By Todd Cohen
Pricing named-gift opportunities is a critical task that should take place early in a fundraising effort and depends on a variety of factors, experts say.
“Number one is visibility,” says Janet Hedrick, senior associate in the Arlington, Va., office of Minneapolis-based Bentz Whaley Flessner.
“Who’s going to see it? How many people are going to see it? And the relative size of it, and the function.”
At the Museum of New Mexico Foundation, an eight-member campaign organizing committee of board members and large donors meets weekly to help develop strategy, including prices for naming opportunities.
In March, having developing a gift pyramid for its campaign, the committee sat down with the architectural plans for the new building, “and went over the size and scope of the space, the prominence of the space, and the use of the space,” says Colleen Kelly, the foundation’s director of development. “And we matched the gift pyramid to the relative value of the spaces.”
And using “Campaign Pyramid,” a $35 software program, the foundation develops a structure for its major gifts, including the number of gifts needed for each pricing level, and the number of prospects needed for each gift, typically four prospects per gift.
“You have to make sure you have that much depth in your donor pool to support those gifts,” Kelly says.
Once the committee agrees on a pyramid for the campaign, she says, “we tie the pyramid to naming opportunities.”
Setting prices for gift-naming opportunities can be tough and should reflect both what the market can bear and what the charity needs, including a range of named gifts proportionate to one another and in sync with overall campaign goals, experts said.
“Don’t make the price too modest,” Hedrick says. “Aim high. You want it to be the largest gifts. If you’re asking somebody for $3 million to name the building, and you actually need a $5 million gift to make the campaign a success, you have a problem.”
In planning its current campaign to establish a Children’s Brain Institute, Miami Children’s Hospital Foundation tentatively concluded the biggest gift it would need to achieve its $25 million goal would be roughly $4 million, says Hedrick, a consultant to the campaign.
Reviewing the pricing structure however, foundation officials realized that naming the institute itself, which the hospital expects to be a national model for pediatric medicine, could create a $15 million opportunity.
“When we started talking about naming opportunities, we asked, ‘What is it worth for someone to have their name on something so significant?’” Hedrick says, “and we concluded the value far exceeded what was at the top of the gift table.”
Other stories in the series:
Part 1: Charities, donors play name game.
Part 2: Process for soliciting naming opportunities begins early.
Part 4:Charities use naming opportunities for fundraising leverage.
Part 5: Charities look for ways to package gift-naming opportunities.
Part 6: Charities aim to avoid gift-naming pitfalls.
Part 7: Gift-naming a strategic fundraising tool for charities.