Jul/Aug 2006

Major Gifts and the Internet — An Untapped Opportunity?

by Vinay Bhagat, Founder and Chief Strategy Officer, Convio

Although many organizations have successfully used the Internet for direct response and special events fundraising, few have tapped its potential for major giving. The question nonprofit professionals should ask is not whether donors will give a major gift online, but whether online marketing and constituent relationship management (eCRM) can support major donor identification and cultivation.

Historically, major gift efforts have primarily sourced donors through two avenues: 1) referrals from other key donors and board members; and 2) direct mail programs. In the referral model, development officers target high net worth individuals and find ways to speak to them via existing relationships. In the direct mail model, donors who give large gifts — by direct mail standards — or who fit certain predictive model factors, such as giving tenure and frequency, are commonly screened and targeted for a major gift.

For example, in a recent article in FundRaising Success ADVISOR, "A Wealth of Opportunity," a representative from the Heritage Foundation was quoted as saying that direct mail was its "largest source of future major donors," specifically that "60 percent of $10,000+ donors started out as regular direct-mail donors." When a mail donor gives a single gift of $1,000 or more to the Heritage Foundation, the organization contacts the individual to begin building a stronger relationship and evaluating his or her potential for making a larger gift.

Just as with postal mail, a well-executed online marketing program can be a "feeder channel" for major gift efforts. Online marketing allows an organization to cast a wide net to entice potential supporters to learn more and become engaged. Online marketing also represents a very low cost donor education and cultivation channel that can supplement traditional in-person major donor cultivation activities. Similar to postal mail, when an online constituent demonstrates support by making a meaningful gift online, it is an indicator that he or she is worth cultivating for a major gift.

Consider the experience of The American Red Cross Mile High Chapter in Denver, Colorado. In response to Hurricane Katrina appeals in September and October 2005, this Convio client raised $1.5 million online. Two hundred and twelve new contributors gave online gifts of $1,000 or more. The organization segmented this constituency and sent a series of cultivation emails to keep them apprised of how their contributions were being spent. They also sent emails and hand written invitations encouraging these donors to participate in events. Six of these major donor "prospects" decided to participate in events; four actually attended personal tours of the chapter. In this case, online fundraising and eCRM sourced more than 200 strong prospects for major gifts and strengthened the cultivation process by enabling the organization to identify six previously unknown near-term prospects for major gifts.

Beyond sourcing potential major donor targets, eCRM also is an effective method for supporting cultivation of relationships with existing constituents. Many major gift-centric fundraising organizations arrange regular fundraising events such as galas attended by hundreds of people. Often, attendees fit the profile of good major gift prospects, but it is rare for an organization to systematically follow up with all of them. Major gift officers generally only have the capacity to develop about 50 relationships at a time, so naturally they focus on the most easily identifiable targets.

An organization with hundreds of potential major gift prospects can use an eCRM approach to cultivate people en masse and "bubble up" the best targets for attention by major gift officers. Through a combination of personalized email marketing and Web site communications, a nonprofit can engage prospects, learn about their interests and use that information to entice them to learn more about and get involved with the organization. A nonprofit also can use this approach to steward relationships with existing donors — to sustain contact with them on a regular basis after a large contribution has been made so that their interest remains strong and grows. Through eCRM, it is possible to track a constituent's activities and interests — which emails he or she opens, articles read, fundraising appeals prompting responses and survey answers. This information is valuable because an organization can use it to personalize online communications as well as provide talking points for major gift officers as they make personal contact.

In summary, while online marketing and CRM will never replace the need for person-to-person contact, it can augment and support an organization's efforts to help source new major gift prospects and cultivate constituents in a scalable fashion. Nonprofits that rely on or want to develop strong major giving programs would be wise to make eCRM an important part of their overall marketing mix.

This article first appeared in the June 2006 issue of FundRaising Success magazine, http://www.fundraisingsuccessmag.com/.