditure. The most common options are charitable bequests, retirement plans, and life insurance policies.
5. Consider gifts of stock and equities. In this historically robust market, many of your donors are likely holding enormously appreciated assets. Donating these stocks to their favorite nonprofits can help them avoid costly capital gains taxes.
6. Bundle together gifts from family members and close friends. This makes perfect sense when the purpose of the gift has strong appeal across generations. It also opens the door to keep on building the size of an endowment or other project over time.
7. Welcome volunteer time to magnify the impact of the cash gift. There is a huge connection between the giving of time and money. The more the donor gives of one, the more likely they are to give the other.
8. Suggest donor-advised funds (DAFs).These have become the most dynamic component of American philanthropy. They allow donors to make a charitable contribution, receive an immediate tax deduction, and then recommend grants from the fund over time. How big have they become? During the first half of 2021, from Fidelity Charitable alone (the nation’s largest grant maker), donors recommended a record $4.3 billion in grants—27 percent more dollars than in the same period in 2020. Altogether, more than 123 thousand charities benefited from these donor-recommended grants. DAFs deserve priority visibility on websites, marketing material, and in conversations with donor prospects.
9. Instill a sense of urgency. Be specific, and share real life stories of how gifts and especially how each additional dollar will more profoundly touch, improve, and save more lives. It’s not unusual for donors to ask for more time, and they need to understand what a difference it makes to give the gift now instead of later.
10. Perhaps, I should’ve started with this step: Be sure to challenge the donor prospect to give a specific amount by a specific time for a specific purpose. We live in a price tag-oriented society, and philanthropy shouldn’t be treated any differently. The requested amount should be a stretch but also realistic, based on giving history to the nonprofit, philanthropic nature, and financial capacity and liquidity.
There couldn’t be a better time to be asking. There are a record 20 million millionaires and about one thousand billionaires in the United States.
It is noteworthy that these “major gift” best practices can and should be used to empower donors at all giving levels to give more and give more frequently, whether the resulting gift is $1 thousand, $10 thousand, or $1 million.
Consider solicitors and donors part of a unified team working together to address a timely challenge or problem. We’ve established that the donor believes in doing their part, and now, we work together to achieve the greatest possible impact.
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