gwln major gifts

Fundraising 101:Fundraising 101:Major GiftsMajor Gifts

Who, What, Why and HowWho, What, Why and How

Carlos F. Camargo, Ph.D.Carlos F. Camargo, Ph.D.

Arête Management ConsultingArête Management Consulting

For GWLN Stakeholder TrainingFor GWLN Stakeholder Training

Where the Money Is........Where the Money Is........

• Giving USA – Americans donated $303.75 billion to Giving USA – Americans donated $303.75 billion to charitable organizations – a decrease of ~4 per cent charitable organizations – a decrease of ~4 per cent over the previous year.over the previous year.

• CorporationsCorporations $14.10 billion $14.10 billion 4.0% 4.0%• Foundations $38.44 billionFoundations $38.44 billion 13.0%13.0%• Individuals $227.41 billionIndividuals $227.41 billion 75.0%75.0%• Bequests $23.80 billionBequests $23.80 billion 8.0% 8.0%• Individual giving was 83.6% or $207.72 billionIndividual giving was 83.6% or $207.72 billion

Expect the Most Money Expect the Most Money from the Least People!from the Least People!

Often astounding to new fundraisers, the following Often astounding to new fundraisers, the following factsfacts

finds experienced fundraisers nodding their heads finds experienced fundraisers nodding their heads knowingly…knowingly…

• Ten percent of your goal in a campaign comes Ten percent of your goal in a campaign comes from a single giftfrom a single gift

• Approximately 80 to 90 percent of incoming Approximately 80 to 90 percent of incoming funds are donated by 5 to 10 percent of the funds are donated by 5 to 10 percent of the donors or constituenciesdonors or constituencies

• Without major givers, an annual campaign begins Without major givers, an annual campaign begins with two strikes against it. Finding these with two strikes against it. Finding these prospects and persuading them to fund you prospects and persuading them to fund you generously is the keystone of your campaign generously is the keystone of your campaign

Who Are They?Who Are They?

• There are some common attributes but we all There are some common attributes but we all know people who do not fit this mold:know people who do not fit this mold:

• Over age 55Over age 55• Male (although women hold more than 50% of Male (although women hold more than 50% of

the wealth in the country)the wealth in the country)• MarriedMarried• Conservative – however, there are many large Conservative – however, there are many large

givers to very liberal causesgivers to very liberal causes• ReligiousReligious• Approaching retirementApproaching retirement• History of givingHistory of giving

Who Are They?Who Are They?

• History of involvementHistory of involvement• Hold mixed assets (combination of stocks, Hold mixed assets (combination of stocks,

bonds, real estate, venture holdings, etc)bonds, real estate, venture holdings, etc)• Has a family foundationHas a family foundation• Owns a businessOwns a business• Has inherited wealthHas inherited wealth• The most important of these is mixed assets The most important of these is mixed assets

since a major gift is given from assets since a major gift is given from assets unlike an annual gift which will come from unlike an annual gift which will come from income.income.

Excellent Indicators of Excellent Indicators of major gift potential:major gift potential:

• Death in the family that leads to inherited Death in the family that leads to inherited wealthwealth

• Retirement – usually with a “golden Retirement – usually with a “golden parachute”parachute”

• Marriage into wealthMarriage into wealth

• Sale of a business or a propertySale of a business or a property

• Success in venture capital or real estate dealSuccess in venture capital or real estate deal

• No dependents or heirsNo dependents or heirs

• Financial windfallFinancial windfall

Excellent Indicators of Excellent Indicators of major gift potential:major gift potential:

• Company takeoverCompany takeover

• All of the above are also indicators All of the above are also indicators for a planned giving prospectfor a planned giving prospect

Why You Need ThemWhy You Need Them

• A major donor is significant because his or A major donor is significant because his or her gift is large enough to make a real her gift is large enough to make a real differencedifference..

• In every development plan there should be a In every development plan there should be a major gift plan since it is the most successful major gift plan since it is the most successful and cost-effective way to seek private fundsand cost-effective way to seek private funds

• Their gifts can support current programs, Their gifts can support current programs, new programs which are not in the current new programs which are not in the current budget, and capital needs. budget, and capital needs.

