For many nonprofits—whether small and emerging or big and established—a handful of major donors play an instrumental role in your bottom line. While these donors might make up a small segment of a nonprofit’s donor base, they account for a large percentage of its annual revenue. According to the Alliance of Arizona Nonprofits, as much as 90% of nonprofit fundraising revenue comes from major donors.
In this guide, we’ll walk through the process of how to establish major donor tiers as well as strategies for growing your major donor program. We’ll look at:
- Why major donors are important
- How to identify your major donors
- Strategies for stewarding a major donor
Why major donors are important
In the big picture, major donors are important because they allow nonprofits to grow their impact by funding their programs and operations. More specifically, they carry three main benefits:
- Major donors give your fundraising team “breathing room” to develop long-term plans. Think of it this way: It can take a lot of small gifts (and a lot of effort soliciting those small gifts) to reach your fundraising goals. For example, it would take 800 donations of $25 a piece to match a single $20,000 gift. Major donors can give you time to consider your big-picture fundraising strategy, and ultimately make your small gift fundraising more effective.
- Major donors set a precedent for giving. Research from the University of Wisconsin shows that gifts from major donors “signal to all other givers that the charity is of high quality.” When major donors make a donation, smaller donors, in turn, become more likely to offer you their support as well.
- Major donors are more likely to donate more money. In 2020, nearly 90% of “affluent donors” gave money to charities, and these donations have a big impact. According to the IRS, households with an annual income of $2 million or more account for nearly one-third of the money donated to nonprofits each year.
How to identify your major donors
If you’re in the early stages of developing a major donor program, you can start identifying your major donors using a relatively simple process. Below, we’ve broken it into three main steps: (1) setting a threshold amount, (2) creating a list of existing and potential donors, and (3) determining which donors from your list have the greatest giving potential.
Step 1: Set a threshold amount.
In this first step, you’ll use your existing donor data in your constituent relationship management system to set the minimum amount you define as a major gift.
- Generate a list of all your donors and all the donations they made to your organization last year. As an example, let’s consider an organization with 100 donors in the past year.
- Sort the list with the biggest gifts (and donors’ names) at the top. You’ll list, for example, that Sherlock Holmes donated $20,000, Harry Potter donated $10,000, Jane Eyre donated $8,000, and Elizabeth Bennet and Clarissa Dalloway each donated $5,000 a piece.
- Calculate the total fundraising dollars received last year and then determine 75% of your total. In our example, let’s say your donors contributed a total of $50,000. 75% of the total would be $37,500.
- Starting at the top, add up gifts until you hit that 75% number. In our example, to hit $37,500, we’d include the top three donations.
- Identify the donation amounts that contributed to that 75%. In our example, that’s $20,000 from Holmes, $10,000 from Potter, and $8,000 from Eyre. However, because this is such a small number of donors, we may choose to also include Edna Pontellier and Holden Caufield’s $5,000 among our top gifts.
You’ll then be able to determine who is a major donor using this 75% mark threshold. Anyone that contributes enough to be part of that top 75% is a major donor, and the rest of your donors will make up the remaining 25%. For instance, in our example, we’ll set it at $5,000. Anyone who donates above this amount should be considered a major donor.
Step 2: Create a list.
When creating your list of major donors, start with those with whom you have the best relationship, and work outward. Take the list of existing major donors created in the prior step and add notes about:
- Identifying anyone else you’d like to include on this list based on their leadership, gift potential, lifetime giving, or planned gifts. Supporters don’t necessarily have to be wealthy to become a major donor. For example, you may find that many of your small, recurring donors have both the financial capacity and interest in becoming large donors.
- Leveraging your board member relationships. Whether yours is a working board or a fundraising board, adding them and their relevant contacts to this list will help you grow your fundraising capacity.
Think of this list as a living document from which you’re regularly adding and removing names. Over time, as your program gets off the ground and you acquire more major donors, you’ll be able to nuance your processes, adjust your thresholds, and better source and tailor your list.
Step 3: Determine those with the greatest giving potential.
Finally, you’ll determine your organization’s most promising donors on your list based on a combination of wealth and philanthropic factors. We recommend using a scoring model that helps determine who on your list you should contact first. Consider the following elements in your scoring model:
- Relationship to your nonprofit. Has the person been a recipient of your programs and services? Add a point for each year of activity or for each occasion.
- Activity with your nonprofit. Often, the most likely prospects for major gifts already have a link to your organization. Consider board members, staff, and volunteers who might be good prospects for major gifts. Score a point for each activity they’ve participated in during the past three years.
- Giving summary. Among those donors who haven’t made major gifts, consistency may be more valuable than gift amounts. Award a point for each consecutive year a person’s made a gift.
- Birthdate. Age may indicate a person’s available assets. Prospects with school-aged or college-aged children may not have disposable income or assets to donate. On the other hand, retirees may be in a better position to give. You might, for example, assign a point for each decade a person is over 40.
- Employer. Is there potential for a corporate gift as well as a personal one? If yes, add a point.
- Professional title. Is your prospect an owner, principal, or decision-maker at a large company? If yes, score a point.
- Giving History. Have they made previous major gifts to your organization or another nonprofit? Score a point for each gift made.
For each donor prospect, note your points, then total them at the end. Individuals with both a high giving affinity and capacity will be your highest major donor prospects and the ones to focus your attention on first. Once you’ve developed and organized your list, you can begin to take steps to gain their support.
Strategies for stewarding a major donor
Now that you’ve identified your major donors, the next step is deciding how to build and strengthen these important connections.
