Understanding the need to concentrate on major gifts is the Number One strategy for Capital Campaign success—and beyond—for every nonprofit organization

By: Rebecca Goodwin

It’s very common to find that more than 75% of all funds raised in a Capital Campaign come from Major Gifts – contributions of $25,000 and above. Reviewing the answers to the four questions posed below will help you understand why a steadfast focus on Major Gifts is not only "the hallmark" of a successful Capital Campaign but also a strategy that yields rich dividends far beyond the life of a campaign.

Do you understand the Pareto Principle?
In 1906, Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country, observing 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. For example, quality management pioneer Dr. Joseph Juran, working in the U.S. in the 1930s and ’40s, recognized a universal principle he called the "vital few and trivial many."

The “Pareto Principle” or the “80/20 Rule” holds true in philanthropy and fundraising. In fact, studies of philanthropic trends show that contributions from individuals make up the majority of charitable gifts, and Major Gifts from individuals can account for up to 90% of annual donations to non-profit organizations from as little as 5% of annual donors.

The same patterns of behavior hold true in Capital Campaigns, because resources are concentrated in “the vital few.” Focusing the attention on the small pool of individuals with both the capacity and interest in the organization’s mission is the superior course of action.

Does working smarter, not harder, appeal to you?
A Capital Campaign is an extraordinary undertaking requiring significant human capital and precious financial resources – commodities that are scarce in most every non-profit organization.

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 – prospect identification, research, cultivation, solicitation and follow-up— 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, will be the keys to success.

i>Do you believe in starting strong?
Leadership or “lead” gifts given early in a Capital Campaign by top prospects have a catalytic effect, setting 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.

Thorough research and evaluation of Major Gift prospects will help determine the chart of gifts that is right for each campaign and the right gift level amounts at the top of the pyramid. But bear in mind, whatever its dollar value, the first gift and the few that follow will set the sights of all subsequent campaign donors. Because of the early momentum, excitement and confidence that a truly awesome lead gift can generate, striving for a generous campaign leader and the highest possible amount in the top of the gift chart are principles that shouldn’t be compromised.

Do you want to adopt or emphasize a Major Gifts focus for your development program in the longer term?
Aside from helping to gather the funds necessary for time-limited “bricks and mortar” projects, successful Capital Campaigns built around Major Gifts can have a transformative effect upon the fundraising culture of non-profit organizations. Many non-profits 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, overcoming inertia or an organization’s history of relying on the “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 – senior management, board leadership and loyal donors – with their own personal experience and first-hand proof, that seeking large gifts is not only possible but in many cases hugely exhilarating!

Finally, as you plan your Capital Campaign you will doubtless turn to books and articles by fundraising professionals, development colleagues in other non-profits or philanthropic leaders in your own community. You can start with the archives for CDS’s Fundraising Free Press and then plan to visit personally with those who have been successful and seek their advice. Chances are they’ll tell you about how they started with and kept a steadfast focus on Major Gifts. Their inspiring stories will bring to life the very principles and ideas shared in this article.

Rebecca Goodwin is a Senior Campaign Director for Custom Development Solutions, Inc. (CDS). CDS has become one of North America's best and most sought after fundraising consulting firms specializing in the strategic planning and tactical execution of capital campaigns for non-profits throughout the United States and Canada. If you have a fundraising question, please call 800-761-3833 or send an e-mail to info@cdsfunds.com.