When Warren Buffett, the world's second-wealthiest man, announced in June that he was giving most of his £24bn fortune to charity, he was following a well-established tradition of philanthropy among the rich.
From 1601, when the Tudors passed the Charitable Uses Act to encourage giving, to today's proliferation of major donor initiatives at charities, the sector has long understood the need to attract the wealthy.
But according to experts such as Emma Halls, chair of the major donor group at the Institute of Fundraising and development director at the Prostate Cancer Research Foundation, too many charities are still letting these lucrative prospects slip away.
"Almost every week, there's a job advert for a major donor fundraiser," she says. "But our research has shown that, in many cases, the jobs are taken by people inexperienced in the role or not properly supported by the organisation."
According to Andrew Day, group chief executive of not-for-profit consultancy Compton International, this is a situation that urgently needs to be addressed because the success of any fundraising activity depends on major donations. About 80 per cent of the revenue brought in by most fundraising appeals is met by only 20 per cent of the donors.
Whether you are having trouble identifying major donors or trying to improve your relationships with the wealthy, this step-by-step guide should set you on your way.
1Identify prospects Day, who is also co-author of the reference guide Capital Fundraising in the UK, says one of the key problems facing charities is identifying large potential donors, such as Buffett.
Simply looking at a prospect's bank balance won't get you far, he says.
A number of other factors need to be researched, such as whether someone has a track record of giving, an interest in the charity's work or a personal connection with it.
"Having a list of rich people is not good enough," says Day. "The list could include the Sultan of Brunei or Richard Branson, but you still need to find out whether or not they have an interest in your organisation."
Day believes many major donors are already known to charities and that it is important not just to look at databases, but also to talk to staff, trustees and service users. "It is amazing how much information is held anecdotally by people in your own organisation," he says.
Paul Abbott, major gift project manager at Cancer Research UK, says the charity's research team suggests names of wealthy potential donors who might have a personal reason for giving to a cancer charity. These names are then cross-referenced against the charity's existing database to see whether they have given previously, before the team then looks for a personal connection "as a means to making an approach".
Mide Akerewusi, head of high value appeals at Scope, agrees that the personal link is crucial. "Peer approach is important," he says. "Our trustees and senior managers are always asked to look in their address books. As a service-delivery body, we have users and staff who come into contact with potential donors - it's vital to keep up to date with them."
2Provide information "This is the part where a lot of charities fall down," says Day. "They are unable to write in plain English what they need the money for and what the cost will be."
Even though, at this stage, it might be too soon to ask directly for money, it is important that potential donors are given information and made aware of the sums involved. "It feeds ideas," says Day.
Akerewusi agrees that this stage is crucial and that major donors should be informed in a context that suits them. Instead of relying only on communication through letters and direct marketing, Scope also organises dinners to update donors on any latest developments and areas in which funding is needed. And, because each dinner is paid for by a corporate partner, it doesn't cost the charity anything.
"We are planning a dinner at the moment, and inviting about 20 major donors," says Akerewusi. "It gives us an opportunity to update them about our work and gives them the chance to ask us questions. We also organise other activities, such as visits to see services in action."
3Find out what interests them It's important not only to inform prospects about a charity's work in an appropriate way, but also to find out what really engages them.
"You need to find out what interests them," says Day. "It might be that there is a particular part of your organisation that appeals - something they may be keen to fund or find out more about. You'll never know unless you ask."
Halls says a good way of building the type of relationship from which you can glean this information is to ensure prospects can connect with the organisation's most senior people and trustees.
"It's important that you have a major donor fundraising role, but a lot of these individuals would prefer to speak to the top people," she says.
When developing relationships between potential donors and the Prostate Cancer Research Foundation, Halls tries to set up a meeting with Sir Clive Bourne, the organisation's chair and founder.
"He has prostate cancer, so he is very moving on the subject and can explain about it better," she says. "I sit in on the meetings, but it is Sir Clive they have come to see."
According to Day, homing in on what interests prospects means that you avoid overwhelming them with information. "Ask them what they want to know but also how they want to receive the information," he says. "That way, it is tailored to their needs."
