Ollie Rothmann By Ollie Rothmann • February 23, 2021

    How To Stop Depending On Major Gifts For Revenue

    Major gifts are the lifeblood of many nonprofits. We have all heard the old saying about 10 percent of the donor base giving 90 percent of the fundraising revenue, and for good reason. But, have we all taken this for granted? Have we become too dependent upon these major donors? What do we risk by placing all of our focus on such a small segment of our audience?

    How To Stop Depending On Major Gifts For Revenue

    A survey of 104 colleges conducted by researchers at the consulting firm EAB revealed that one quarter of college fundraisers said gift revenue dropped by 30% in the last half of 2020, compared to the same time period in 2019. To me, this makes sense. Due to the economic times, fewer people participated so the revenue went down. The major donors continued participating because that's how it has always been, right?

    Wrong. The main cause of this decline was, in fact, reduced giving by major donors. Among the public colleges surveyed, the volume of major gifts that they received between July 1 and December 31 plummeted by 70 percent. Overall, gifts of $25,000 or more slid by a median of 11 percent. Clearly, there is something more at play here.

    Try to step into the shoes of a high capacity donor and think about your past year. How many nonprofits have solicited you for donations? Have ask amounts gone up? Or even, how many of these solicitations are first-time solicitations?

    Most major gift donors give at the levels they do because they are passionate about the causes they are funding. However, when economic times are tough -- like during this past year -- discretionary spending wavers. Instead of giving to five organizations, they might only be able to give to three this year. Therefore, two organizations that have become overly dependent upon this major gift is left scrambling for replacement revenue.

    While the status-quo may seem tempting during a year of extreme turbulence, being able to adapt with the times is actually healthier for the long term health of the organization. You should continue to give the necessary attention to the top of your giving pyramid, but give just as much attention to backfilling your donor pipeline with mid-level donors and even annual fund participants.

    Schools like Towson have done just that with Gravyty’s artificial intelligence (AI) technology. With an alumni base primarily made up of people in their 20s and 30s, the development team at Towson needed to figure out how to engage these young alumni so that they could build their donor pipeline.

    In the first month of usage, Gravyty was able to suggest 855 prospects that had never been contacted before to Towson’s 10 gift officers to begin outreach. The team took action to contact 619 of these alums via personalized email using Gravyty First Draft and more than 100 additional via text message, phone call, or hand-written letter. As a result, fundraisers set up 33 new meetings with prospects and donors, in addition to the hundreds of alums who they personally engaged with...in just one month.

    Are you ready to achieve better portfolio saturation and grow the giving pipeline? Talk to a Gravyty specialist today and see how AI is transforming fundraising.

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