10 steps toward securing your first million-dollar gift
I love this topic! Fundraising practitioners like to talk about several types of gifts: for example, major, principal, and leadership. The truth is, they mean different amounts to different organizations and different amounts to the same organization, depending on where they are in their history.
With million-dollar gifts, there is absolute clarity on the standard.
Eskin Fundraising Training’s recent webinar explored this topic with Marv LeRoy, President and Founder of the Institute for Philanthropic Excellence. Like me, Marv has 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 for the nonprofit. 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 nonprofit enters coveted new 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 leaning on the art and science of fundraising, proven principles, strategies, and best practices, new organizations climb this beautiful hill every day of the year.
There’s never been a better time for a nonprofit 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 nonprofit can take to acquire its first million-dollar gift.
1. Your organization’s cause is distinctive and evokes a “Wow!” response.
There are about 1.5 million nonprofits in the United States. 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.
2. Your organization demonstrates its genuine investment through commitment to money, personnel, and facilities.
There’s an overused cliché, but it applies here: You must have skin in the game.
3. You give donors the ability to stretch their gifts through multi-year pledges.
Gifts of this magnitude are seldom paid as a lump sum, but rather paid over a 3-to-5-year pledge. Incidentally, many million-dollar donors like the appeal of challenge gifts that amplify their impact by triggering the generosity of others.
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.
5. You support a rational prospect identification system, such as CIA, in which C equals capacity, I equals inclination, and A equals access.
Capacity typically comes immediately to mind. But even if a prospect is very wealthy, there has to be an affinity for the mission of your nonprofit. And, even with inclination in place, the toughest hurdle is gaining access to a donor whom everyone wants to see and solicit.
6. You build million-dollar gift pipelines.
Donors rarely start out by donating $1 million to a nonprofit. They make much more modest gifts and watch how effectively those dollars are put to work, and how they are stewarded by the organization. Nonprofits which receive seven-figure gifts are masterful at acknowledging, thanking, and communicating impact on gifts of all sizes.
7. You hold up a marquee sign reminding donors that, while numerous million-dollar gifts can be made to good causes, there is only one first million-dollar gift.
Donors of first million-dollar gifts will forever be held up as heroes by the nonprofits they support at historic levels.
8. You don’t rush to judgments on giving capacity.
The groundbreaking book, The Millionaire Next Door, reminded 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 their means. There could be many of these millionaires in your databases who have been consistently donating modest gifts.
9. You overprepare for million-dollar solicitations.
There is no room 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 fairly 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 likely not be made during the initial request. 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.
10. Everything starts and ends with your organization’s leadership.
Your nonprofit’s CEO, executive director, board chair, and board development chair 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.
Consider this: America has about 20 million millionaires and about 1,000 billionaires. The six degrees of separation theory teaches us that everyone on the planet is separated by no more than six personal relationships. In many cities and communities, it’s more like two degrees of separation. You realize that your organization is worthy of million-dollar gifts. Now, your job is to work both hard and smart to earn them.