A newsletter from North American YMCA Development Organization Volume 32 | Number 1 | February 2018
GAME-CHANGING MAJOR DONORS
Ys have a distinct advantage when it comes to securing sacrificial major gifts.
By the very nature of how we engage people, involve volunteers, embrace and connect members and donors, we build meaningful, long-tenured, relationships and devoted volunteers. These relationships often develop into very generous philanthropic giving – leadership level gifts sometimes far greater than anyone expected, including the donors themselves.
Case I: The donor who surpassed his own gift intent.
We had agreed that the campaign chair, accompanied by the CEO, would ask for the pivotal gift to name the new YMCA. It was a couple days later when the chair began to express his discomfort. I assured him that this gift would allow the Y to break ground, build and open, and that he was the person to influence the decision. To our surprise, he not only made a most impassioned solicitation, he agreed to match it with an additional million-dollar gift of his own, doubling what he had committed to previously. The lead donor ultimately surpassed his stated gift limit by 75 percent. A brand new Y will open in 2019.
Case II: Asking for more – during the feasibility study.
An independent school faced a deadline for purchasing land to build a new K-12 campus – the culmination of a multiple year search process. In the course of the feasibility study, it became evident that I could not in good conscience recommend proceeding with the land purchase without larger gifts from the top five to eight campaign prospects. In the midst of the study, I returned as counsel to four study participants and asked them to consider significantly increasing their gifts. Their positive responses made the new campus possible. One family’s gift was 15,000 percent larger than the size of their annual gift.
Case III: Landing the largest gift ever to a North American Y
In the mid 1980’s, a Y campaign chair was shaving one morning when it occurred to him that if the campaign were to succeed, he would have to make the lead gift. He was serving on the high-profile association board after years on a branch board, following his early Indian Guide involvement. Over the course of those years, not only did his commercial real estate development business soar, his engagement in the Y increased exponentially. At the time, he made the largest multi-million dollar gift to a Y – something like a $10M gift in today’s dollars.
In each of these stories, donors exceeded their own giving expectations. What do they have in common?
- Not only were they engaged and involved in the organization, they were totally committed to the projects’ success.
- Each donor had been highly engaged in governing the organization and/or substantially investing in programs annually.
- Each understood the organization’s strong suits, financial needs and liabilities because they were leading and serving on committees.
Major donors are not so different from the rest of us. How many of us have cheerfully invested more than we expected in something we valued highly – a new home, our children’s education, a family vacation? The same dynamic applies to charitable giving when a donor is fully committed.
Affluent people who are totally committed to your project might surprise you – and themselves – with the size of their campaign gift. A $10,000 annual donor might give up to $3 million in your campaign -- if you can recognize and act on their real capacity.
How can you recognize the donor capacity that can lead to surprisingly large gifts?
Prospect research gives some indication of an individual’s capacity, but rarely uncovers pivotal nuances and variables. Privately held businesses are even harder to evaluate. For example, in one of the Cases in Part I of this blog, timing helped drive gift size: the family business was about to be sold, unbeknownst to the Y.
Complicating research are major donors who make sizeable contributions anonymously. Such is what happened in the first case in Part I of this blog - $3M dollars were gifted to the Y from a couple of donors who chose not to attribute their names to the contributions. They want their wealth and generosity to remain private.
Ys that Master Major Gifts
Ys that run excellent annual major gifts programs likely have a much better ideas of capacity because they are communicating with their donors. Stewardship and steadily increasing annual gifts provide excellent indicators of donors’ capacity.
Tips on Determining Capacity
There are many resources and experts in the field with formulas or ‘rules of thumb’ for estimating charitable capacity. Here are a few:
- A prospective donor’s net worth is a better indicator of giving capacity than the prospect’s current giving level – especially if the annual gift is not solicited strategically at stretch gift levels.
- As a rule of thumb, capacity as a percentage of estimated net worth is: Estimated net worth x 2- 5%.
- A person with a net worth of $25,000,000 or more can afford to donate $1,000,000 without changing his or her lifestyle.
- People with a net worth over $30,000,000 can give 5 to 10 percent of their net worth - or even more – with no diminution in their lifestyle.
- In a capital campaign with a three to five-year pledge period, most donors have the capacity to donate at least 15-25 times their annual support.
- Political donations are escalating and easily researchable in the Federal Election Commission database. Assume capital capacity at 20 times a political contribution; a $5,000 political gift might easily mean they can commit $100,000 to your project.