4Offer involvement A successful way of bringing potential major donors to the stage where they are ready to commit a large sum of money is to make them feel part of the organisation.
"You could ask them to volunteer their time," says Day. "It could be to give a speech or attend an open day. It needn't be a big commitment."
Jason Dyer, major donor fundraising manager at the Woodland Trust, says: "A common tactic is to invite someone to host an event to promote a campaign.
This offers a feeling of ownership and is a donation of sorts."
Abbott says CRUK tries to involve not only potential donors, but also influential people who can help to identify likely donors. For example, to support the building of its research laboratory in Cambridge, the charity has set up an appeal board "that includes people of influence who can ask other people for funds".
5Ensure a donation Day says: "When it comes to asking for an investment, you want the person to express surprise at not being asked before. If you have followed the previous rules, you will have identified, informed and involved the prospect to the point where the donation is inevitable."
Halls adds that it is crucial to ensure that ways of investing are properly presented. The Prostate Cancer Research Foundation, for example, is currently seeking funding for a £40,000-a-year research post at Nottingham University to investigate lifestyle influence on younger men and prostate cancer.
"This is the kind of research that will appeal to a certain type of donor, perhaps one who is young himself," she says.
The Woodland Trust knows the importance of effectively packaging ways major donors can contribute. For its Trafalgar Woods Project, which replaces ancient woods lost to provide ship-building materials during the Napoleonic Wars, donors can buy a grove for between £11,000 and £20,000.
One charity that appreciates the value of engaging with major donors is the Peterborough Cathedral Development and Preservation Trust.
After it was launched in 1995, one of the trust's early tasks was to raise £7.3m by 2001 for major restoration and development work. It quickly realised that attracting major donors would be crucial to its success.
Among the charity's key targets were Sir Stephen Hastings, a war hero and former MP, and his wife, Lady Elizabeth Anne. As residents in local manor house Milton Hall, they were familiar with the cathedral and among the area's most influential people.
The couple were approached by the Very Rev Michael Bunker, the then dean, who persuaded Sir Stephen to become chair of the trust. While Bunker was in this role, the couple not only made what he calls "a considerable" personal financial contribution, but also attracted other major donors.
The appeal reached its target on time, including £1m to set up a music endowment fund to secure the future of the cathedral's choir and organ.
This was originally named after Lady Hastings, who died in 1997, and is now called the Hastings Music Endowment Fund after Sir Stephen's death last year.
During his chairmanship, Sir Stephen was also involved in a successful appeal to raise about £1m after a fire at the cathedral in 2001. This initiative gained the support of Prince Charles, who visited the cathedral during the restoration work.
The trust continues to raise funds and in 2002 set up a scheme called the Company of St Peter, which enables donors to get more involved in cathedral life, such as attending dinners and lectures. Another scheme enables donors to contribute to the £5,000 daily cost of providing music at the cathedral.
CLICKING WITH DONORS
The internet is a useful tool not only for identifying and engaging with potential supporters, but also for ensuring that the process of donating is simple.
Jim Raymond, commercial director at Baigent, which develops websites and e-fundraising packages for the British Red Cross and Cancer Research UK among others, says visitors to the sites are often those who have heard about the charities' work and are interested in further information.
"Appeals for a specific cause are a good way to bring in visitors," he says. "Once people see something on the news, they need to be able to find the relevant website easily."
But he warns against asking for money too soon. "Most visitors will be looking at the site because they are interested in the issue or appeal and want more information," he says. "You need to supply that and then show them how they can donate. It is important to get the timing right."
Podcasts and blogs from service users and workers are among the innovative ways in which charities are offering information to prospects online.
Even though the majority of online donations are at the low end of the spectrum, Raymond insists it is also a useful means of attracting major donors. "This could be through a specific site about corporate giving, but there are also some very large one-off payments made online," he says.
When this happens, he adds, Baigent will inform a charity's major donors team so they can engage with the donor for further fundraising opportunities.