Most major donors will consider a leadership gift in the range of 10 percent to15 percent of the total campaign goal. This is a good rule of thumb to follow when rating a donor to determine the gift amount you should request. Some executive directors and development officers new to major donor world get really excited about finding a new prospect that could "write a check for the whole campaign." While a major donor might have the capacity to underwrite your entire project, he or she probably won't, unless they have an unusually close relationship to your organization. Major donors became major donors by making wise business decisions. They approach giving with the same diligence.
It's really a rookie move to ask for "the whole enchilada." When I served as a foundation director, I consulted with a ministry that was seeking to launch a $2 million campaign. I assisted the new development director with foundation research to discover possible grant opportunities that might align with their campaign. We identified a few prospects, but before I could map out a grant-writing strategy, she overnighted a $2 million proposal to the top foundation. Her unrealistic request revealed that the organization didn't have a comprehensive fundraising plan to energize its entire donor base. They were just hoping for the "Hail Mary" gift. Needless to say, the foundation declined the request and probably placed any future grant proposals from this ministry in the "clueless" stack.
One foundation director paints a descriptive picture when he says, "We want to be involved, but we don't want to be !" In other words, they don't want to have such an overwhelming influence that the success or failure of the campaign rests on them. There are five important reasons why diversifying your donor base is healthy for your ministry and your key donors.
1. Don't Put All Your Eggs in One Basket
The biggest danger in relying on one major donor to keep your organization afloat is that someday that major donor might lose interest in your mission and walk away — leaving you unprepared to walk by yourself. There are countless reasons why your gift income could "sprout wings, flying like an eagle toward heaven" (Proverbs 23:5). Major donors can go bankrupt, shift their focus to another cause, become disenchanted with the ministry leader, or fuss with board members. They even pass away — without remembering your organization with a bequest. If you haven't cultivated a relationship with the donor's spouse or children, there are no guarantees that they will continue supporting your ministry.
Solomon teaches the diversification principle, "Give a portion to seven, or even to eight, for you know not what disaster may happen on earth" (Ecclesiastes 11:2). Business people use this principle to manage their client base. Many CEOs get nervous when one particular client becomes more than 10 percent of the company's sales because relying so heavily on one revenue stream places the company in a precarious position. Markets can change overnight, and businesses that are the penthouse one week can land in the outhouse the next. Wise entrepreneurs diversify their client base with as many customers as possible in as many industries as possible in order to lower the impact of losing a major account. Ministries should approach their major donor strategy in the same way.
2. Big Frog, Little Pond
Consider this real scenario. A ministry with an annual budget of $10 million has six board members. Two give $10,000 each, one gives $5,000, another gives $7,500, one gives around $20,000 annually, and the last one gives $3 million. Wow! Praise God for each board member and their generous support of this ministry, but try as they might to have equal influence, they have a "fat boy" problem. This major donor is incredibly gracious and doesn't throw around his weight, but the fact remains that other board members naturally turn to him for any consequential decisions.
In this case, the major donor makes a conscious effort not to misuse his influence to get his way, but every major donor isn't that mature. It's great when donors put their money where their mouth is. Occasionally, a large gift gives donors the freedom to put their mouth where their money is. Executive directors need to handle these situations with care. On one hand, it's very healthy for an organization to cultivate donor passion and ownership, yet you and your board are the ones responsible for your ministry's direction. Organizations experience mission creep when they step away from their founding vision. Don't let one person pull you in a direction that compromises your mission — no matter how large the gift.
3. Donor Obesity Makes You Lazy
Some executive directors get a little too comfortable when they have several key donors in their back pockets. Gift income drops off a little and squeezes the budget? Don't worry. Bill will come to our rescue so we won't need to make hard budget decisions. Running a little behind at the end of the fiscal year? No problem. Mary will bail us out with a generous year-end gift. Looking to launch that capital campaign for the new addition? You can count on Jim. He's always been there, and I'm sure he'll give the lead gift. Major donors are a blessing, but sometimes ministry leaders take them for granted. Remember the mutual fund disclaimer, "Past performance is not a predictor of future results."
