It’s Time to Leverage Leadership Annual Giving as a Pipeline to Major Gifts

Most major gifts don’t just happen. They stem from years of gift officers engaging with, and cultivating, a major gift prospect.

That typically stems from donors giving multiple small gifts over time during which they receive creative, thoughtful stewardship that deepens their relationship with the institution. We’ve found that that relationship-building process works best within a well-functioning leadership annual giving program that bridges the gap between annual giving and major giving.

Leadership annual giving plays an essential role within the donor pipeline because GG+A donor surveys have also found that donors are very unlikely to consider making a major gift to a nonprofit organization unless it ranks in the top two of their philanthropic giving priorities. By providing institutions with a middle ground between mass annual giving solicitations and personalized attention from a major gift officer, leadership annual giving enables a donor to get to know the institution they support while allowing the institution to get to know a donor as an individual with unique interests.

When done well, leadership annual giving programs can accelerate a donor’s movement through the donor pipeline given that leadership annual giving officers typically see two to four times as many donors as a major gift officer. As gift officers do so, they can easily qualify (or disqualify) donors for major gifts during their one-on-one conversations while increasing the donor’s annual support. Those funds have provided critical revenue that—throughout the COVID-19 pandemic—has helped institutions weather a host of challenges.

The personal touch

Donors expect the institutions they support to tailor their communications and outreach to them and their interests. That requires a gift officer to learn what they are passionate about to enable them to provide effective stewardship that offers regular updates about the programs or initiatives that donors care about and support.

We know from experience that providing personalized attention can lead donors on individualized philanthropic journeys. For example, a gift officer with a portfolio made up of midrange donors might draft a monthly update email centered around a theme such as “pediatric cancer” to inform leadership annual giving donors about what is going on at her hospital.

The email would highlight specific programs, other priority areas for the hospital, and discuss opportunities for enhanced engagement. Then, when the gift officer sends it to her prospect list, she includes an invitation in the footer for a more formal conversation about any areas of interest the donors may be excited to explore.

That simple approach enabled prospects to self-identify and let the gift officer learn with whom she should spend more time. Among those who don’t self-identify, she could track who clicked on which items in the email and follow up as needed. For example, if she notices that a donor who rarely clicks on content clicked one of the links in her email, she can follow up to provide that donor more information on that particular area. That process can either be done manually—by putting in a little legwork to look at the email data—or automatically. Either way, it’s a vital step in the process.

The newsletter can then serve as a touch point that can spur conversations. It also has the benefit of putting a face and name with the institution to help develop the relationship. Those efforts matter. For example, we previously tested the response rates for appeals with a cover letter signed by the relationship manager against a cover letter signed by the director of annual giving. There was no contest; the relationship manager letter got a significantly higher response rate because they know that person.

Incorporating lessons learned from the pandemic

By necessity, leadership annual giving teams abruptly pivoted to a remote environment. They proved their ability to be productive with Zoom and other digital technologies with relative ease and speed. Remote meetings were beneficial for institutions by enabling gift officers to engage with more donors without the need to spend time and money traveling. These virtual meetings were also a welcome innovation for many donors who appreciated engaging in a less time-consuming way.

While we don’t think we will eliminate the in-person experience entirely, the pandemic has taught us that we no longer need to rely upon in-person meetings the way we once did.

The pandemic also drove many institutions to experiment with virtual engagement strategies. They enabled major donors to spend time—remotely—with the institutional leader who is doing the work they’re supporting. While those people have limited time and can’t always make time for a $2,500 donor, we’ve learned from the pandemic that virtual invitation-only events can be incredibly successful and are significantly easier to organize than in-person events. Moreover, donors enjoy the opportunity to attend an insider event in which they can talk to the person who inspired them to give.

These types of events that provide greater access help donors move along the pipeline and, because gift officers only have a few hundred donors, the event serves as an excellent stewardship opportunity. For example, a gift officer can personalize a message thanking someone for their gift while inviting them to the next virtual event. That message often resonates because it is coming from someone they know.

Is your leadership annual giving program working?

Given the widespread benefits of a well-run leadership annual giving program, it’s crucial to optimize it. That requires you to leverage data to analyze your program’s performance. There are several ways to do so.

For example, you can assess your retention objectives by looking at the percentage of leadership annual giving donors who repeat their gifts. Another way is to look at the ratio of donors who upgrade their yearly gifts. While you may want to look at industrywide benchmarks to get a sense of how your program compares to peer institutions, it is more important to look at your program’s trend lines over time to determine the effectiveness of your efforts.

Another metric to consider is the number of gifts (or years) it takes before a donor moves from one category of giving to another. For example, how long does it take for a donor to make her first $1,000 or $5,000 gift? Again, you can drive your leadership annual giving team to help shorten that time and increase revenue and retention at the same time.

We know many institutions that examine how many gifts their leadership annual giving donors making per year. That enables them to determine whether they can develop a strategy to increase their gift count from one to two to three gifts a year. After all, if you create an approach that works, you can increase both retention and revenue. One way to bolster those metrics is via a recurring gift program, which can effectively lead younger or recent graduates into your leadership annual giving program. While a $1,000 gift might be a tall order as a one-time gift, it seems far more accessible when spread across a year.

You may also look at the number of major gift prospects who have been identified and qualified by leadership annual giving officers. That metric enables you to quickly assess whether donor conversations are focused and meaningful, in addition to how donors are moving through the pipeline.

At the same time, it’s important to evaluate your program’s operations by posing a number of important questions, such as:

Is there a coordinated effort across the institution to ensure that there aren’t turf battles with major gifts?
Are you using the program to help your institution grow and retain talent by providing a career path for promising early-career fundraisers or others who want to enter fundraising?

A leadership annual giving position provides the opportunity to gain valuable experience in prospect qualification, personal gift solicitation, articulating a case, and developing and implementing a strategy. In addition, it provides the opportunity for professional growth and for early-career professionals to determine if a career in fundraising is appealing. Staff members who have a career path and opportunities to acquire new skills are far more likely to stay with the organization.

Leadership annual giving is a critical building block within high-performing institutions. Not only does it help develop the next generation of major gift officers, but it also helps foster the next generation of major gift donors.

If you are interested in learning more and applying these strategies at your institution, please contact us.