The Next-Gen Major Gifts Fundraising Metrics Your Nonprofit Should Be Measuring

Greg Warner

April 13, 2022

If you looked up suggestions for which major gifts metrics and KPIs your organization should be measuring, most of what you’d find would seem fairly reasonable.

The typical metrics measure activities, such as number of calls, number of visits, number of solicitations, number of gifts, and so on.

But there’s a problem with most of those metrics. They focus on the organization and what it (or its staff) are doing. That satisfies the needs of an organization’s leaders and board members because they want to make sure their staff are doing their jobs and their resources are being put to use.

But since they only measure quantity of activity they aren’t very useful or telling because they fail to reflect what’s really happening—according to the donors or prospective donors. So they might make leaders, board members, and manager feel good knowing their staff are working very hard. But they don’t reveal what needs to be known in order to manage and optimize fundraising operational effectiveness. Here’s what does:

1. The quality of the relationships staff are developing with major gift donors and prospects.
2. Whether the donors and prospects are advancing through their gift consideration continuum.
3. How quickly they are moving themselves forward toward a gift decision.
4. When the gift is likely to ‘close’ according to the donor, not some hopeful prediction made by an optimistic fundraiser/gift officer or department manager.
5. How likely it is that the gift will ‘close’ (again, according to the donor).

Can any metrics really do that, though?

Yes! And it’s time to meet the new major gifts fundraising metrics, made possible through technology and automation.

Why?

Because the point of metrics is to amass data that indicates how well your current strategies are working, so you can adjust them to work better. If your metrics (especially major gift officer activity and revenue metrics) don’t directly measure what is happening with each donor, then they aren’t very useful.

That’s mostly because they look backwards to measure past activity, which is like driving while looking in the rearview mirror all the time. And they focus on what you or your staff are doing, rather than zeroing-in on where your donors and prospects are in their own decision-making processes.

Ultimately, you can’t get to where you want to go if you’re always looking backwards and focusing on yourself! This is what it means to be organizationally-driven and oriented around transactions, when you really need to be donor-driven and focused on relationships.

The teams that successfully raise more major gifts of assets (including legacy gifts) efficiently make the pivot internally and externally from transactional operating structures to relational designs.

In order to raise major gifts of assets, nonprofits need to pivot from being organizationally driven to become donor-driven

The Science Behind What Makes Major Gifts Fundraising Metrics Different?
In Dr. Russell James’ Fundraising Myth & Science series of books, he reminds us, “Small-gift metrics simply do not apply to large-gift operations.” He goes on to emphasize the fact that small gifts don’t matter that much in a world where almost 80% of donor dollars come from just 3% of the donors, and most charitable bequest dollars (96.2%) come from 0.1% of deceased people (that’s just 1 out of 1,000!).

Our data mirrors his research findings. MarketSmart developed the Fundraising Report Card to help organizations understand their metrics and compare them with similar operations. The application has consistently reported that less than one percent (.77% to be exact) of donors contribute almost 70% of the dollars to nonprofits on average.

That’s because most major gifts and planned giving fundraising efforts are done relationally, not transactionally. The deeper the relationship, the more value the donors gain. And, the more value they gain (remember, value is in the eye of the beholder and trust is a component of value), the more they give.

Relationships involve one-to-one interactions (not merely transactions) by phone, in person, via Zoom, and even with mailed letters, text messaging, and email. Email can also be automated, which enables you to scale up your major gifts fundraising without having to hire more people.

The point is, major gifts fundraising is about delivering value and building trust helps support value delivery. After all, if you don’t have trust, you can’t grow a relationship. And yes, you can automate value delivery to develop trust. That way you can deliver value at scale, especially among unassigned but identified major gift prospects you don’t have the bandwidth to engage one-to-one or who are not ready (according to them) for your outreach.

In other words, you need contemporary metrics that truly help you determine what level of trust you have established with each donor and what level of value they are enjoying. With those metrics you can then determine whether trust and value are growing, receding or staying constant.

You need modernized metrics that answer these kinds of questions for each individual donor and prospect so you can develop strategies to remove friction from their consideration process. Doing so builds trust and enhances the value they perceive they can gain from sharing what they have.

What Are Some Commonly Used Major Gifts Metrics?
The idea of using trust-measuring, advancement-oriented, relational, and donor-driven metrics contrasts with much of what you’ll hear elsewhere about metrics, even from reputable yet traditional experts. A popular CRM company (that doesn’t actually do any major gift fundraising at all), for instance, says the most important major gifts metric is “asks made.”

This is based on the fact that this item (an organization-focused activity metric) appeared on everyone’s list of metrics at a conference during a random exercise. Not very scientific!