Solomon reminds us of the type of work ethic that leads to success, "In the morning sow your seed, and at evening withhold not your hand, for you do not know which will prosper, this or that, or whether both alike will be good" (Ecclesiastes 11:6). Not only does broadening your donor base protect your organization from the whims of one donor, it expands your gift opportunities. You don't know which of your major donors will step up and make a leadership gift. Each major donor has multiple interests and obligations; the timing for a gift to your ministry simply might not be right. Solomon's advice is to sow as much as possible because you don't know exactly which seed will produce fruit. One major donor might give, another might not, or possibly both will be exceptionally generous.
The key lesson is not to become complacent. Christian financial guru, Dave Ramsey, counsels people to approach their debt reduction with "gazelle intensity." Every day on the African plain, the gazelle wakes up with one thing on its mind, "Run for your life." If it lets down its guard for just a moment, it becomes vulnerable and may become lunch. Fundraising presents the same environment. If you grow content with your donor database, your organization will become vulnerable. You must constantly network to meet new friends and find new gift opportunities. Solomon understood why the hard-working farmer was successful. He sowed his seed in the morning, and at evening, his hands weren't idle (Ecclesiastes 11:6). With apologies to my female readers, I propose a new twist on an old adage, "A man works from sun to sun, but a fundraiser's work is never done."
4. Give Somebody Else a Chance
Major donors play a key role in building the kingdom, but God doesn't intend just a few people to carry the entire load. Paul referenced this when he prompted the Corinthian believers to give generously, "For I do not mean that others should be eased and you burdened, but that as a matter of fairness your abundance at the present time should supply their need, so that their abundance may supply your need, that there may be fairness" (2 Corinthians 8:13-14). Your pursuit of major donors is not so all the rest of your donors can sit on the sidelines and watch.
Ministries have a tendency to burn out major donors by going back to the same well time after time. Donor fatigue discourages your top contributors if they feel that others aren't getting involved. Major donors want your ministry to grow beyond their personal checkbooks. They desire to play a key role in something big but lose their enthusiasm when they sense that they're the only plow horse in your stable. Encourage your current major donors by involving other major donors.
Paul mentioned "fairness" to the Corinthians, but he's not implying that everyone should give the same amount. We all have different giving capacities. Paul is encouraging equal sacrifice. Your appeal to each donor is that he or she considers a generous, sacrificial gift, no matter the size. For some, $1,000 might be an incredible stretch, for others it's walking around money. While you must have a major donor component to your fundraising effort, don't overlook the fact that each donor and every gift is important. God's abundant blessings for bountiful sowing and reaping are not tied to a dollar amount. It's not just the major donors on your list that can give generously and reap generously. Expand your ask to every donor segment and give your entire constituency the opportunity to experience the joys of giving.
5. One Balloon Doesn't Make a Parade
I was interviewing a major donor in a feasibility study for an organization and asked him to rate the quality of the staff. He gave a mixed review. In his opinion, some were average, a few were below average, and one or two were exceptional. Then he made this profound statement, "But one balloon doesn't make a parade!" That's great advice for every ministry. Recruit the best team if you want the best results. His advice has a practical application to fundraising. Just because you have one major donor doesn't mean you have the horsepower to launch a multimillion-dollar capital campaign.
I've seen this principle play out on several different occasions. In one feasibility study, my first interview was with a former board member who indicated a lead gift of $1 million and shared that if some of his investments came together he might be able to give $1.5 million. My second call was with a mother and son-in-law who thought they could give $350,000 and might consider more as the campaign unfolded. Two for two is a pretty good batting average, but then the bottom dropped out. My conversations with the next twenty potential lead donors yielded only another $50,000. In one sense, anytime you discover a $1 million gift is a good fundraising day. Yet, the goal for this campaign was $10 million, so even $2 million in possible commitments is not enough to support that size of campaign.
The lesson of "one balloon parades" is that every organization has a limited donor capacity. Praise God for one lead donor, but don't rely exclusively on his or her involvement. Organizational growth should take a crawl-walk-run trajectory, and your donor base must grow at the same pace. Many organizations have $10 million dreams, but only $2 million capacities. Major donors will have more respect for your vision if it's rolled out in attainable phases. Don't start something you can't finish. Take measured steps and invite people along the parade route to join you.
Pay attention to fat boys, frogs, gazelles, and parade balloons to avoid major pitfalls in your major donor strategies.
Ron Haas is vice president of the Timothy Group in Grand Rapids, Michigan. He can be reached at email@example.com.