Below, we’ve compiled the most important strategies for acquiring a major donor:
Meet with your prospects.
In-person meetings are the single most important step you can take to acquire a major donor. A one-on-one meeting shows prospective donors that their support will make a critical difference to your organization and your organization highly values their contributions.
You’ll want to put your best foot forward in preparing for a major donor meeting. For best results, follow these steps:
- Secure the appointment. Plan for 30 minutes of making phone calls to secure one appointment. That includes leaving voicemails, speaking with gatekeepers, and scheduling the meeting.
- Choose a meeting place. When deciding where to meet with prospects, look for a quiet place to meet on your turf or theirs. Meeting at their office, for example, demonstrates respect for their time, while meeting at your headquarters can give them a better understanding of how you deliver on your mission.
- Prepare for the meeting. You’ll usually want up to 30 minutes prior to the visit to conduct research, prepare pertinent materials, and plan for the visit.
- Ensure enough time for a productive meeting. Budget two hours for each visit and don’t forget to leave yourself time to travel to each appointment. When you’re scheduling back-to-back meetings, it’s better to have extra time between appointments than to rush the end of a valuable conversation.
- Conduct follow-up. Plan for up to an hour post-visit for follow-up correspondence, internal coordination, and planning next steps.
On average, you should budget four hours per major gift appointment. Understand this isn’t time spent all at once, but it will impact your overall work week. Approximately 10% of your working hours should be committed to major gift fundraising. If you’re just starting out, try doubling that to 20%. Try to schedule at least two face-to-face visits each week. These can be discovery visits or stewardship visits—all that matters is getting started and committing to your goal.
Ask open-ended questions.
Once you have a donor’s attention, what should you say? While you might feel obliged to share every detail of your nonprofit’s work, it may be more productive to give your attention to the prospect and give them space to talk.
Instead of lecturing them about your nonprofit’s work, probe their philanthropic passions and habits via a series of open-ended questions, such as:
- What made you give to our organization in the first place, and what motivates you to keep giving?
- What do you like most about our organization? What are some things you would change?
- What do you think we should be doing more of or better?
- What advice would you give our organization?
- What other organizations do you volunteer for or give to and why?
- Would you consider volunteering for us in X or Y program?
Use what you learn to continue the conversation in person and via email. Stewarding a donor can take months, so be ready to have long, detailed conversations about these topics. After each conversation, record their responses in your database to refer back to in the future.
Do your research and keep it organized.
Conducting research allows you to tailor your engagement and outreach to each prospective donor. The more information you have on a donor, the better informed you’ll be, and the better your conversations will go.
Beyond their name, address, phone number, and email, consider storing the following information on major donors in your management system:
- Birthdate. As noted above, age can be a good indicator of giving capacity. A donor’s birthday is also a great touchpoint for your donors.
- Spouse name. Knowing a spouse’s name can make your life easier when you’re addressing event invitations. You should also consider attaching children’s names to donor records.
- Employer. Does this donor’s employer offer matching gifts? What about corporate sponsorships?
- Key roles in your organization: Has this donor also served as a volunteer, board member, event host, or fundraising ambassador?
- Social media profile links. A donor who is very active and feels comfortable sharing on Twitter, Facebook, and LinkedIn can help you with your next peer-to-peer campaign.
- Communications record. Track all communications sent to and received from each donor.
- Meeting notes. After each conversation, record a summary in the person’s record.
- Action steps. Assign tasks and reminders to make sure you follow up with major donors on outstanding items. For example, even if you haven’t set a time for a follow-up conversation with the donor, do set a task to remind yourself to reach out so that the next steps can be determined.
Having the right kind of information about your major donors is almost as important as the way you organize that information. To keep it as accurate, accessible, and safe as possible, use a donor management system. A management system allows your team to access a prospect or donor’s information and track larger patterns in your major giving program with the click of a button.
Share your appreciation regularly.
Some of your best major donor prospects are your previous major donors. In fact, after the first donation, they’re likely to contribute again. They already know about your organization and are invested in helping you make an impact.
So show them how much you appreciate their support. Doing this on a regular basis serves as a reminder of both your gratitude and your continued need for support. Here are some ideas:
- Individual meetings. As we’ve mentioned before, face-to-face meetings are always the most valuable way to build and maintain a strong donor relationship.
- Group meetings. Invite your major donors and prospects to the home or club of a peer leader, ideally someone who is already a major donor, for a chance to mingle and network with like-minded advocates.
- Gift anniversary. Saying thank you is a comfortable reason to reach out with a phone call or card, and it gives you an opportunity to request a face-to-face meeting.
- Birthday. Same as the gift anniversary, this event offers another opportunity to thank donors for their support and show them how much they matter to your organization.
- Special events. Design certain events to cater specifically to your major donors. Invite them to galas, auctions, happy hours, or book clubs, where you can engage them in conversations that may lead to continued donations.
Ultimately, a major donor program takes time and commitment. Launch your major giving program with the recommendations above, and as you become more comfortable with each step, build this strategy into your fundraising plan on a monthly basis.
To continue to develop your major donor program, check out these additional resources:
- Major Gifts: The Comprehensive Guide for Nonprofits. Now that you’ve learned about major donors, jump into this guide to learn all about the gifts they make.
- What Is Legacy Giving and How to Get Started With It. Because of its deferred nature, legacy giving is an important but often overlooked type of major giving.
- Gift Range Calculators: How to Build a Custom Gift Chart. Follow this step-by-step guide to develop a gift range calculator and determine the number of major donors you’ll need for your next fundraising campaign.