Major Gifts come from Major Gifts come from Someone who knows Someone who knows youyou

• Major gifts come from someone who Major gifts come from someone who has an extraordinary commitment to has an extraordinary commitment to your organization your organization

• They usually come from insiders – They usually come from insiders – board members and other close board members and other close friendsfriends

• They are generally motivated but They are generally motivated but many times have not been many times have not been recognized as potential giversrecognized as potential givers

Why People GiveWhy People Give

• Figuring out what will motivate a donor to Figuring out what will motivate a donor to give is one of the most important aspects of give is one of the most important aspects of major gifts fundraising. The definition of major gifts fundraising. The definition of motivation might be: those factors within a motivation might be: those factors within a person combined with external forces that person combined with external forces that move him or her to make a donation. If we move him or her to make a donation. If we consider Maslow’s Hierarchy of Needs for consider Maslow’s Hierarchy of Needs for fundraising, we must accept his theory that fundraising, we must accept his theory that a person does not move up on the scale of a person does not move up on the scale of needs until all the needs in a lower needs until all the needs in a lower category are met. category are met.


• An individual is not likely to become An individual is not likely to become a major prospect until he or she has a major prospect until he or she has completely satisfied needs at the completely satisfied needs at the safety and physiological levels. But safety and physiological levels. But once a person starts looking for once a person starts looking for connections and acceptance, relating connections and acceptance, relating to a nonprofit is a natural outlet. to a nonprofit is a natural outlet.


• Paul H. Schneiter in Paul H. Schneiter in The Art of The Art of AskingAsking points to seven reasons: points to seven reasons:

• Religious BeliefsReligious Beliefs• GuiltGuilt• RecognitionRecognition• Self preservation and fearSelf preservation and fear• Tax BenefitsTax Benefits• ObligationObligation• PressurePressure

Four Prerequisites for Four Prerequisites for SuccessSuccess

• Every organization must have a clearly Every organization must have a clearly stated and well-recognized mission in stated and well-recognized mission in place. The following are essential to that place. The following are essential to that mission – they are basic and simple – but mission – they are basic and simple – but often overlooked:often overlooked:

• CauseCause – the socially desirable result you – the socially desirable result you hope to achieve. It must be significant, hope to achieve. It must be significant, have a direct impact on society, and a have a direct impact on society, and a sense of immediacy.sense of immediacy.

Requisites for SuccessRequisites for Success

• Case Case – statement of how an – statement of how an organization is going to achieve the organization is going to achieve the result. It shows why funds are needed result. It shows why funds are needed and the specific funding priorities and the specific funding priorities related to these needs. Gives prospect related to these needs. Gives prospect clear reasons why they should support clear reasons why they should support you and clearly outlines what makes you and clearly outlines what makes your activities better or different from your activities better or different from those of othersthose of others

Requisites for SuccessRequisites for Success

• OrganizationalOrganizational IdentityIdentity – your – your organization must be recognized for the organization must be recognized for the issues on which you work. There should issues on which you work. There should be an immediate linkage in the public’s be an immediate linkage in the public’s mind the case of the organization’s mind the case of the organization’s programs to the cause being addressedprograms to the cause being addressed

• People People – the internal and external – the internal and external constituencies of the organization must constituencies of the organization must all be drawn into the fundraising process all be drawn into the fundraising process for it to be successfulfor it to be successful

Where Are They?Where Are They?

• The purpose of the research process is to The purpose of the research process is to estimate the maximum gift a prospect could estimate the maximum gift a prospect could make if properly motivated by the organization. make if properly motivated by the organization.

• Finding out facts about prospects helps you Finding out facts about prospects helps you decide which activities will affect gift decide which activities will affect gift motivations. motivations.

• The ultimate aim is to find the The ultimate aim is to find the right person right person to to ask the ask the right prospect right prospect for the for the right amount right amount in in the the right wayright way for the for the right amount right amount at the at the right right timetime..

How do you find them?How do you find them?

