“There are winds of destiny that blow when we least expect them,” says an old proverb. In the case of windfall gifts, how you harness and direct those breezes from out of nowhere can lead to a more successful future for your small nonprofit!
What is a windfall gift?
The Bridgespan Group defines windfall gifts as “large, flexible, often multiyear influxes of funding.”
Although windfall gifts are unexpected, they shouldn’t be considered a stroke of luck. Windfall gifts are typically donated by existing donors as a result of a nonprofit’s history of delivering on its mission and thoughtfully engaging donors.
The beauty of a windfall gift is that it can unlock opportunities to expand or improve an existing program, launch a new program, or build up the organization’s reserves. Although windfall gifts come out of the blue, you can maximize their value through proactive planning.
Here are four steps small nonprofits can take to ensure windfall gifts are used wisely and increase the likelihood of receiving windfall gifts in the future!
1) Create a windfall gift policy.
What areas of your nonprofit would benefit most from unexpected funding? Which areas are the highest priorities? Which areas would deliver the greatest impact? Do you need to upgrade your facilities or technology? These are factors to consider when choosing how to allocate a windfall gift, which is usually associated with an unrestricted fund.
Create and document a formal policy for unexpected, unbudgeted gifts over a certain threshold, and integrate the policy with your strategic plan for long-term stability. Also, be transparent with donors about how windfall gifts will be prioritized and allocated. This will help you build stronger relationships with donors and potentially receive more donations!
2) Record, track, and manage the gift.
You received a windfall gift. Now what? Enter the details into your donor management software and associate the gift with a donor. There’s a good chance the donor already has a profile, so review their history and add as many details as possible – the amount of the gift, the reason for the gift, recent donor engagement, etc.
3) Strengthen the donor relationship.
A windfall gift is usually a large donation. Beyond the standard “thank you” email, have a staff or board member call and thank them. Schedule a meeting to reinforce your gratitude and learn more about them. What drove their decision to donate? Why are they passionate about your mission? Share this story with your supporters!
Invite the donor to become more involved with your nonprofit if they’re not already. Make sure they know how the gift will be used and provide regular updates on the impact their gift has made. The donor could very well decide to make another gift!
4) Encourage windfall gifts.
Again, windfall gifts are usually the product of intention, not luck. Make it as easy as possible to donate by prominently displaying a “donate” button on your website and social pages and in your emails. Include a section for legacy and estate gifts on your “donate” page. Also, look for opportunities to build relationships with foundations and attend events that cater to high net-worth donors who have the capacity to make a large donation.
A Real-World Windfall Gift and How It Came to Be
One Eleo customer offers a variety of programs to meet the basic needs of their community. A recently retired contractor started volunteering as a handyman for the nonprofit after his wife passed away. Several years later, he decided to make a donation in memory of his wife, an educator for many years in the area, to upgrade the facilities that he had been fixing up as a volunteer.
Although he had donated previously, the nonprofit’s leadership had no idea that he would become the organization’s largest individual donor. The money was earmarked as intended – to bring much needed improvements to the nonprofit’s building, which the nonprofit had previously identified. The donor’s wife was then honored and recognized at a major fundraising event, and he continues to volunteer for the nonprofit.
These kinds of stories are possible with a little proactive planning! Start taking steps to create a policy, carefully manage your windfall gifts, strengthen relationship with donors, and become more intentional about creating an environment that encourages windfall gifts!
