Principal gifts are more than just bigger major gifts. They are strategic philanthropy supporting solutions for societal problems. These gifts come from donors who believe in your institution, see it as a formidable partner for change, and believe your work is worth a heightened level of investment.
What Makes Principal Gifts Unique?
Principal gifts are inspired by big ideas – rarely the other way around. These gifts surface from futuristic thinking about what could be. And they embody values that are consistent between the donor and the organization, who have worked together to conceptualize the opportunity.
Although these characteristics can apply to various types of nonprofit organizations, let’s look more closely at how principal gifts function in the world of higher education. A recent survey of R2 university advancement leaders conducted by GG+A found that 57% of respondents cited “attracting principal gifts” as one of their primary challenges, and yet these gifts are critically important for sustainability, longevity, and success. In fact, 60% to 65% of contemporary campaign totals stem from gifts of $1 million or more.
University Advancement can lead the creation of a process and criteria to generate, vet, and green-light these big ideas. The process should model inclusivity, transparency, and – because almost all big ideas are interdisciplinary – encourage collaboration across academic departments and among other internal stakeholders.
The process and criteria should seek to illuminate the answers to these questions, among others:
- What societal problem does this idea solve?
- Why is our institution uniquely qualified to solve this problem?
- Who will be served by this initiative?
- Why now?
A stellar example of a societal challenge that a principal gift helped to address is the new Ballmer Institute for Children’s Behavioral Health at the University of Oregon (a GG+A client and my alma mater). UO alumna and previous trustee Connie Ballmer and her husband, Steve, a former Microsoft CEO, envisioned a bold new approach to meet the behavior health and wellness challenges that children and youth face today. This inspired them to give a transformational gift.
The Ballmer Institute uniquely addresses the behavioral health workforce shortage by uniting UO’s highly regarded research programs in psychology and education with Oregon public schools, families, and community support groups to create an entirely new degree program and profession – the Child Behavioral Health Specialist. The program will create and deliver intervention and treatment programs for children and adolescents with an emphasis on early detection and prevention of mental health disorders.
Who Needs to Be Involved in Your Principal Gifts Program?
A dedicated principal gifts program ensures systematic, consistent, and strategic attention to cultivating and soliciting principal gift prospects (regardless of their presumed philanthropic interests) and includes customized components that are created in consultation with each donor. It should elevate the donor engagement process stages of identification, qualification, cultivation, solicitation, and stewardship.
At the principal gift level, prospective donors are highly involved with the university, making it very likely that they have multiple interests across the institution. It is a team effort to provide guidance and support to donor engagement and solicitation activities institution-wide, while preserving and nurturing existing relationships at individual and program levels.
The administrative team of a principal gifts program might include the following, depending on the scope of your program:
- A program director, who plays strategic and tactical roles. This person may serve as the primary project manager for principal gift strategy development, implementation, and coordination of deliverables across the university.
- A program assistant director/coordinator, who provides tactical assistance by tracking strategy progress in the donor information system, developing and distributing regular progress reports, and coordinating production and distribution of materials.
- Dedicated prospect research and donor relations officers, who might spend 50% to 100% of their time researching and coordinating the stewardship of principal gift donors.
- The chief advancement and chief development officers of the university, who oversee strategy development, and who personally implement strategies with prospective principal gift donors.
The strategic participation of academic partners and other key stakeholders is crucial for several reasons: to nurture donor relationships, collaborate on the development and implementation of a focused and intentional principal gift strategy, and to ensure excellent stewardship of the gift.
What Can You Do to Get Started?
If you are just starting out, determine the appropriate gift level that defines a principal gift at your institution by analyzing the giving capacity, inclination, and history of the top tier of your donor base. Then tackle these next steps:
- Set up your infrastructure. Determine reporting needs, tracking procedures, and other processes necessary to ensure strategy progress and outcomes.
- Prioritize your top principal gift prospects. Prepare research profiles for each prospect and make an initial determination of the right key stakeholders relationship builders for each.
- Focus on strategy development and implementation. Create informed plans for your top prospects that deepen their engagement with the organization and include them as true partners in building solutions for societal challenges.
So, You Have a Program. . . Now What?
A regular forum to discuss principal gift strategies and monitor progress is crucial. Collective input generates more creative, relevant, informed, and donor-centric strategies than any single person could. Prospect strategy meetings provide:
- Opportunities to bring together all of the organizational partners and key stakeholders who have an interest in particular principal gift prospects or big ideas.
- A platform for collaboration, coordination, and information sharing.
- Touchpoints to ensure focus and progress.
- Mechanisms to bring a broad spectrum of organizational resources to bear in creating true partnerships with these exceptional donors and potential donors.
Ideally, the growth and evolution of development programs will lead to prospective donors who are willing and able to partner with your university to affect transformational change. Once in a while, those partnerships will develop organically. More often, however, they emerge from intentional focus and collaboration under the umbrella of a principal gifts program.
If you are interested in learning more and applying these strategies at your institution, please contact us.