Bottom line: a Y’s volunteer leadership culture naturally elevates the engagement level of those involved, and can lead to surprisingly large gifts. However, even with that advantage, maximizing the gift means accurately gauging the capacity of donors who tend to be private in their giving. The key to gauging capacity? Steady cultivation, stewardship and solicitation every year.
It is remarkable how even the most astonishing of gifts come back to the basics.
What tips can you take from this article with respect to your major donor activity and solicitations?
Kathy Kraas, CFRE is President of K2 Consulting Group with offices in Chicago and Los Angeles. She is also a 13-year Y senior executive with the YMCAs of Metropolitan Los Angeles and Chicago in the areas of Development and Marketing with successes that earned her NAYDO’s Eagle Award in 1997. Y’s around the United States have engaged K2 for capital campaign counsel.
K2 specializes in helping non-profits see beyond their perceived boundaries and realize robust revenue growth, whether for capital, endowment or annual support. As a creative strategist with a can-do approach, Kathy and K2 Consulting have produced exceptional results for Y’s, schools, health and human service organizations, foundations and associations. K2 Consulting Group has a lot of experience with the topic of Major Gifts - “When We Raise Questions, Our Clients Raise Millions!” www.reachk2.com
A Message from the NAYDO CHAIR
Andy Pierce, CFRE
Vice President, Marketing & Development
YMCA of Greater Louisville
GREAT CONFERENCE AHEAD!
The 37th Annual NAYDO Conference on YMCA Philanthropy is just a couple months away. The co-hosts, YMCA of New Orleans and the Dryades YMCA, have been working for over two years to make sure that their NAYDO Conference is the place to be in April 2018. Based on over 1600 registrations to date, they are well on their way to making it a great success.
If you are one of those registered, you can do something to make your Conference experience even more rewarding – Volunteer!
My first involvement with NAYDO, other than attending the Conference, was working at Conference Registration desk. I’d only been with the Y a little over a year. It was very good for me. I was able to meet YMCA staff and volunteers from all over. I started to build my own network of Y professionals. I did it again the next year, and then the next. I guess I finally got it right because I was asked to help with some other Conference activities!
We always have lots of volunteer opportunities at the NAYDO Conference, but this year we have even more. As you may recall from my last message, this year is New Orleans’ 300th birthday and our host Ys are smaller associations than recent hosts. In honor of that birthday, our goal is to engage 300 volunteers to help make sure our nearly 2000 participants, guests and exhibitors, have a great NAYDO experience.
We currently have numerous volunteer opportunities, including Conference Onsite Registration, Educational Workshop hosts and conveners, and greeters/directional guides to serve throughout the Conference.
Each Conference volunteer gets a chance to win two 2018 New Orleans Jazz Fest tickets. Jazz Fest begins on April 27th, just as the Conference concludes.
If you are interested in volunteering, or have questions about the opportunities available, please contact Mary Zoller at email@example.com.
Finally, it’s not too late to register for the 2018 NAYDO Conference but we are almost sold out so don’t delay. If you haven’t made up your mind, go to naydo.org and check out the Conference information.
I look forward to seeing many of you in NOLA!
Going to Y-USA Membership and Program EXPO?
Be sure to visit the NAYDO booth #718 in the exhibit hall and encourage anyone you know who is not already a NAYDO member to join. NAYDO Membership and Education Director Pam Hearn, CFRE and NAYDO Operations and Conference Director Mary Zoller will be onsite.
Measure Fundraising Success
Beginning mid-February, Y-USA will collect anonymized fundraising data from Y associations to utilize the Fundraising Fitness Test (FFT) for measuring their philanthropic efforts. This tool uses gift data to generate a whole host of fundraising analytics (including donor retention, average gift size, and upgrading percentages) that help Ys understand better how to improve their fundraising effectiveness. Learn more about how to participate.
*For our Canadian members, while we are not able to process Fundraising Fitness Test data through the Y-USA platform (it requires assigned YUSA ID numbers), you can still get your data by going directly to afpfep.org. Once you have the reports, we are happy to provide coaching. Contact Pam Hearn if you are interested.
NAYDO members save 20% off CFRE certification and recertification
If this is the year you promised yourself you would become a Certified Fund Raising Executive (CFRE), there’s good news. Current members of NAYDO save 20% off certification fees. If you’re a CFRE planning to recertify this year and a NAYDO member, you will enjoy 20% off recertification.
Stay in-step with the latest best practices and gain momentum in your fundraising career. Become a CFRE! Learn more.