| TL;DR: – Annual giving provides steady, predictable revenue that funds your day-to-day mission. – Major gifts are large, relationship-driven donations that power big initiatives like capital campaigns or new programs. – Both streams are complementary, not competing, and a strong annual program often surfaces future major gift prospects. – Use AI-powered prospect research and marketing automation to manage both efforts more efficiently. – Prioritize based on timing and need, like leaning into annual giving during year-end campaigns while cultivating major donors in the background. |
Which is more important: annual giving or major gifts? Depending on who you talk to, you may hear drastically different opinions. The truth is that revenue streams are vital to your nonprofit’s long-term success and work together to drive growth.
But with limited time and resources, how do you manage each fundraising effort? When should you prioritize one over the other? Are there tools to help you manage both?
In this guide, we’ll answer all these questions and provide expert tips so your team can build a balanced communications plan that meets your short- and long-term goals. Let’s start by exploring the key differences between annual giving and major gifts.
Annual giving: Sustaining, reliable revenue
Annual giving refers to the broad base of donations your nonprofit receives throughout the year. These contributions come from a wide audience of donors at different giving levels, all of whom give to your nonprofit at least once a year.
Because annual giving is steadier and more predictable than major gifts, it serves as your organization’s financial backbone—essential, diversified funding that you can count on each year. Annual donors may not give multi-thousand-dollar gifts, but their combined efforts fuel your day-to-day mission and provide critical financial stability.
A strong annual giving program also opens the door for supporters from all walks of life to participate in your work, creating a larger, more diverse donor pool. When you cultivate relationships with annual donors, you may even discover that some of them are potential major giving prospects.
Best practices to boost annual giving
- Improve direct mail fundraising appeals. Many annual donors give at the same time every year (during the holidays, for example) and expect a regular, annual appeal at that time. Make your traditional direct mail appeals stand out through thoughtful storytelling, eye-catching design, and personalization.
- Schedule consistent touchpoints. Even if annual donors only give at the end of the year, it’s important to engage them year-round. Send several emails, text messages, additional direct mail appeals, and postcards throughout the year to keep them up-to-date on your organization’s work and show you haven’t forgotten them.
- Promote matching gifts to annual donors. Many of your regular donors are eligible for corporate matching gifts, which enable them to double their gifts by providing a contribution from their employer. To earn more from annual donors, Double the Donation recommends using a matching gift tool that automatically promotes this opportunity to eligible donors. [1]
- Highlight their ongoing impact. Show annual supporters that their gifts are impactful, no matter how much or how often they donate. Send periodic impact updates to emphasize the value of their contribution and explain exactly what you accomplished with their gift.
Major gifts: Powerful, relationship-driven donations
Major gifts are your nonprofit’s largest individual contributions. For some nonprofits, these might be $1,000 gifts, for others, $100,000. These donations drive major impact, making it possible for you to jumpstart a capital campaign, fund a new program, or close a budget gap.
Major donors make a substantial personal investment in your nonprofit. They’re often highly involved and influential after they give. They might serve on your board, introduce you to potential business connections, or participate in feasibility studies, for example.
Securing major gifts takes a lot of work. Prospective donors must deeply trust your nonprofit and feel personally connected to your mission before they give. As a result, you might spend months or years cultivating these relationships before making an ask.
Major gift fundraising best practices
- Leverage AI-powered prospect research. Securing major gifts starts with identifying which donors to cultivate relationships with. With AI-powered research tools, you can easily discover which supporters have the financial capacity and charitable habits that make them likely to make a major gift.
- Create highly individualized cultivation plans. Once you know who to focus on, design relationship-building strategies tailored to each individual’s interests. Your plans should include personalized outreach, invitations to get more involved, and plenty of one-on-one conversations about your nonprofit’s work.
- Give major donors exclusive access. Cultivate and steward donors by providing VIP access to important activities and information about your organization’s plans. You might invite them to board meetings or behind-the-scenes tours, for example.
- Plan several recognition strategies. Thank major donors both publicly and privately for their contributions to ensure they feel valued. Send handwritten thank-you cards, invite them to a celebratory dinner, and add their name to your nonprofit’s donor wall to show your appreciation.
When to prioritize annual giving vs. major gifts
Both of these crucial revenue streams should coexist in your nonprofit’s strategy and inform one another. However, it’s also true that you may need to prioritize one over the other at different times due to your organization’s immediate needs. That’s okay!
A number of factors may cause your nonprofit to lean in one direction or another, such as:
- Your organization’s resources and staff capacity
- Staff experience with soliciting annual and major gifts
- Your current fundraising campaigns’ goals
- The makeup of your current supporter base
- Your donors’ individual habits and giving capacities
- Your nonprofit’s strategic plan and highest priority goals
For example, say that you’re in the midst of planning a year-end giving campaign. Meyer Partners reports that 37% of annual giving occurs in the last three months of the year, so it makes sense to prioritize annual giving appeals at this time. [2] You might continue major donor cultivation in the background but focus your efforts on designing effective annual giving appeals.
Fundraising tools to boost annual and major giving
Your technology can make a big difference in both annual and major giving success. If you’re looking to boost efficiency and manage donor relationships more easily, consider these must-have platforms:
- Wealth screening and prospect research tools: Wealth screening platforms uncover hidden major giving candidates within your existing donor base.
- Marketing automation solutions: Plan, create, send, and track your most important marketing communications without the busywork. Leverage automation to design and implement outreach cadences to keep in touch with annual donors.
- Smart donor management tools: Certain platforms streamline list-building, messaging, and donor targeting to help nonprofits prioritize annual and major giving prospects.
For more insight into your donor base and how to best engage both types of supporters, choose tools with built-in data analysis and AI components.
These features help you discern which communications, appeals, and engagement tactics will best inspire giving. Once you know what works well, implement data-driven improvements across both your annual and major giving fundraising strategies.
Creating a cohesive fundraising strategy
Annual giving and major gifts are not competing priorities—they’re complementary efforts, and a strong annual giving program will often provide a pipeline for future major gift support. Use these tips and try out new technologies to create a holistic fundraising strategy that serves your current and long-term needs.
FAQs
What’s the main difference between annual giving and major gifts?
Annual giving is broad-based, recurring support from many donors at various levels, while major gifts are large individual contributions that require deep relationship-building.
Can annual donors become major gift prospects?
Yes. Cultivating relationships with annual donors can reveal supporters with the capacity and interest to make a much larger gift over time.
How do I decide when to prioritize one over the other?
Consider your current campaign goals, staff capacity, the makeup of your donor base, and your organization’s most pressing strategic priorities.
What tools help manage both annual and major giving?
Wealth screening and prospect research platforms, marketing automation solutions, and smart donor management tools with built-in data analysis and AI features.
How should I steward annual donors differently from major donors?
Annual donors benefit from consistent touchpoints and impact updates throughout the year, while major donors need highly personalized cultivation, exclusive access, and individual recognition.
What role does AI play in fundraising?
AI helps with prospect research, donor segmentation, campaign timing, and automating outreach so your team can focus on building relationships.
Sources:
[1] https://360matchpro.com/matching-gift-eligibility/
[2] https://www.meyerpartners.com/fundraising-blog/year-end-giving
