The success of your major gift program depends first and foremost on the quality of your donor acquisition program.
I know right now there are major gift officers all over who are reading this and thinking, that’s a bunch of bull! Success in major gifts requires SO MUCH MORE!
That’s not wrong. Success in any area requires that you do many things correctly. But this, I know with certainty. If you want to grow and scale a major gift program you need to focus (or re-focus) on your donor acquisition efforts. If your organization is really good at getting $5, $10, or even $15 donors, you’re going to have to work REALLY hard to develop meaningful relationships with those people and move them up the giving ladder to a point where they can make significant, “investment-level” gifts to your organization. However, because you brought them on the file at such low dollar amounts, we know two things about them. First, the likelihood that you’ll retain a majority of them is very low. In fact, in testing we’ve seen that retention rates for donors with largest gifts under $25 are significantly lower than those with largest gifts over $25. And second, when a donor comes on your file at $5 or $10, you tend to continue asking them to give at that level — because it’s what they’ve “always” done. My good friend and co-author, Roy C. Jones, CFRE, likes to say that “the biggest mistake fundraisers make is asking a millionaire for $15”. And he’s right.
Fixing this is simple, but not always easy. If you want to build and scale a major gift program, and develop a pool of potential major donors, you need to change the way you think about donor acquisition. You can’t think about it from the perspective of “refilling for attrition,” or replacing the NUMBER of donors that you lost to lapsing in the most recent year. Instead, you need to shift your thinking to replace the VALUE that you’ve lost. That frees you up to get outside the donor volume game and focus on donor quality. Instead of acquiring a bunch of $5, focus on acquiring more $35, $50, and $75 donors. You will no doubt get fewer total new donors. But that’s ok. You’ll be acquiring donors who have a greater likelihood of sticking around. They’ll also be more likely to upgrade, and will have significantly higher Long-Term Value than lower dollar donors. If you have a well thought out plan to engage those donors as soon as they give you that first gift, you’ll be able to identify those who are interested in deeper relationships and get them immediately into a mid-level or major gift portfolio. Those who aren’t can remain in your standard fundraising program.
In the short-term, yes. You’ll raise less money. However, if you do this well, you could increase total revenue by six or seven figures within a year or two.