And besides, no major donors attended the event, so their opinions weren’t included. Trust me, they are not fond of fundraisers who ask, ask, ask.

An old myth states that the number one reason why people don’t give is because they weren’t asked. Meanwhile, the truth of the matter is that the reason people don’t give is because they weren’t asked at the right time, by the right person, for the right amount, in a way that helps the donor see how they can be the hero in their own life story (so they gain value).

Unfortunately, this CRM firm’s misguided advice is in line with the common notion that asking (soliciting) is the most important part of fundraising. The more asks you make, the more money you’ll raise, goes the conventional wisdom.

We at MarketSmart respectfully submit that this is incorrect. And we have a lot of data to support that position, collected over many years from our major gifts fundraising software.

Amy Eisenstein, a well-known fundraising consultant, recommends four key major gifts metrics: retention, dollars requested and received, meaningful visits (a very subjective measure), and stewardship efforts.

That’s a better list than the usual activity metrics. But even her metrics still don’t reveal much about the level of trust between you and each individual donor. They’re still very broad, looking down from the 10,000-foot level, mostly backwards in service to the organization and its leaders—not the donors.

Why does this matter so much?

Because if you can measure value (especially trust), then you will know when to ask and how to ask. That may mean you end up making fewer asks but raising more money because you asked at the right time and in the most personalized way. With that approach, in fact, you may not have to ask at all in many cases.

Most of us have heard about or met a donor who was determined to give a large amount, as soon as possible, without an ask. They do this once they have decided (on their own, in many cases) that the value of the exchange is worth it to them. Once they come to that conclusion, not much can stop them from giving without even being asked, unless someone somehow gets in their way.

Donor-advised funds and family foundations make that impossible, and that’s partly why wealthy donors like them so much. The allow for completely donor-driven decision-making that is convenient and easy.

Similarly, your role is to remove friction from the process and help your major donors find meaning in their lives. It’s to help them enhance their identity so they feel like the hero in their own life story. You can do that better than any DAF or Family Foundation because you can help donors explore their ‘why’ (why they care), what programs they can support, and how to give wisely.

When you deliver that kind of added value that far exceeds what a DAF or Family Foundation can provide, you raise much more money.

Major Gifts Fundraising Metrics that Measure Value and Trust
So how do you measure perceived value and trust while forecasting future major giving instead of looking backwards? Here are a few ways beginning with information you can collect with a survey. Just remember that you should never survey your supporters without a cultivation plan in place. If you fail to show them that you heard what they conveyed, they’ll become much more likely to churn and give to another organization that proves it cares about their input and feedback:

Level of commitment to your organization’s mission

How committed is each major gifts prospect to your nonprofit’s mission? Are they invested for the long term? Do they care about future generations, not just next week? Do they see your organization’s survival as being of utmost importance to them? Major gifts fundraising is about providing for future generations. It isn’t disaster fundraising.

Rank of your organization compared to others they support

Yes, it’s a harsh truth we must all accept: donors almost always give to more than one nonprofit, and yours might not be their favorite. (Gasp!). This matters, because while a donor might give to five different organizations, they might be most inclined to give a major gift to only one or two of those. You need to know that information and you need to know if they are moving yours up in their rankings or down. Either one forecasts more giving or less.

Position within the ‘consideration continuum’

The farther along a prospect is in considering making a major gift, the easier it will be to secure a gift when you ask them. This goes completely against that CRM firm’s assertion that ‘asks made’ are what matter most. Asking at the right time matters much more. If you can measure how far along a prospect is, you will know when to make outreach (asking for a meeting) with a far higher probability of success. Your supporters will tell you if and when they welcome your overtures.

And if you feel compelled to ignore our advice and ask, ask ask, just remember that more asks for money won’t generate more dollars. But more asks conducted at the right time and done the right way will. The most successful fundraisers know that asks should only occur once trust has been established, and the donor can visualize the value they will gain in exchange for their hard-earned money. Give them an opportunity to let you know when the time is or will be right, and they will share that information willingly. Plus, they’ll thank you for asking about asking instead of asking for their money.

Integrating the role of an important figure in their life in their passion for your cause

This metric speaks to why someone cares about your mission. If you ask a supporter about that, they’ll usually tell you a story that involves either their life history, their values, or their people and community (or all of the above). An especially powerful connector to your cause is another person. That could be a professor who changed their career trajectory or a nurse who saved their mother’s life.

If you understand more personally and intimately why they care, you’ll be better prepared to make a personalized ask that connects deeply to their original identity and helps them gain value through enhanced identity (which is what they get for their money). For example, who inspired them to go down the philanthropic path they’re on with you? How much does that matter to them?

