Why Principal Gifts Matter
By Will Whiting
Thankfully the uncertain days of 2020 are behind us. As life has slowly returned to normal on one front, fears of a recession have become another challenge before us. As organizations tighten their belts, the demand for philanthropic support becomes more important than ever. With that added financial pressure, it is critical that fundraising shops demonstrate operational excellence to ensure the organization’s continued success.
With these increased expectations in mind, teams have begun to think differently about the allocation of resources for fundraising divisions. Once driven by annual and major gifts, fundraising shops now often strategically hire skilled gift officers to focus on the very top of the donor pyramid, commonly thought of as principal or presidential gift prospects.
The definition of a principal gift prospect varies by shop, but most organizations define principal gifts as investments of one million dollars or more. Regardless of the organization’s size or the depth of the donor pyramid, principal gift prospects represent the very top of the donor base. These donors are often highly sophisticated and well-versed in philanthropy. They understand the value proposition and the impact their philanthropy will have on the organization and its constituents.
For philanthropy teams, setting up a principal gifts program requires the investment of time and resources, and sends a message to those inside and outside of the organization. Internally, it often shifts the narrative around philanthropy. Institutional leadership, physicians and faculty must embrace a new way of thinking about philanthropy. They must commit to being good partners with Advancement to help shape exciting funding opportunities that are in alignment with institutional priorities. Doing so signifies a culture shift, and it sets the framework for Advancement professionals to engage internal stakeholders in new ways. It challenges the status quo by forcing organizations to demonstrate their commitment to advancement with this class of identified donors.
Outside of the organization, establishing a principal gift programs also sends a very clear message. These programs provide investment opportunities that allow donors to demonstrate their commitment and be recognized for their tremendous impact. Creativity is celebrated, and extraordinaryis expected. Principal gift officers are encouraged to create magical moments for these prospects. Implementing and developing this new way of thinking requires deliberate and consistent action at all levels of the organization, as well as a healthy dose of patience.
Each month, we will explore the characteristics of sound principal gift programs and review case studies that prove their worth. Tips for identifying, cultivating, and soliciting principal gift prospects will be shared. We will also discuss the power of thoughtful stewardship to recognize principal gift donors. In almost all cases, principal gifts are bigger than any one Advancement professional. It takes creative thinking, cross-institutional collaboration, and an unrivaled work ethic to take a principal gift donor through the life cycle of making a gift; but, just one donor can make a principal gift that creates a ripple that changes lives for generations to come.
Will Whiting is a Subject Matter Expert for GOBEL. He serves as Executive Director of Principal and Presidential Gifts at the University of Texas at Austin. Will is inspired by the generosity of others and the impact of transformational gifts, and he strives daily to make those gifts of a lifetime occur. Will also founded Principal Gift Guru and can be reached at firstname.lastname@example.org.
ABOUT GOBEL SUBJECT MATTER EXPERTS: GOBEL Subject Matter Experts are healthcare philanthropy professionals working in some of the top shops in the country, sharing best practices and insights. For more information about GOBEL’s Subject Matter Expert program, or to suggest a topic for coverage, email email@example.com.