• Prospect research is an essential Prospect research is an essential component – it must be ongoing and component – it must be ongoing and continuouscontinuous

• Changes in a prospect’s financial holdings Changes in a prospect’s financial holdings or family situation can obviously have a or family situation can obviously have a dramatic impact on his or her potentialdramatic impact on his or her potential

• What are the best sources for information What are the best sources for information on a prospect:on a prospect:

• In-house recordsIn-house records• Computer information you can accessComputer information you can access• Newspapers, business journalsNewspapers, business journals


• Personal contacts with volunteers, other prospectsPersonal contacts with volunteers, other prospects• Prior donorsPrior donors• People who have shown an interest in your People who have shown an interest in your

organizationorganization• VendorsVendors• Past and present Board MembersPast and present Board Members• People with historical or family ties to the People with historical or family ties to the

organizationorganization• EmployeesEmployees• NeighborsNeighbors• People with interest in similar causesPeople with interest in similar causes


Prospect Research Traditional ResourcesProspect Research Traditional Resources

• The Social RegisterThe Social Register

• Who’s Who in AmericaWho’s Who in America

• Standard and Poor’s Register of CorporationsStandard and Poor’s Register of Corporations

• Dun and BradstreetDun and Bradstreet

• America’s Wealthiest PeopleAmerica’s Wealthiest People

• Who’s Who (various professions)Who’s Who (various professions)

• Quantus (stock holdings for top executives)Quantus (stock holdings for top executives)


Online Databases and ServicesOnline Databases and Services

• Dataquick (real estate)Dataquick (real estate)• Edgar online – (SEC filins)Edgar online – (SEC filins)• Federal Election Commission – tray.comFederal Election Commission – tray.com• Forbes.com (net worth)Forbes.com (net worth)• Hoovers online – corporate affiliations, SEC Hoovers online – corporate affiliations, SEC • documents, compensationdocuments, compensation• Insider Trader Insider Trader • LexisNexisLexisNexis


Online ServicesOnline Services

• Power Reporting (collection of websitesPower Reporting (collection of websites• with public information)with public information)• 10K Wizard (search on SEC filings)10K Wizard (search on SEC filings)• Wall Street Executive LibraryWall Street Executive Library• Wealth Zip Codes of the ISAWealth Zip Codes of the ISA• Where to do Research (many links)Where to do Research (many links)• www.wheretodoresearch.com

http://www.wheretodoresearch.com/

How do you find themHow do you find them

Electronic ScreeningsElectronic Screenings

• Marts and LundyMarts and Lundy• Wealth EngineWealth Engine• Prospect Information Network (PIN)Prospect Information Network (PIN)• (now part of Kintera)(now part of Kintera)• Blackbaud AnalyticsBlackbaud Analytics• Caution – expensive data provided varies and mustCaution – expensive data provided varies and must• mesh with your donor database to use well, mesh with your donor database to use well,

involves involves • a clear cut plan for usea clear cut plan for use

Rating them Once You Have Rating them Once You Have Found ThemFound Them

• In developing a prospect pool, an organization should begin In developing a prospect pool, an organization should begin by bringing together all of its internal resources to evaluate by bringing together all of its internal resources to evaluate prospect potential. prospect potential.

• Then take the results to volunteer leaders and seek their Then take the results to volunteer leaders and seek their advice. advice.

• This process involves careful evaluation of gift potential for This process involves careful evaluation of gift potential for each prospect and the assignment of a gift range. The each prospect and the assignment of a gift range. The ratings are based on all your research, prior gift records, ratings are based on all your research, prior gift records, and the judgments of volunteers who know the prospects and the judgments of volunteers who know the prospects well.well.

