The Annual Campaign Versus Major Gifts Mindset: Navigating the Shift

The 2008 financial crisis highlighted the need for more than traditional relationship-based fundraising techniques to secure the principal-level gifts needed by nonprofit organizations across the U.S. This realization led to an increased focus on mid-level donors through annual campaigns and using data-driven development strategies to drive fundraising efforts. 

Consequently, the fundraising landscape shifted from what was largely an art to include a much greater emphasis on the science and performance of gift officers. Additionally, there was a closer focus on the talent pipeline for major gifts fundraisers, with a new interest in sourcing them from the annual fund. Another outcome of the financial crisis was that most supervisors of frontline fundraisers had backgrounds in either annual giving or major gifts, but not both. This created a gap in training gift officers in the essential skills to manage major donors' complete philanthropic engagement with an organization.

Despite this, the promotional structure evolved and began with annual fund positions, followed by mid-level giving roles and, ultimately, major and planned giving positions. Each of these areas demands distinct hard and soft skills. However, many officers were left to navigate these transitions on their own, as their supervisors had not experienced the same career path.

Today, we see that managing relationships through annual giving requires one set of skills while managing major gifts necessitates another. Annual giving focuses on cash transactions, whereas major gifts emphasize building relationships and securing wealth. Different scientific principles drive both approaches.

Understanding these distinctions and adopting the appropriate mindset can significantly impact a nonprofit's strategic approach to donor cultivation, stewardship and long-term philanthropic growth.

Annual Giving: The Pursuit of Immediate Support

Annual campaigns typically encompass contributions from the broadest base of our supporters. These donors participate in our annual campaigns through their personal or family giving. These campaigns are crucial in sustaining a nonprofit’s yearly operating budget and keeping “boots on the ground” — getting the work done. 

The mindset of an annual campaign fundraiser revolves around the immediate opportunity: What is the biggest gift we can secure from this donor this year?

While long-term engagement remains important, the primary focus is on the present year's cash giving.

However, it's essential to recognize the purpose of annual campaign fundraising in conjunction with the entirety of the donor pyramid. Annual campaigns ensure continuity and widespread appeal, serving as the "front porch" for donors to get involved with the organization. They provide a solid foundation for developing relationships and are instrumental in nurturing the initial stages of a donor's personal philanthropic identity. 

Furthermore, annual campaigns establish a reliable base of support that not only sustains yearly operations but also creates opportunities for deeper donor engagement and progression toward major and transformational gifts.

Annual Campaign Challenges

Annual campaigns not only sustain the nonprofit's yearly operating budget and draw in a broad base of donors with varying capacities but also serve as a critical starting point for building donor relationships. These campaigns enable donors to discover and develop their philanthropic identity, laying the groundwork for future major and transformational gifts. 

This dynamic environment influences several key aspects of fundraising strategy and presents unique challenges.

Short-Term Focus

Fundraisers often prioritize immediate cash gifts to align with yearly budgets and specific campaign targets. This approach typically involves leveraging donors' discretionary income to help meet current campaign goals.

Soliciting Gifts for Organizational Priorities Over Donor Interests

To meet the scale required for annual fundraising, nonprofits often offer a "menu of options" or a fixed list of opportunities. This approach reflects donors' commitment to supporting what the organization wants rather than necessarily aligning with what the donor personally cares about.

Retention Challenges

Retention challenges arise from the primary focus on annual giving, often relegating donor loyalty and retention to a secondary concern. This results in difficulties securing consistent, long-term funding, particularly among organizations that undervalue engagement and cultivation. According to the Fundraising Effectiveness Project, the overall donor retention rate dropped 2.5% in 2023, with first-time donor retention at 7.4% and repeat donor retention at 37%, both continuing a downward trend.

Major Gifts Fundraising

In contrast, major gifts fundraising requires a strategic shift in mindset from immediate returns to long-term commitments. This approach focuses on securing significant wealth-giving partnerships and involves understanding donor behavior over multiple years. Here’s how it differs.

Long-term vision. Major gifts fundraisers focus on multi-year strategies, asking critical questions, such as "What will this donor's giving look like next year, three years from now, five years out?" This perspective shifts the conversation from one-time gifts to sustainable partnerships.

Wealth versus cash giving. Unlike annual campaign gifts, major gifts typically originate from a donor's accumulated wealth rather than discretionary income. The conversations involve understanding the donor's overall philanthropic priorities, liquidity and how these will evolve over time.

Donor linkage, ability and inclination. I have personally found success in the following key factors, which I did not develop, but I did refine to be right to the point.

• Linkage. How strongly is the donor connected to the organization’s mission?
• Ability. Does the donor possess the financial capacity to make a significant gift?
• Inclination. Is the donor inclined toward philanthropic giving, and how can we nurture this inclination?

Strategic partnership opportunities. Major gifts fundraisers explore the donor’s passions, identifying project-specific partnerships aligned with the organization’s priorities. Finding true partners often requires facilitating comprehensive planning over several years, tailoring engagement strategies and maintaining consistent stewardship.

This is part one of a two-part series delving into the differences between annual campaigns and major gifts. Check out part two here.

The preceding post was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.