What is a Major Gift in Fundraising & Why It Matter?
We often get questions from nonprofit CEOs, managers, and fundraising professionals alike, “What exactly is a major gift?
Since we specialize in major gift and capital campaign fundraising, we’re talking about major gifts all day. But many people are unsure what exactly we are discussing.
Is it a large gift, a small gift, or a medium gift? The fact is, the exact amount that qualifies as a major gift actually varies depending on the organization and perhaps even the context. You see, it depends on the size of the organization’s budget, overall donor base and the typical size of the charitable gifts it receives.
A gift that may be considered major for a smaller organization may not be considered significant for a larger organization with a much larger budget. For example, if your organization raises millions every year, major gifts will be defined as quite large, obviously. A large gift at a major university could be defined as $100,000 or even more. Conversely, if your organization raises several hundred thousand a year, then a gift of $5k or $10k gets a lot of attention.
A major gift at a small community arts organization could be $5000. So you can see that the definition of a major gift varies based on the organization. Obviously, each individual organization will establish its own guidelines and criteria for what is termed a major gift. You get to define what a major gift is to your own organization.
Why do you want to define a level for major gifts for your organization?
In fundraising, there are several reasons we define what is a major gift for our organization:
1. Focus
Defining the amount of major gifts helps you focus your fundraising efforts on donors who are most likely to make significant contributions. You create a major gift fundraising program with identified donors and dedicated staffers. In addition, you are able to project how much revenue this donor segment might possibly provide to your organization. This helps you maximize your fundraising efforts and minimize the time and resources spent on less productive fundraising activities (like events!).
2. Clarity
Defining the amount of a major gift helps to provide clarity for donors. Many donors who are passionate about your mission do want to step up to the major gift level, and be recognized as true, dedicated major supporters. Defining what is a major gift helps donors understand what level of giving is required to be considered a major donor and what impact their gift can have on the organization’s mission.
3. Donor Recognition
Clearly, when you define the amount of a major gift, it helps your organizations recognize and acknowledge the very special donors who make significant contributions. Many donors like to be recognized as “major donors.”Most importantly, it can help build relationships with major donors and encourage even higher ongoing support.
Why do we like to track major gifts inside a fundraising program?
Obviously, tracking major gifts is a key part of any fundraising management reporting system. You want to know how well you are doing in this vitally important, high revenue area. And, making major gifts a special fundraising program/initiative with goals and systems helps you devote more energy to your work. Remember, “what gets measured gets done.” That’s why we want to track and measure major gifts! Tracking major gifts help us:
Set better fundraising goals:
Defining the level of a major gift helps us set realistic and achievable fundraising goals. When you orient your team towards a particular giving level, you can set appropriate – and achievable – fundraising goals, and track progress towards those goals.
Identify more potential major gift donors:
When you are focused on major gifts, you are looking for those lovely people who have both capacity and interest to make large contributions to your organization. These folks are often your most valuable and loyal supporters, and building relationships with them can lead to ongoing support and even larger gifts in the future.
Evaluate the effectiveness of your fundraising efforts:
By tracking the number and size of major gifts over time, you can assess whether your major gift fundraising strategies are effective – or not. And, you can make adjustments as needed.
Financial planning:
Measuring major gifts helps your organization plan and budget for future activities. By understanding the amount and timing of major gifts, your leaders can make informed decisions about how to allocate resources and plan for future growth. Our Campaign by the Numbers methodology allows you to measure where you are, what gifts are in play, and when to expect them, every step of the way.
Bottom Line: What is a Major Gift in Fundraising and Why it Matter?
Don’t forget, identifying and tracking major gifts should be an important part of fundraising for your organization. By focusing on major gifts, you can put your energy, resources and time to their highest and best uses.