A simple schedule of A simple schedule of ratings:ratings:

• RatingRating Gift Range Gift Range• AA $5 million +$5 million +• BB $1 million to $4.99 million$1 million to $4.99 million• CC $500,000 to $999,999$500,000 to $999,999• DD $250,000 to $499,999$250,000 to $499,999• EE $100,000 to $249,000$100,000 to $249,000• FF $ 50,000 to $ 99,000$ 50,000 to $ 99,000• GG $ 25,000 to $ 49,000$ 25,000 to $ 49,000• HH $ 10,000 to $ 24,999$ 10,000 to $ 24,999• II $ 5,000 to $ 9,999$ 5,000 to $ 9,999

How to Develop a Rating How to Develop a Rating ScheduleSchedule

• Create ranges in light of giving to the Create ranges in light of giving to the organizationorganization

• Prospect may be rated as a million dollar Prospect may be rated as a million dollar potential, but what if he has only given potential, but what if he has only given $1,000 to your organization$1,000 to your organization

• Prospects can be rated for both annual Prospects can be rated for both annual gifts and major gifts (annual comes out of gifts and major gifts (annual comes out of income and major from assets)income and major from assets)

• Donors to an annual fund can be solicited Donors to an annual fund can be solicited for a special major gift to support a for a special major gift to support a specific prospectspecific prospect

For ratings keep two factors in For ratings keep two factors in mind: mind:

• Ability to GiveAbility to Give

• Inclination to GiveInclination to Give

Rating SessionsRating Sessions

• Raising major gifts requires that you Raising major gifts requires that you segment the prospect pool, emphasizing segment the prospect pool, emphasizing those who are worth the most effort.those who are worth the most effort.

• The aim of researching and rating The aim of researching and rating prospects is to define the top 10 percent prospects is to define the top 10 percent of the organization’s constituency – the of the organization’s constituency – the people who can make the real difference. people who can make the real difference. Prospects at lower levels will also be Prospects at lower levels will also be identified through this processidentified through this process

Rating SessionsRating Sessions

• Seek ability ratings only – ask volunteers to Seek ability ratings only – ask volunteers to rate prospects on their ability to give if rate prospects on their ability to give if properly motivatedproperly motivated

• First level is a broad screening process where First level is a broad screening process where volunteers identify everyone with potentialvolunteers identify everyone with potential

• Second level is where you seek peer-level Second level is where you seek peer-level ratings from those who know the prospects ratings from those who know the prospects wellwell

• Process is confidential and well organizedProcess is confidential and well organized

Cultivation or Getting to Cultivation or Getting to Know YouKnow You

• In development terminology, the In development terminology, the word “cultivation” means educating word “cultivation” means educating potential donors about an potential donors about an organization’s mission and needs organization’s mission and needs before they are asked for a giftbefore they are asked for a gift

• Usually the larger the gift, the more Usually the larger the gift, the more preparatory steps have to be taken.preparatory steps have to be taken.

• Cultivation takes place slowly over a Cultivation takes place slowly over a period of timeperiod of time

Cultivation or Getting to Cultivation or Getting to Know YouKnow You

• Cultivation should not be aimed at Cultivation should not be aimed at getting only one gift – it should focus getting only one gift – it should focus on establishing a habit of giving with on establishing a habit of giving with significant gifts coming at key pointssignificant gifts coming at key points

• Your most important cultivation Your most important cultivation targets should be prior donorstargets should be prior donors

Establishing your moves Establishing your moves management programmanagement program

Cultivation occurs in three ways:Cultivation occurs in three ways:

• Mass impersonal eventsMass impersonal events

• Smaller-directed eventsSmaller-directed events

• One-on-One personal interactionOne-on-One personal interaction

• However, with some major prospects, However, with some major prospects, you might jump over the first two, and you might jump over the first two, and focus on personal interaction.focus on personal interaction.

Establishing your moves Establishing your moves management programmanagement program

A development officer says there are A development officer says there are five steps in “the Cultivation Cycle”five steps in “the Cultivation Cycle”

• IdentificationIdentification

• InformationInformation

• InterestInterest

• InvolvementInvolvement

• Investment Investment

There is a process as well There is a process as well as an art in cultivationas an art in cultivation

• The key to success with major gifts relates to The key to success with major gifts relates to thinking about a potential donor more as a thinking about a potential donor more as a “person” rather than as a “prospect”. “person” rather than as a “prospect”.

• The aim is to involve wealthy people The aim is to involve wealthy people intimately and genuinely with your intimately and genuinely with your organizationorganization

• In order to accomplish this, you must create a In order to accomplish this, you must create a formal process called “moves management” formal process called “moves management” which allows you to bring the potential donor which allows you to bring the potential donor closer to the organization.closer to the organization.

