How a small nonprofit can establish a major donor strategy

January 20, 2021
7 minutes

Funraise loves small nonprofits. Small nonprofits make the world go 'round! They connect communities. They address niche needs. They have their fingers on the pulse of their local ecosystem.

And in moments of extreme need, like the COVID pandemic, they stretch resources and reach out 'til there's nothing left.  

If your small nonprofit team needs more budget so you can continue your important work, we'd like to offer a suggestion for your development team (or person, or you, if you wear all the hats)—try a major donor strategy.

Major donors can work for small nonprofits hoping to get the most bang for their buck, if bang is ROI and buck is resources allocated to fundraising. Without the benefit of major gifts officers and massive fundraising teams, small nonprofits may have a harder time implementing a major donor strategy, but that doesn’t mean it’s not worth your while, even if it takes time to set it in motion.

Let’s talk about how you and your nonprofit can get it done.

What’s a major donor?

Let’s back up a little bit. What’s a major donor, anyway? It’s not a military title, for starters.

Fun fact: 88% of all nonprofit gifts and/or donations come from just 12% of donors. While there’s no hard and fast rule as to what constitutes a major gift, think back to budgets of years past and remember where that money came from. Was there a good chunk of your budget that was raised from a few sources? You might want to consider those sources major donors... or at least potential major donors.

In fact, try this: Label anyone who donates more than your average donor a potential major donor. We’ll come back to this in a minute.

What’s a major donor strategy?

A major donor strategy is a strategy designed to build a long-term relationship with a donor who provides funds that are significant to your organization. What "significant" means to your nonprofit and to the donor will be different across nonprofits and donors, though.

Major donor strategies might also focus on ways to attract super generous supporters, some of who perhaps haven’t heard about your nonprofit and its mission yet, but who would likely be inclined to donate sizable amounts of money—with which you could do sizable amounts of good—once they understand your nonprofit's need.

Why is it important that small nonprofits have a major donor strategy?

First, small nonprofits often don’t have the same fundraising resources as gigantic foundations or nonprofits with huge teams. Major donors can be a great option for small nonprofits—you can focus on building relationships and expressing your org's need, but with a bigger return as an effect of your effort.

Second, smaller nonprofits generally have smaller donor or supporter lists as those aforementioned gigantic foundations or nonprofits with larger staffs. While all nonprofits appreciate every $5 donation, the fact remains that a $5 donation from every donor on a small nonprofit’s list will ultimately be worth less (at least monetarily, if not emotionally) than $5 than everyone on the American Red Cross’s mailing list, because the Red Cross has a much larger mailing list than any small nonprofit.

How can smaller nonprofits begin to establish a major donor strategy?

Now that we’ve established why a major donor strategy is important, let’s discuss how you can start to establish a major donor strategy that will work now and for years to come.

The first step is identifying the major donors already giving. The data that your nonprofit has on hand should be enough to identify these major donors: make a list of the donors whose contributions make up 75% of your budget. There are your major donors.

And check your mindset! Do you think to yourself that your mission is worthy but too small for big money? Think again! Look at the good you do for your community. Look at the impact you've had. And get ready to tell that story of impact and the need that goes along with it. Get ready to get donors feeling like they *can't* not support.

Finally... take the advice of nonprofit growth experts like Sherry Quam Taylor, who explains that understanding your nonprofit's true need is half the battle on the Nonstop Nonprofit podcast.

What are the next steps?

After identifying who your major donors are—and by extension, what counts as a major gift for your nonprofit—identify what your major donors have in common. What attracted those donors to your nonprofit? Why do these major donors care about your mission?

Once you realize what attracts major donors, use those same attractive qualities to lure other major donors. Maybe you could publish a case study highlighting your most successful campaign or client story and send it to prospective major donors.

Continue to dig deeper into the data you already have. This is easier if you have access to technology like Funraise’s Fundraising Intelligence, but a CRM will work, no problem! Tease out similarities between specific large donations or and the dates on which they took place.

This should help you focus your efforts on moments that are ripe for major donor campaigns. You might identify a particular type of event that inspires your major donors to open their pockets for your small nonprofit.

Looking ahead

By establishing a major donor strategy, small nonprofits set themselves up for long-term success. Major donors are integral to the health of small nonprofits—and when 88% of your donations come from 12% of your donors, it’s clear where nonprofits should focus their efforts.

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