Major Giving Basics

Major giving is often the largest revenue source for nonprofits, so being able to identify and build relationships with large-gift donors is crucial to successful fundraising efforts. In this article, we will go into more detail about major gifts, major donors, and how software can help identify prospects.

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What are Major Gifts?

Major gifts are donations made to nonprofit organizations of significant value (larger than their average gift). For some organizations, that might mean a donation larger than $10,000. For some smaller nonprofits, that could mean a gift of $1,000 or more.

There is no exact rule on how to qualify major gifts, but one easy way to set a threshold is to add up the donations made in the past year and divide it by the number of donations made. For example:

Donation Amount ($500,000) / Number of Donations (250) = Average Donation Size ($2,000) 

For this organization, they might consider any donation more than $2,000 to be a “major gift.”

Why does this matter?

By defining what a major gift is to your organization, it enables you to identify and track the relevant people in your database who are or could be major donors. For planning purposes, it’s also useful to note that major donors typically  require more hands-on, personalized stewardship.

What are Major Donors?

Major donors are the individuals or businesses making the largest contributions to a nonprofit organization. There are several motivations for donors to make a major gift:

  • Deep personal connection: Often, the mission simply resonates with a major donor in a personal way and they feel motivated to contribute even if they aren’t directly involved in the day-to-day operations of the organization. For example, someone affected by a disease might feel compelled to raise funds for medical research and prevention.
  • Legacy: Some major donors want to “leave something behind” and have their name associated with a positive cause. It’s not uncommon for a major donor to have a building, field, or scholarship named after them.
  • Tax benefits: Major gifts are often tax deductible. This is a huge incentive for high-net-worth individuals looking to reduce their taxable income.
  • Corporate social responsibility: Businesses often contribute major gifts as part of their CSR initiatives. These programs are great for improving employee engagement and boosting public image.

Understanding these motivations and the unique value your organization offers to supporters can help your nonprofit effectively cultivate relationships with potential major donors and encourage their continued support.

Software for Major Gift Programs

So how do nonprofits go about finding potential major donors? A variety of software analytics tools can simplify the process. Blackbaud, for instance, offers platforms for both prospect research and wealth screening.

Prospect Research Software

Prospect research tools allow users to identify potential major donors based on their giving history and wealth indicators. ResearchPoint™, the leading platform for prospect research, offers the ability to create prospect wealth profiles and segmentation to tap into the personal motivation that drives major giving.

Wealth Screening Software

Wealth screening is a specific component of prospect research and helps determine how likely an individual is to contribute a major gift based on their net worth and prior philanthropic activity. Blackbaud Raiser’s Edge NXT® provides a suggested donor type by analyzing public assets owned by an individual such as real estate, private company ownership, and public company holdings. These records help to establish an individual donor rating which can be used to inform decisions on outreach, gift ask amount, etc.

Contact us today to see how our major gift solutions can be the perfect asset for your nonprofit!