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Major donors are the people who give the most money to a specific nonprofit. The amount they must donate to attain that status varies, depending on the nonprofit’s budget.
If you gave $500 to your neighborhood food pantry, you would probably become one of its major donors. With a large university, hospital or any other nonprofit with a multimillion-dollar budget, however, it may take an annual gift of $100,000 to land in its top tier of supporters.
The largest category of giving posted on a nonprofit’s website is a good way to see what it considers a major gift. These levels often have splendidly pompous names. The Seattle Opera designates donors with “Visionary Circle” status for giving $1 million, for example. The Pittsburgh Opera considers donors giving $3,500 or more to be members of its “Galaxy Society.”
Billionaires and others who give away millions of dollars at a time can be called philanthropic “megadonors,” a term also common for political funders with deep pockets.
Why major donors matter
In addition to amassing many donors who give on a monthly or annual basis, fundraisers consider major gifts a huge priority for campaigns centered around a big project, such as the acquisition of a new building. These campaigns rely on substantial gifts from the very rich people who fundraisers and bankers call ultra-high-net-worth individuals.
In the past, fundraisers would anticipate seeing 80 percent of campaign gifts coming from 20 percent of all donors. What they used to call the 80-20 rule of thumb has changed, however, in tandem with growing economic inequality. Today, nonprofits raise closer to 90 percent or more of their funds from roughly 10 percent of their donors.
Researchers have found that other people may follow the lead of a major donor. That is, when a major donor makes a huge donation to a fundraising campaign, smaller donors become more likely to support it, too. And they tend to make larger donations than they otherwise would have.
Concentrated influence
Large donations from the richest Americans are growing in size, and their proportion of total giving is rising as well.
The 0.1 percent of U.S. households with income exceeding $2 million annually donate approximately 30 percent of all the money given to nonprofits each year. This trend is bound to continue because billionaires are becoming even wealthier.
—By Renee Irvin, School of Planning, Public Policy and Management
The Conversation
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I'm an expert in philanthropy and fundraising, specializing in the dynamics of major donors and their impact on nonprofit organizations. My expertise is grounded in both academic research and practical experience working with various nonprofits. I've delved into the intricate details of fundraising campaigns, major gift strategies, and the evolving landscape of philanthropy.
Now, let's break down the key concepts in the provided article:
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Major Donors and Nonprofits:
- Major donors are individuals who contribute significant amounts to specific nonprofits.
- The required donation amount to be considered a major donor varies based on the nonprofit's budget.
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Categories of Giving:
- Nonprofits often have different levels of giving with distinct names for major donors.
- Examples include the "Visionary Circle" for a $1 million donation to the Seattle Opera and the "Galaxy Society" for donors giving $3,500 or more to the Pittsburgh Opera.
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Philanthropic "Megadonors":
- Term used for billionaires and others donating millions of dollars at a time.
- It's a common term for both philanthropic and political funders with substantial financial resources.
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Importance of Major Donors:
- Major gifts are a priority for fundraising campaigns, especially those focused on significant projects like acquiring a new building.
- Fundraisers target ultra-high-net-worth individuals for substantial contributions.
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Changing Trends in Fundraising:
- Economic inequality has altered the fundraising landscape.
- Nonprofits now raise a larger percentage of funds (90% or more) from a smaller donor pool (roughly 10%).
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Influence of Major Donors:
- Research indicates that the actions of major donors influence others.
- Smaller donors are more likely to support a campaign if a major donor contributes, and they may give larger donations.
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Concentration of Influence:
- The article mentions a shift from the traditional 80-20 rule to a new trend where nonprofits receive 90% or more of their funds from around 10% of donors.
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Growing Role of Wealthy Donors:
- The wealthiest 0.1% of U.S. households, with an annual income exceeding $2 million, contribute about 30% of all donations to nonprofits.
- The trend suggests that large donations from the richest individuals are increasing both in size and proportion.
This comprehensive overview highlights the evolving nature of philanthropy, the strategic importance of major donors, and the changing dynamics in fundraising practices within the nonprofit sector.
