A Major Plus for Major Gifts

Many organizations have successfully used the Internet for direct-response and special-events fundraising, but few have tapped its potential for major giving. The question nonprofit professionals should ask is whether online marketing and constituent relationship management can support major-donor identification and cultivation.

Historically, major-gift efforts primarily have sourced donors two ways: referrals from key donors and board members; and direct-mail programs.

In the referral model, development officers target high-net-worth individuals and find ways to speak to them via existing relationships. In the direct-mail model, donors who give large gifts — by direct-mail standards — or who fit certain predictive model factors, such as giving tenure and frequency, are screened and targeted for major gifts.

For example, in the article “A Wealth of Opportunity” in a recent edition of the FS Advisor, a representative from the Heritage Foundation was quoted as saying that direct mail was its “largest source of future major donors,” specifically that “60 percent of $10,000-plus donors started out as regular direct-mail donors.” When a mail donor gives a single gift of $1,000 or more to the Heritage Foundation, the organization contacts the individual to begin building a stronger relationship and evaluating his or her potential for making a larger gift.

Just as with postal mail, an online marketing program can be a “feeder channel” for major-gift efforts. Online marketing allows an organization to cast a wide net to entice potential supporters to learn more. Online marketing also represents a low-cost donor education and cultivation channel that can supplement traditional, in-person, major-donor cultivation activities. Similar to postal mail, when an online constituent shows support by making a gift online, it indicates he or she is worth cultivating for a major gift.

Consider the experience of the American Red Cross Mile High Chapter in Denver. In response to Hurricane Katrina appeals in September and October 2005, this organization raised $1.5 million online. Two hundred twelve new contributors gave online gifts of $1,000 or more. The organization segmented this constituency and sent a series of cultivation e-mails to keep them apprised of how their contributions were being spent. It also sent e-mails and handwritten invitations encouraging these donors to participate in events. Six of these major-donor “prospects” decided to participate in events; four actually took personal tours of the chapter. In this case, online fundraising and eCRM sourced more than 200 prospects for major gifts and enabled the organization to identify six previously unknown, near-term prospects.

Reach existing donors
Beyond sourcing potential major-donor targets, eCRM also is an effective method for supporting cultivation of relationships with existing constituents. Many major-gift-centric fundraising organizations arrange regular fundraising events such as galas attended by hundreds of people. Often, attendees fit the profile of good major-gift prospects, but it’s rare for an organization to systematically follow up with all of them. Major-gift officers generally only have the capacity to develop about 50 relationships at a time.

An organization with hundreds of potential major-gift prospects can use an eCRM approach to cultivate people en masse and “bubble up” the best targets for attention by major-gift officers. Through personalized e-mail marketing and Web site communications, a nonprofit can engage prospects, learn about their interests and use that information to entice them to learn more about and get involved with the organization. A nonprofit also can use this approach to steward relationships with existing donors and sustain regular contact with them after they make a contribution.

Through eCRM, it’s possible to track a constituent’s activities and interests, e.g., e-mails opened, articles read or fundraising appeals prompting responses. This information is valuable because an organization can use it to personalize online communications and provide talking points for major-gift officers.

Vinay Bhagat is founder, chairman and chief strategy officer at Convio.