Art of Cultivation Art of Cultivation

• Each donor is assigned to a volunteer Each donor is assigned to a volunteer or staff for cultivation and needs to or staff for cultivation and needs to have a certain number of have a certain number of interactions per year – the higher the interactions per year – the higher the prospect scores on ability and prospect scores on ability and propensity – the more “moves” that propensity – the more “moves” that person will have per yearperson will have per year

Asking the Big Question - Asking the Big Question - who should do the who should do the asking?asking?

• If the correct cultivation has taken place, the If the correct cultivation has taken place, the ask can really be a rewarding experience – ask can really be a rewarding experience – both for the asker and the donorboth for the asker and the donor

• Soliciting a major gift almost always requires Soliciting a major gift almost always requires a personal visita personal visit

• The asker should be of equal or superior The asker should be of equal or superior status to the prospect – they can be a status to the prospect – they can be a prominent volunteer, chief administrative prominent volunteer, chief administrative officer, artistic director, or key members of officer, artistic director, or key members of either the development or the administrative either the development or the administrative staff.staff.

How Should they Ask?How Should they Ask?

There are three stages in the There are three stages in the solicitation process:solicitation process:

• Preparation for the face-to-face Preparation for the face-to-face meetingmeeting

• The meetingThe meeting

• Follow-upFollow-up

The AskThe Ask

• The solicitor – who has made his or her own The solicitor – who has made his or her own generous commitment to the organization – generous commitment to the organization – engages the potential donor in meaningful engages the potential donor in meaningful conversation – and it is amazing how much conversation – and it is amazing how much information can be gatheredinformation can be gathered

• Always use open-ended questions such Always use open-ended questions such as….In your opinion, what are the most as….In your opinion, what are the most important projects that need attention? important projects that need attention? Some people say…..what do you think of Some people say…..what do you think of that?that?

What are the questions the What are the questions the potential donor is potential donor is thinking?thinking?

• Is it the best?Is it the best?

• Will it perform the way they say it will?Will it perform the way they say it will?

• Will it have a lasting impact?Will it have a lasting impact?

• How will I be paid back for my How will I be paid back for my investment?investment?

Think carefully how you can answer Think carefully how you can answer thesethese

questions throughout your conversationsquestions throughout your conversations

What is the most important What is the most important part of the meeting?part of the meeting?

• You will have to do more listening You will have to do more listening than talking – and that is not easythan talking – and that is not easy

• Listening is a selective process – a Listening is a selective process – a good listener hears all, but chooses good listener hears all, but chooses to respond only to his/her speaker’s to respond only to his/her speaker’s most important points. most important points.

• Respond only to those topics Respond only to those topics germane to your solicitationgermane to your solicitation

Listening ……Listening ……

• Good listeners are alert – they listen with a Good listeners are alert – they listen with a purpose and ask questions that will get them purpose and ask questions that will get them the information they wantthe information they want

• Good listeners are empathetic – attempt to Good listeners are empathetic – attempt to understand what the speaker is saying. understand what the speaker is saying.

• Good listeners are not defensive – many Good listeners are not defensive – many times we spend our listening time times we spend our listening time formulating responses and counter-formulating responses and counter-arguments. When you do this – you are not arguments. When you do this – you are not listeninglistening

Learn to summarizeLearn to summarize

• Another very effective method of Another very effective method of winning over your prospect is to winning over your prospect is to summarize what you have heard …. I summarize what you have heard …. I hear you saying that…… or Let me be hear you saying that…… or Let me be sure I understand what you have said. sure I understand what you have said.

These summaries are effective for a These summaries are effective for a number of reasons:number of reasons:

Summarize…Summarize…

• Give evidence that you have listenedGive evidence that you have listened

• Encourage your prospect to listen to Encourage your prospect to listen to youyou

• Suggest areas of common groundSuggest areas of common ground

• Help avoid hostilityHelp avoid hostility

• Encourage your prospect to respect Encourage your prospect to respect you as a reasonable and empathetic you as a reasonable and empathetic personperson

Objections……Objections……

• An objection actually gives you a wonderful An objection actually gives you a wonderful opportunity to clarify any issues. An effective opportunity to clarify any issues. An effective method of dealing with objections is to remember method of dealing with objections is to remember three little words – three little words – Feel, Felt, Found.Feel, Felt, Found.

