Garnering Major Gifts

It’s very common to find that more than 75% of all funds raised in a capital campaign come from major gifts, or contributions of $25,000 and above. A steadfast focus on major gifts is the hallmark of a successful capital campaign, and a strategy that yields rich dividends far beyond the campaign’s life.

The Pareto Principle

In 1906, Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country. He observed that 20% of the people owned 80% of the wealth. After Pareto made his observation and created his formula, many others observed similar phenomena in their own areas of expertise.

The “Pareto Principle” holds true in philanthropy and fundraising. Studies of philanthropic trends show that contributions from individuals make up the majority of charitable gifts. Major gifts from individuals can account for up to 90% of annual donations from as little as 5% of annual donors.

The same patterns of behavior hold true in capital campaigns. Focus your attention on the small pool of individuals with both the capacity and interest in the organization’s mission.

Working Smarter, Not Harder

A capital campaign requires significant human capital and precious financial resources—commodities that are scarce in most nonprofit organizations.

Staff and board members who are well-informed about major gifts fundraising are often pleasantly surprised to learn that asking for a gift of $100,000 or $1,000,000 doesn’t involve that much more work than asking for $10,000. True, the stakes are higher, but the same essential steps must be carefully followed.

In working smarter to secure major gifts, following a mantra of “prepare, prepare, prepare” is absolutely critical. Ensuring that those involved in all steps have had proper training and that each and every personal face-to-face solicitation is rehearsed and tailor-made are your keys to success.

Starting Strong with Large Lead Gifts

Leadership or “lead” gifts given early in a capital campaign by top prospects have a catalytic effect. Lead gifts set the benchmark for every single other gift throughout the life of a campaign. As illustrated in the two gift charts below, the difference between a lead gift of $500,000 or $1,000,000 for a $5,000,000 campaign can be remarkable: with the smaller lead gift you’ll need many more donors to achieve the goal.

Campaign Goal: $5,000,000

Number of Gifts	Gift Level	Cumulative Total Raised
1	$500,000	$500,000
3	$250,000	$1,250,000
10	$100,000	$2,250,000
20	$50,000	$3,250,000
40	$25,000	$4,250,000
75	$10,000	$5,000,000

 

Number of Gifts	Gift Level	Cumulative Total Raised
1	$1,000,000	$1,000,000
2	$500,000	$2,000,000
4	$250,000	$3,000,000
5	$100,000	$3,500,000
10	$50,000	$4,000,000
20	$25,000	$4,500,000
50	$10,000	$5,000,000

Thorough research and evaluation of major gift prospects will help determine the gift level amounts for each campaign. But bear in mind, the first few gifts will set the sights of all subsequent campaign donors. A truly awesome lead gift can generate early momentum, excitement, and confidence. Strive for a generous campaign leader and the highest possible amount in the top of the gift chart.

Focusing on Major Gifts in the Longer Term

Successful capital campaigns can help to gather the funds necessary for time-limited projects. In addition, they can have a transformative effect upon the fundraising culture of nonprofit organizations. Many nonprofits find that their first capital campaign is the force that finally brings the definition, commitment, and organization to support an ongoing major gifts program. Too often, an organization’s history of relying on safe, smaller-scale approaches (e.g. special events, direct mail, annual fund) can be real obstacles to implementing a major gifts program. A capital campaign focused on major gifts provides everyone involved with first-hand proof that seeking large gifts is not only possible, but in many cases hugely exhilarating!

CDS has been a leader in nonprofit fundraising for the past three decades. Contact us if you need more intensive help with your major gift fundraising, strategic planning, or in preparing for a capital campaign.

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