At MarketSmart, we have found that people who have an important figure in their life that spurred their passion for your cause are much more likely to meet sooner, engage more deeply, and give bigger assets.

Degree of connection between your mission and their life story

A cancer patient who got cured at a hospital has a very strong connection between the mission of that hospital and their life. This matters for the same reason as the last metric. Why does each prospect care about your mission? The reasons vary. But knowing the reasons allows you to forge much greater trust and a stronger bond with each prospect before and when you make an ask. Again, these metrics forecast giving, making major gifts of assets much more likely. They help you prequalify supporters for outreach.

Engagement level

Do they volunteer? Refer others? Share your social posts? Engage in other ways online? Do they respond to mailings more than emails? You can measure all their ‘touches’ and create a metric to represent each prospect’s level of engagement. Higher engagement means stronger trust and more value gained.

Disengaged vs. Leaning in

Let’s be honest with ourselves.  Entirely disengaged people won’t respond favorably to your major gift solicitations. You know that instinctively, and that’s why determining who is not engaged versus who is can help to separate prospects quickly at a high level. A survey is an effective tool for deciphering this because people who fill out your survey prove they are definitely engaged right now.

Likelihood of making a major gift of assets (according to the donor)

This is a big one, and not just because it’s according to the donor. The real money in major gifts is not made in cash donations. It’s made in gifts of assets like stock options, property, and retirement accounts. If you know how likely a prospect is to make such a gift before you reach out to them, it’s a whole lot that your outreach will be successful.

Are you seeing how these metrics look forwards, not backwards?

Do you see how all of these metrics can help you and your staff pre-qualify people for outreach?

Pre-qualification is desperately needed because, too often, traditional approaches drive fundraisers on wild goose chases. Their prospect identification methods only help them determine who might be a good potential major donor prospect. But they tend to generate too many leads that mostly remain unassigned or are not truly ready for outreach and engagement. Then, when staff struggle to connect with prospects or discover they’re not yet primed for deeper involvement, frustration builds and turnover transpires.

Here’s the data you want to collect once you’ve prequalified prospects for outreach, made a connection, completed some initial discovery, and invited a supporter into a gift exploration process.

Plans in place to provide proposals to likely donors

Suppose, through outreach, connection, and discovery, 20 prospects have indicated they are open to making a major gift of assets because of their life story connections, their deep level of engagement, where they told you they reside in the consideration continuum, their level of commitment to your organization, how they rank your organization compared to others, and so on. Then, suppose you invite each of them to work with you on the development of a roadmap for their deeper exploration and understanding of how giving through your organization can help others while adding meaning (value) to those 20 prospects’ lives.

Once those roadmaps have been collaborated upon, revised, and accepted by each of those people, you can say that you have plans in place to develop proposals with them. That’s because they essentially developed their own cultivation experiences with you and set them into a timeline. So now you know when you will be likely to provide proposals and close the gifts (thanks to each prospect’s acceptance of their roadmap, which includes their final decision date).

Of course, things happen and some of those folks might delay the process or drop out of it altogether. So let’s assume for argument’s sake that eight of them are sure to close on time because you’ve been assured that the timing is right, they trust you, and you understand how they would perceive a worthwhile exchange of value.

Now you know who is truly likely to give and when. Plus you know you’ve got to get to work enhancing the value of the experience for the other twelve. See how metrics like this directly inform how you use your time? You’ll waste far less effort shooting in the dark and more time focusing on the people who are likely to share their assets and are ready for your counsel, guidance, support, and facilitation.

Of course, the more plans you have in place (accepted by the donors), the more likely it is that those plans will result in major giving. That’s why this metric is so important to measure. If you have zero plans in place that have been accepted by supporters, you’re pipeline is basically empty.

Lifetime value

Lastly, you want to start measuring your average lifetime donor value. This will quantify the value of how much trust you have developed in each relationship over their lifetime. What you’ll notice here is that the more work you can devote to sustaining and deepening trust, the more this metric will increase. If you want to see how you compare, check out the ‘live’ benchmarks I capture every day in my Fundraising Report Card.

More value delivery and increased trust equals more donations, including repeat donations and referrals. Measure trust using the metrics above and you will increase your donor lifetime value.

Treat donors transactionally because your organization has it’s needs and you’ll drive lifetime value downward. It’s that simple.

Wait, Wait, Wait – What About Money Raised?
Monthly and even annual revenue from major gifts isn’t as important as lifetime donor value. This isn’t to say you shouldn’t also measure those more popular metrics; just that they aren’t nearly as important.

Any major gifts fundraiser knows it takes months, and often years, to secure a major gift. And sometimes years more to retain that donation, if it’s a planned gift. So if it takes months to secure a gift, what’s the point of a monthly major gifts revenue metric?