• I know how you I know how you feelfeel• Others have Others have feltfelt the same way the same way• And upon further study, what we have And upon further study, what we have foundfound is is

that this is one of the most effective ways of that this is one of the most effective ways of reducing violence in the middle school among reducing violence in the middle school among nine-year olds…..nine-year olds…..

Setting their sightsSetting their sights

The prospect may not be initially thinking The prospect may not be initially thinking ofof

a gift at the level you will ask them toa gift at the level you will ask them toconsider – you may need to consider doingconsider – you may need to consider doingthe following:the following:• Share with the prospect some of the Share with the prospect some of the

other lead giftsother lead gifts• Discuss the value of leadership gifts to Discuss the value of leadership gifts to

the campaignthe campaign

Setting their sightsSetting their sights

• Explain the importance of their Explain the importance of their participation in the campaign to participation in the campaign to securing other major gifts securing other major gifts

• Discuss the tax advantagesDiscuss the tax advantages• If working with a key volunteer, have If working with a key volunteer, have

him or her discuss their own stretch him or her discuss their own stretch gift to the campaign because of the gift to the campaign because of the importance of the needimportance of the need

Asking for a thoughtful and Asking for a thoughtful and proportionate proportionate commitmentcommitment

• Although decisions regarding the Although decisions regarding the magnitude of the investment rests with magnitude of the investment rests with the prospect alone, you will need to ask the prospect alone, you will need to ask for a contribution that is based on their for a contribution that is based on their ability to give, their understanding of the ability to give, their understanding of the organization, and their interest in the organization, and their interest in the projectsprojects

• In order to secure gifts at this level – you In order to secure gifts at this level – you must ask for them! must ask for them!

Other Important Points to Other Important Points to ConsiderConsider • What if your prospect’s considered pledge is What if your prospect’s considered pledge is

far below evaluation?far below evaluation?• Negotiate – you do not have to accept the Negotiate – you do not have to accept the

first offerfirst offer• Thank them for considering a pledge, but Thank them for considering a pledge, but

tell them you would like them to think tell them you would like them to think further before making a decision – this further before making a decision – this project is so important to the organizationproject is so important to the organization

• ““If you do not consider a gift at the ___level If you do not consider a gift at the ___level given your degree of interest and ability, given your degree of interest and ability, who else might we ask for such an who else might we ask for such an investment”investment”

Asking…..Asking…..

• Remember – we are asking for an Remember – we are asking for an investment in a major investment in a major community assetcommunity asset

Keep in MindKeep in Mind

• Remember this advice from John D. Remember this advice from John D. Rockefeller, Jr. one of the earliest major Rockefeller, Jr. one of the earliest major philanthropists and fundraisers:philanthropists and fundraisers:

““Never think you need to apologize forNever think you need to apologize forasking someone to give to a worthy asking someone to give to a worthy

cause,cause,any more than as though you were givingany more than as though you were givinghim an opportunity to participate in a highhim an opportunity to participate in a highgrade investment”grade investment”

Keep in MindKeep in Mind

• The role of a solicitor is to The role of a solicitor is to guideguide and and gaugegauge the prospect’s increasing the prospect’s increasing interest, to interest, to determine determine the highest the highest possible level of support the prospect possible level of support the prospect can consider and finally to can consider and finally to askask for for that support. that support.

The Follow-UpThe Follow-Up

• Always thank the prospect in writing for Always thank the prospect in writing for seeing you. Use the letter to share even seeing you. Use the letter to share even more information about the cause.more information about the cause.

• If a pledge was given or a gift made, thank If a pledge was given or a gift made, thank the donor yourself but also have the Board the donor yourself but also have the Board president and CEO send their letter.president and CEO send their letter.

• If no commitment was made, thank them If no commitment was made, thank them for their time and send any appropriate for their time and send any appropriate informationinformation

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