Following on my last post on Math for Fundraisers, talking about the “equation” for seeking gifts, in my same meetings we discussed how many prospects we were going to need to identify.
The equation I am discussing today is 144 = 9, or 16:1.
To recap, on my team at Aga Khan University (AKU), we are seeking gifts from nearly all new prospects. Therefore, we are working on identifying many prospective donors, most of whom can make gifts in the seven- to nine-figure range with some in the five- or six-figure giving range simply because all or most of the donors will be first-time donors to AKU. So, we need to meet lots of prospects, begin discussions, and explore the prospective donors’ interests and capacity.
Most fundraisers are familiar with the ABCs of prospects:
- Ability – Evidence that the person has the ability to make the size of gift you are looking for.
- Belief – Evidence that the person believes in your cause, or would believe in your cause if they knew about your cause.
- Connection (or Contact) – Evidence that the person has a connection to your organization (or knows a person within the group of supporters) or some other kind of contact that helps with the Transfer of Trust.
- Pattern – One thing I would add… Evidence that the person has a pattern of giving. (Jerry Panas talks about people who give mega gifts having a track record of giving… of course, there is always the first large gift a person makes, but I agree that with major donor prospects it is important to know if they are already supporters of other causes.)
My colleagues took a theoretical approach to thinking about how many gifts we might need for a campaign (say for $50 million).
With this $50 million giving pyramid, one might estimate one $25 million gift, one $10 million gift, two $5 million gifts and give $1 million gifts (again, theoretically). A total of 9 successful gift solicitations.
My colleague Steve went with the theory that we would need to solicit four prospects to secure one gift (we might have the Ability, Belief and Connections lined up, have done good research and discovery, but still somehow miss the mark around timing, interest, capacity, etc.). We would like to believe that we succeed 100% of the time (and perhaps eventually over the lifetime of the campaign most solicitations will successfully close) but we cannot always be correct on the timing or level of support.
By this accounting, for every one successful donation solicitation secured, we estimate we will ask four qualified prospects – so 4 asks each at the $25 million and $10 million giving levels, 8 asks at the $5 million level and 20 asks at the $1 million level. A total of 36 solicitations of qualified prospects. Of course, as we go along the campaign, we may find that we are successful 30% of the time or 50% of the time… but we don’t know that yet.
And how many prospects will we have to identify in order to move ahead and ensure they are qualified prospects? Again, we are estimating that we will need to have four identified prospects for each qualified prospect. (Because on our team we are exploring large gifts, we usually can easily determine if the giving capacity and past philanthropy are already in place.) At this point we are estimating that we would need 16 individuals identified as needing more discovery at both the $25 million and $10 million giving levels, 32 individuals identified at the $5 million level and 80 individual prospects for the $1 million level. A total of 144 identified prospects that need meetings in order to qualify them, which will hopefully result in 9 successful solicitations.
We could now delve into the total wealth the person or couple should have for a gift (the solicitations should usually represent no more than 10% of their net wealth) and the amount of time to cultivate a prospects (which could be 18 to 36 months, or longer or shorter). But you likely get the drift… lots of individuals to meet and talk with, to discover their interests and give them the time to get to know your organization, what they are doing to solve a problem or injustice in the world, and to develop trust in you (the fundraiser) and the leadership of the organization.
The Major Gifts area of fundraising deserves a long-term commitment by the fundraiser and by the nonprofit (front-line staff, board and volunteers). To assist you, I’ll recommend two blogs: Veritus Group (lots of very practical advice for fundraisers, skewing brainy) and Gail Perry (more very practical advice, skewing conversational).
For books, I cannot say enough good things about Mega Gifts by Jerry Panas, even if you just asking for “big” gifts, whatever that is in your organization. (Amazon link). He has another book which is great for discovery, Power Questions.
And if you haven’t read either Donor Centered Fundraising (US or Canadian edition) by Penelope Burk please, please buy one for your office so that your colleagues will learn about her research. I also LOVE her latest book Donor Centered Leadership (I will be posting a review soon.) Both these books (and her philosophy) speak to the needs of donors and everything is about retaining their support and engaging them meaningfully. (Amazon link or Cygnus link).