You might have four months with no major gifts, and then in one month, six donors give huge gifts and you bring in $4 million. You can’t then look at that number and say, “Well gee, what did we do that month that we didn’t do those other four months?” That’s a silly question. Obviously, you were spending those other months working with the donors who eventually gave. They just happened to all give the same month.

The monthly metric means almost nothing.

The annual one may have a little more significance, but not much, and for the same reasons.

Lifetime value is what matters most, not one-time gifts.

Number of major gifts closed
What’s more important than money raised is the number of major gifts closed (quantity). Major gifts will be more likely to close if you develop highly personalized cultivation plans with your supporters. The more plans you develop and help to get accepted, the more major gifts you are likely to close.

David Lively leads the fundraising operations at Northwestern and is the author of Managing Major Gift Fundraisers—A Contrarian’s Guide. He says, “The most important metric any manager can measure is the number of major gifts a fundraiser raises in a given year.”

He continues by saying that, by measuring total dollars raised by a fundraiser you warp who’s truly doing the work properly. “Rainmakers who close the odd mega-gift will often be viewed as the best fundraisers, but this is not necessarily true,” he states.

And besides, the amount a donor will give is often too far beyond your control. Of course, if you increase the value you deliver, the gift size will increase. But only by so much. The total amount donors give is simply too far outside of an individual fundraiser’s jurisdiction.

However, the number of major gifts a person closes is something within your control when you and your staff build a pre-qualification system for outreach prioritization and invite supporters into the cultivation planning process. As you increase the size of your pre-qualification pipeline and warm-up people so they become outreach-ready, then you gain a constant stream of people who are more likely to accept invitations to collaborate on giving plans. As a result, more will go through the entire process with you, and ultimately close.

Pipeline growth drives major gift volume

Pipeline metrics help you assess whether you have enough potential major donors considering making major gifts of assets and moving themselves through their consideration continuum.

If your pipeline is small (because too few prospects have accepted cultivation plans), it will be easy to forecast poor future results. However, if it is big and growing, your future will likely be bright.

So measure how many relationships you have in which you and your supporter both expect a giving decision to be made in the next year or so. Then determine a gift amount you expect. You might want to be conservative with this figure. Next, assign a ‘deal stage’ (usually according to the donor) based on where they reside in the consideration continuum, and be sure to include a deal percentage. This is your assessment of the likelihood that the gift will close. Finally, plot out the calculation by multiplying the projected gift amount by the likelihood percentage, and be sure the figure lands in the month (or year) you and the donor have agreed it will reasonably happen.

Here’s an example of how this looks. In the private sector, we call this a risk-adjusted pipeline.

Velocity
As you grow your pipeline, you’ll want to keep an eye on whether your supporters are moving themselves forward through the consideration continuum. One way to measure that is by tracking ‘days to close.’ This is the number of days from the time the donor opted-in to be in your caseload (portfolio) to the day their gift was closed. However, you should also measure how long it takes for them to move themselves to each stage.

Monitoring velocity will not only help you understand the typical length of the process. It will also help you see where supporters are getting hung up. For instance, if they are not moving forward (or perhaps even moving backward) after meeting with only one particular gift officer, that might mean that fundraiser needs training (or should no longer meet with prospective donors).

Wrapping Up
Maybe all this sounds great to you. But that list of major gifts metrics given earlier isn’t normal. How do you measure how much a person is committed to your organization? How do you measure the influence of a key person in their life?

There is a way.

The way to measure most of the metrics listed earlier is with automated emails, online engagement tracking, and surveys.

When you send a survey to a donor and they fill it out, they’re already self-qualifying by helping you learn the kinds of information in those metrics. Plus, you can stay attuned to their pulse over time, with additional surveys sent at respectful intervals, combined with email communication that is targeted and personalized to each prospect. Automating this helps you collect the data you need to quantify those metrics.

It’s powerful, and it works!

Eventually, you will be able to say that Prospect A is 90% of the way along the consideration continuum, but Prospect B is only 60%, and here’s why. So prepare to make an ask for A, and alter your approach to keep cultivating the relationship with B.

I hope you agree that these metrics can revolutionize how you measure, track, and utilize your information for each major-gifts prospect and donor.

Want to know more? Click below to find out how you can automate building trust with major gifts prospects.

Learn more about major gifts fundraising automation.

Related Resources:

• Engagement Calling Metrics for Lead Outreach Associates Tasked With Arranging Meetings With Major Donor and Legacy Donor Prospects
• Whitepaper: Fundraising Automation
• 10 Ways to Deliver Value to Your Major Donors and Planned Giving Prospects
• The Fundraising Myth & Science Series, by Dr. Russell James

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