We are often asked by charities to help them forecast their major donor income, particularly for more newly established programmes. This is no easy task; factors to consider include:
- how many researched prospects there are
- what you are currently raising money for
- the urgency of the need
- how warm the major donor prospects are
- how much the donors have given to date
- who is involved at senior level
- who is asking for the gifts
- whether there are lead donors
- whether there is an established volunteer development board
All of these factors should be considered when considering 1-3 year major donor budgets. Even then it can be hard to put figures against prospects.
To help, we conducted some research into levels of major giving across a cross-section of charities. We looked at 50 donors giving gifts of between £1,000 and £100,000 so that average giving levels weren’t skewed by a few very large donors.
The breakdown of giving for the pool of 50 donors we reviewed was as follows:
- Total giving £911,500 (over 2 year period)
- Average giving £20,250 for men and £16,000 for women
- Total contribution from £1,000-10,000 donors £79,500 (9%)
- Total contribution from £10,000-50,000 donors £212,00 (23%)
- Total contribution from £50,000-100,000 donors £620,00 (68%)
What we learnt from this exercise was that a pool of 50 £1k-100k donors will donate around £450k per year. We also learnt that the Pareto principle (80% of your income from your top 20% of supporters) applies within a group of major donors – the top 9 out of 50 donors contributed an incredible 68% of the total.
We estimate that you need four active, meaningful conversations with major donor prospects to secure one donation. We would also say that you need around four prospects to have one meaningful conversation, so a 16:4:1 ratio. To use this as a guide take your number of prospects, divide by 16 and see how many you have compared to the 50 we reviewed.
For example, if you have 160 prospects, you can expect to have 40 meaningful conversations, leading to 10 gifts. Assuming you don’t have any significant £100k+ gifts, you have 20% of the donor group we reviewed. Our group contributed approximately £450k per year, so your group should give in the region of £90,000.
To calculate a return on investment you can estimate the time and cultivation cost of having 40 meaningful conversations. You could say that this would require half a full-time person earning £40k per year, so £20k, plus add on costs of around 10%; £22k in total. Add on £8k of event costs and the time of colleagues and your total cost is £30k. With £90k income your ROI is 3:1, which is about right for a developing major donor programme. Over time this should increase to 5 or 6:1.
Forecasting any fundraising income is not an exact science, but major donor fundraising can be particularly difficult, especially with a small pool of donors, so hopefully our research will help as a guide. Please contact us for any further advice. We would love to help you raise more from your major donors.