The Donor-Centered Approach to Major Gift Fundraising
In fundraising, major gifts are often considered the holy grail. Still, in my experience, fundraisers don't really know how to deal with them. Sure, they look for opportunities to learn how to do major gift work. They read about the latest trends in tech, and understand the correct portfolio size and moves management system to implement, but they don't internationalize the message that there's one singular approach to success — relational fundraising.
The fact is that the major gift landscape is changing. Major gift donors are shifting away from giving exclusively to nonprofits, and just because you ask, they might not give. Regardless, every nonprofit should have a robust major gift program because they significantly impact the bottom line. However, securing major gifts isn’t easy and requires a different approach than other forms of fundraising. The process I've followed for the more than 4,000 major gifts asks I've made is through relational major gift fundraising.
The latest trends in major gift fundraising are good to know, and I'll share tips on what's happening, but first, I want to explain why I only use the relational major gift fundraising approach in working with this segment of donors.
What Is Relational Major Gift Fundraising?
An essential takeaway is to know that relational major gift fundraising is a donor-centered approach that focuses on building solid and long-term relationships. The process recognizes that major donors are often the result of a deeply personal and human connection among the donor, the executives and the organization. Therefore, fundraisers must invest time and effort into building and nurturing these relationships.
The key to relational major gift fundraising is to treat major donors as partners in the nonprofit's mission rather than just a funding source. When you do so, you significantly increase the chances of recurring gifts. So, the best fundraising practitioners understand that they must learn about donor passions and interests. It means learning about their lives and families, why they support nonprofit causes and even where they vacation. It also means keeping them informed and involving them in the decision-making process.
Nonprofits Are No Longer the Only Source of Social Impact
In recent years, in the conversations I've had with major donors, one theme is that they've shifted away from giving exclusively to nonprofits and are exploring alternative ways to create social impact. One of the main reasons for this shift is donor-advised funds (DAFs), which are popular vehicles for getting a tax deduction. But there are other reasons.
For instance, another trend impacting major donor giving is the rise of impact investment funds. These investment vehicles aim to generate a social impact — and offer investors (i.e., donors) a financial return. In short, today's donors don't believe they have to give a charitable gift for which they receive nothing in return. They're comfortable in making a difference with DAFs and impact investment funds.
Finally, another giving trend donors explore is for-profit social enterprises. For-profit social enterprises are structured to have a social or environmental mission and generate profits. These businesses can range from sustainable agriculture to renewable energy to affordable housing. They offer several advantages to major donors, including the potential for financial returns and the ability to leverage market forces to create social impact.
An essential reality nonprofit leaders know well is that few of the 1.8 million nonprofits develop the ability to scale significant impact over time. Moreover, traditional nonprofits are often bureaucratic and slow-moving. And at a time of incredible change, where everything is transformed seemingly overnight, fixing a problem over a 10-year horizon doesn't cut it.
How to Maximize Relational Fundraising to Better Position Your Nonprofit
Major donors no longer consider giving exclusively to nonprofits in the current complex philanthropic environment. As a result, they're exploring new and innovative ways to create social impact. Donor-advised funds, impact investment funds and for-profit social enterprises are all increasingly popular among major donors, offering a range of advantages and benefits. While this trend poses challenges for nonprofits, it also presents opportunities to lean into relational major gift fundraising and build the relationships that make a difference to the bottom line.
1. Get to Know Your Donors
The first step in relational major gift fundraising is to get to know your donors. Everyone’s busy, but take the time to understand their interests, motivations and philanthropic priorities. Also, learn about their personal and professional backgrounds, hobbies, career paths and family life. Knowing your donors requires building genuine relationships with them, which takes time and effort. Meet them in person and in the same space as often as possible — not on a Zoom or telephone call.
2. Personalize Your Approach
Every major donor is different. So, a one-size-fits-all approach is unlikely to succeed. Personalize your strategy based on the donor's individual interests and philanthropic goals. If they like the opera, go to the opera with them, or have dinner at their favorite restaurant. In other words, tailor your communications and interactions to each donor's unique preferences. As we all know, influencers constantly suggest the importance of being authentic as they hawk their products. Still, old-school relationships do in fact matter. People want to be seen and heard.
3. Foster a Culture of Philanthropy
Relational major gift fundraising is not just the development team's responsibility. It requires buy-in and support from across the organization. So, it’s vital to create a culture of philanthropy and allow fundraisers to work with other team members to ensure everyone understands the importance of major gift fundraising and how they can contribute to it. It might involve providing training or resources, or having program staff meet with major donors to share stories and updates. By fostering a culture of philanthropy, everyone plays a role in building strong relationships with major donors and prospects.
4. Focus on the Long-Term
Finally, it's important to remember that relational major gift fundraising is a long-term strategy. Again, building solid relationships with major donors takes time and effort. Therefore, fundraisers must build relationships that can sustain over time. And that almost always means not asking for a major gift when a fundraiser wants to ask for it. By investing in the relationship and demonstrating the value of the nonprofit's mission and impact, fundraisers build trust and engagement with major donors, leading to significant long-term support.
Relational major gift fundraising is the most powerful strategy for securing major gifts. By treating major donors as partners in the nonprofit’s mission, fundraisers create relationships that matter with major donors and prospects. In short, fundraisers are the face of the nonprofit, and, in the end, people will always give to people.
However, it's important to remember that relational major gift fundraising isn’t a quick fix or a transactional approach to fundraising. It requires patience, effort, and a commitment to building genuine relationships over time. But by investing in these relationships, fundraisers can secure significant support for their organizations and make a lasting impact on their missions.
The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.
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Paul D’Alessandro, J.D., CFRE, is a vice president at Innovest Portfolio Solutions. He is also the founder of High Impact Nonprofit Advisors (HNA), and D’Alessandro Inc. (DAI), which is a fundraising and strategic management consulting company. With more than 30 years of experience in the philanthropic sector, he’s the author of “The Future of Fundraising: How Philanthropy’s Future is Here with Donors Dictating the Terms.”
He has worked with hundreds of nonprofits to raise more than $1 billion dollars for his clients in the U.S. and abroad. In addition, as a nonprofit and business expert — who is also a practicing attorney — Paul has worked with high-level global philanthropists, vetting and negotiating their strategic gifts to charitable causes. Paul understands that today’s environment requires innovation and fresh thinking, which is why he launched HNA to train and coach leaders who want to make a difference in the world.