Denomination Rules: How much should we ask for?

Posted by on Jan 24, 2017 in Communication, Donor Cultivation, Featured, Plans and Budgets, Staff Development, Uncategorized | 2 comments

Denomination Rules: How much should we ask for?

I get asked fairly often how I determine what to ask for from a major gift prospect. My flip answer is always: “Depends on how much you need.”

It actually depends on a great deal more factors that that, but I get tired of stopping at “It depends…

So, here’s a few general rules of thumb, I’ve used in my work and career:

  • I’ll ask anybody for $1,000. Many people spend that on designer coffee and internet service every year. Got a smart phone? – you’re capable of entertaining a $1,000 price tag.
  • Therefore, by extension, I’ll ask anyone for a five-year pledge totaling $5,000 – assuming it’s a major gift for a program or project they have fallen in love with.
  • For major gifts, I don’t like asking any one person to cover more than about 25-40 percent of the total I need. That’s why I like presenting the “conservation costs” – the purchase price of the land PLUS the due diligence and closing costs PLUS the stewardship endowment – all at the same time. It makes the total larger, and makes 25% of the total larger as well.
  • I also don’t like asking any one person for more than 20 times their largest gift. A prospect might be worth billions, but if their largest gift to US is $5,000, I’ll think twice about asking for more than $100,000 for the campaign.
  • For annual gifts (aka “upgrades”), I don’t generally like asking someone to jump their gift more than about 4 times in one step. So, from $1,000 to $2,500 is OK, and $2,500 to $10,000 is fine, but $2,000 to $10,000 feels like too much – to me.
  • Note that asking for an increase from $100, to $1,000 is fine with me, because I’ll ask anybody for $1,000.

Last August, I posted about making individualized cultivation plans for your top donors (See Cultivating Top 100 Donors). Here’s an excerpt from what I wrote then:

 

You will want to imagine the relationship from the donor’s perspective. What will they see from the organization? Will it come from a single “voice” (better)? Or will each communication be from someone different (not as good)?

  • Start with their membership renewal request. Is it delivered in person? By mail? Email? Will you send a follow-up or call the donor if they do not respond? After what interval of time?
  • Now consider the printed and emailed newsletters. Are they sent “from” the organization? Are they packaged separately to arrive “from” the Executive Director or one of the board members?

Donor by donor, each by each, consider and draft an interaction plan for each prospect. It’s tedious and time-consuming, and the more donors you begin to seriously cultivate, the more tedious the process becomes. I suggest taking two weeks out of each January and slogging through it, but you might operate on a different timeline.

 

In each case, you’ll want to have the ask amounts in mind: What denomination of major gift could we be looking for in the next three years? What annual gift should we be asking for this year? And, how can we use that annual gift experience to cultivate interest in a major gift?

I’ve been working with a client on putting this exact program in place (Notice what month it is!). And we developed a series of questions to help us plan. If you’re interested, you can find them here, Questions for Donor Cultivation Planning.

So – share your own experience here. What rules (written or unwritten) do you use intuitively to help you determine what to ask for?

 

Cheers,

-da

 

Photo by Richard Hoeg courtesy of Unsplash.com.

2 Comments

  1. Great post. Regarding percentages, do you have a rule of thumb when it comes to naming opportunities? For example, we are raising $161,000 to purchase a piece of property. There could be a naming opportunity, so how should we structure that? If a single donor gives 50-75% they have the naming opportunity?

    • Heidi,

      Thank you for the question.

      I’d love to hear what others say, too, because I don’t have strong feelings on the matter. It feels intuitive that naming rights could be conveyed to someone who pays at least 50% of the conservation costs (not necessarily just the purchase price) of the property. This makes sense also because it is consistent with the way we currently treat gifted property.

      You might also want to carefully consider and adopt a more comprehensive policy (instead of taking it case-by-case) that includes a minimum, a requirement for board approval, and consideration for impermanent naming (99 years, for example).

      What do others think?

      -da