Rule #8: The 2% Rule for Major Gifts

Rule #8: The 2% Rule for Major Gifts

When it comes to asking for a major gift, it can be difficult judging what precise amount to ask for. So what can you use as a guide? Think 2%. Essentially, this rule means that if you want to ask someone for a major gift, such as $1 million, then try to make sure you are asking someone with at least $50 million net worth ($1 million is 2% of $50 million).

PRACTISED AND PROVEN

When I first heard this rule, I had my doubts. But after much involvement in conversations and asks with many major donors over many years, I have to say that it has proven to be remarkably useful.

BEYOND THE 2%

There are circumstances where one could venture beyond 2%. For example, sometimes a donor is so strongly supportive of a cause they will contribute well beyond a 2% proportion of their net worth. Also, as donors get older, it will often be the case that the proportion they give becomes much higher: sometimes far in excess of 2%, and in the case of bequests it could be a very substantial proportion of their net worth.

THE APPROPRIATE FIGURE

So 2% is helpful, but what else can you do to arrive at an appropriate figure for an ask? The answer to this question is connected to the reason why it is good practice to build relationships and have mature, honest conversations with donors from the beginning.

TEST AMOUNTS WITH DONORS

Good fundraisers take time to get to know a donor, and they will talk about projects and what projects will cost. They are looking for opportunities to test amounts with donors during early conversations. They are looking for signs that the donor is comfortable in considering a high amount or whether a lower amount is appropriate.

THE RIGHT GIFT LEVEL

If you have taken the time to build trust, and you are talking about a project that the donor strongly cares about, it is remarkable how well a donor will work with you to find the right gift level.

 

The 2% rule is a simple one to remember, but it is not always easy to implement. If your nonprofit organisation needs help with major gift solicitations, chat to the AskRIGHT team.

Jeff Buchanan

Senior Associate at AskRIGHT
Jeff has 15 years experience as a professional fundraiser and consultant, achieving considerable success for several organisations, and recognised by his peers for national awards.

To find out how Jeff can help your organisation, contact j.buchanan@AskRIGHT.com.
Jeff Buchanan

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