MAJOR GIFTS FUNDRAISING

Aiming High: First Million-Dollar Gift

I have been there on numerous exuberant occasions when a small or mid-size nonprofit brought in its first million-dollar gift. This is nothing less than a game-changer. The gift rises above transactional to transformational status. It means much more than an infusion of cherished capital to fuel the expansion of good works. The non-profit enters coveted fresh territory in which it is widely viewed as a good place for leadership donors to invest seven-figure gifts.

Is it possible for a small or mid-size nonprofit to obtain its first million-dollar gift? You bet it is! By applying best practices and persistence, new organizations climb this beautiful hill every day of the year.

There’s never been a better time for a non-profit to make securing its first or next million-dollar gift a top priority. The stock market remains the best predictor of philanthropy, and it has soared to historic levels. Plus, the tax incentives are extremely attractive.

Let’s consider 10 proactive steps that your non-profit can take to acquire its first million-dollar gift.

1. Your organization’s mission and projects are distinctive and evoke a “Wow!” response.

   With about 1.5 million non-profits in the U.S., donors are forced to make difficult choices – not between the good and the bad, but between the good and the good. Your case for support must demonstrate impact that other organizations don’t. Bring your board, staff, key donors, and friends together for an open-ended and frank discussion of what differentiates your organization from all the other worthy causes, particularly those that share the same mission space. Be completely honest and address both strengths and weaknesses. Don’t expect the final draft to come together overnight. This is worth the investment of considerable time and commitment painstaking honesty in your cumulative best thinking. Simply put: What claims can you all make that all those others can’t? This should address both your organization in general and, more narrowly, your fundraising priorities. This discussion can also expedite preparation of your case for support.

2. Your organization demonstrates its powerful internal commitment through investment in money, personnel, and facilities.

   There’s an overused cliché, but it applies here: You must have skin in the game. The measures of this commitment can and should take many different forms covering capital infrastructure and especially the time of management, staff, volunteers, and all those who share a commitment to the realization of your mission becoming more robust. There’s a tendency to underestimate this total. Don’t make that mistake. Your list should be exhaustive.

3. You give donors the ability to stretch their gifts through multi-year pledges and other ways.

   Gifts of this magnitude are seldom paid as a lump sum but paid over a three- to five-year pledge. Incidentally, many million-dollar donors like the appeal of challenge gifts that amplify their impact by triggering the generosity of others.

   The donor and you sit on the same side of the table. You share a common passion for the vision of making the mission of the organization or the goal of the project to achieve its greatest potential.

   Here are other tactics to consider:

   Make monthly giving easy and visible. Erica Waasdorp, who I like to call The First Lady of Monthly Giving, highlights enormous returns on minimal investment — more giving, higher retention, doors opening to major and planned gifts, to name just a few.

   Also, make sure Donor Advised Funds (DAFs) are visible on your website, in your marketing materials, and especially during solicitations. This is the most dynamic component of American philanthropy. Fidelity Charitable donors alone recommended grants totaling more than $9.1 billion benefiting 170,000 charities during 2020.

   Another proven tactic is to bundle together gifts from family members and close friends. This makes perfect sense when the purpose of the gift has strong appeal across generations. It opens the door to keep on building the size of an endowment or other project over time. And it also provides a wonderful way to bring families closer together through shared philanthropic aspirations.

4. You embrace creative funding models, such as the blending of current and deferred dollars.

   Planned giving has become more popular than ever. The most popular forms are charitable bequests, retirement plans, and insurance policies. Such planned gifts can empower donors to double (or more) their philanthropic investment. Legacy gifts provide powerful tools to significantly increase the gift while postponing any out-of-pocket expenditure. Typically, a donor can give several times as much from their estate than they can from income and current wealth position.

5. Consider the enormous potential gifts of stock and equities.

   In this historically robust market, many of your donors are likely holding enormously appreciated assets. Donating these stocks to their favorite non-profits can help them avoid costly capital gains taxes. Returning to Willie Sutton’s logic “because that’s where the money is,” approximately 97% to 99% of all wealth in the U.S. is held in assets like stocks and real estate — not cash — so donors are able to give more with these gifts. You would be surprised to learn who is holding multi-million-dollar stock portfolios. This includes next door neighbors who appear to be leading very modest lifestyles.

6. You build million-dollar gift pipelines.

   Donors rarely start out by donating $1 million to a non-profit. They make much more modest gifts and watch how effectively those dollars are put to work, and how they are stewarded by the organization. Non-profits which receive seven-figure gifts are expert at acknowledging, thanking, and communicating impact on gifts of all sizes. In other words, they steward a $10,000 donor like a million-dollar donor.

7. You hold up a virtual marquee sign reminding donors that, while numerous million-dollar gifts can be made to worthy causes, there is only one first million-dollar gift.

   Donors of first million-dollar gifts will forever be held up as heroes by the non-profits they support at historic levels. Smaller and mid-size non-profits enjoy the advantage of offering first million-dollar hero status to more donors and prospects. Imagine what a legacy it is to be the first donor to contribute $1 million to an important non-profit or cause.

8. You don’t rush to judgments on giving capacity.

   The groundbreaking book, The Millionaire Next Door, by Thomas J. Stanley and Willaim D. Danko, reminds us that people of wealth don’t all live on Park Avenue or Rodeo Drive. And they seldom lead showy lifestyles. They achieve their wealth by consciously living below, not above, their means. There could be many of these millionaires in your databases who have been consistently donating modest gifts. As mentioned earlier, historic rises in the stock market have produced more millionaires than ever before. Consider this reality: The U.S. now boasts about 1,000 billionaires and 22 million millionaires — something our grandparents and parents could never dream of coming to fruition. Wealth has exploded exponentially at the same time the pandemic has multiplied human service, health, educational and numerous other needs met by the non-profit sector.

9. You overprepare for million-dollar solicitations.

   This is no place for winging it. Those involved in making the ask — whether virtually or in person — must prepare like they’re going into surgery. You typically want to move to the ask early in the meeting to allow sufficient time to respond to questions and concerns. Always remain absolutely silent after the ask is made and wait for the prospect to respond. A decision may not be made during the initial meeting. Be meticulous in following up on research that must be conducted, questions to be answered and, most importantly, setting a specific date to get back together to bring the solicitation to closure. Like everything else that is important in life, major gifts — especially million-dollar gifts — are earned. Here’s encouraging news: Every million-dollar solicitation — successful or not — will place you in a much stronger position the next time you reach for the stars in asking.

10. Everything starts and ends with your organization’s leadership.

    Your CEO, executive director, board chair, board development chair and others must be intimately engaged in the discovery, cultivation, solicitation, and stewardship of first and next million-dollar gifts. Delegating this huge responsibility solely to the development director dooms the outcome to failure. And every professional and volunteer non-profit leader must make a stretch commitment to the organization and new projects if they are to have any credibility soliciting those outside the organization.

There is no more cost-effective way to develop resources than through major gifts — much more so than special events. The core ingredients of success are the passion of the non-profit’s leadership and their commitment to develop and sustain relationships that mature into genuine friendships.

I once heard a relationship defined as something you have until something better comes along. Earning major gifts and the ultimate reward of first and next million-dollar gifts demands the steady nurturing of friendships that last a lifetime and culminate in transformative gifts of time and money. You realize that your organization is worthy of million-dollar gifts. Now, your job is to work both hard and smart to earn them.