What is a Major Gift?
A major gift is different at every organization and to every donor. My career in fundraising illustrates this point.I started my career in fundraising at the battered women’s shelter. We rarely received gifts over $1,000. Our first $10,000 gift was cause for major celebration! That was a MAJOR Gift. Any personal gift over $1,000 was a major gift there.
Rutgers University was my next stop. There a major gift was $25,000 or more. Just down the road was Princeton University where Major Gifts didn’t start until $100,000 or more. I’m certain it’s $1 million or more now.
If you’re at a small organization, just getting started with personal giving and major gifts is enough of a challenge. It would be ridiculous to hold you to the standards of Princeton University.
Let’s set some parameters for determining the size of major gifts at your organization.
3 Reasons Why Size Matters
There are three important reasons for knowing how much a major gift is at your organization.
1. Donor Recognition
Special Donors get special recognition. Setting the Major Gift amount focuses your recognition efforts.
Knowing what a major gift is determines who gets recognition on things like Donor Walls.
Major Donors get personal recognition, like calls from a board member and a handwritten note from the executive director.
It’s nice to think that every single donor to your organization will receive a personal call and a handwritten note, but sometimes that’s simply not practical or even possible. Knowing your major gift levels will help you determine who must get the royal treatment.
You’ll want to acknowledge all donors, of course, but your major donors should always get VIP treatment.
2. Time Management
Setting a major gift size helps you manage your time. If it makes sense to go meet with a donor to ask them for $1,000, then that’s a major gift at your organization.
If you’re thinking, “No way!” then how about $10,000?
It’s a matter of time management. I don’t know many development directors who wouldn’t make time to visit with a donor to ask for $10,000.
Leadership level gift managers spend their time focused on donors who could give $1M or more, but we’re not quite there yet.
The third reason for setting a major gift size is for accountability and tracking metrics. If your major gift levels start at $10,000, then you will be able to easily track how many $10,000 plus gifts you received this year.
So How Big is a Major Gift for You?
Now that we know some benefits of setting a major gift size, let’s determine what works at your organization.
Remember, gifts don’t have to be over six figures to be considered major, and they aren’t only for capital campaigns. There’s no better way to skyrocket your annual fund than to infuse it with some major gift power.
This week’s action item will help you determine what constitutes a major gift at your organization.
Challenge Yourself Action Item
Step 1: Run a list of your top donors
The simplest way to determine a major gift level is to run a list of your top 10 donors for the last 12 months. Exclude any foundations or corporations on the list. Let me say that again — you’ll want to eliminate any foundations or corporations from the list. (However, if you have donors who give from their family foundations without grant applications, it’s fine to include them.)
Also, exclude any extreme outliers or one-time gifts. In other words, if you received $100,000 from a bequest or in honor of someone, but it’s unlikely you’ll receive another gift of that level this year, don’t include it in your top 10.
Total up the donations from the top 10 donors (they may have given multiple times throughout the year – use their total giving in your calculation). Now divide by 10.
Step 2: Average your top 10.
Take the average of the top ten donor’s totals from last year. Now round up to the nearest $5,000. If your average major gift level is $8,500, then round up to $10,000.
Remember, fundraising is an art and a science. In this case, there are no hard rules to determining what you consider a major gift at your organization.
Be realistic yet optimistic when picking an amount. Be optimistic, because you’re growing your major gift program and you don’t want to play it too safe or small. Consider where you want to be 3 years from now, not simply where you are today. However, if you’ve never received a gift of over $1,000, then $25,000 is probably too high. Start with a more realistic number like $5,000.
This post was originally published on AmyEisenstein.com in 2018.