Major Gifts and Planned Giving
Expert-defined terms from the Advanced Skill Certificate in Donor Relations and Fundraising course at LearnUNI. Free to read, free to share, paired with a professional course.
Annual Giving #
Annual Giving
Definition #
A fundraising strategy that solicits modest, regular contributions (often monthly or yearly) from a broad donor base to provide reliable operating income. Example: A nonprofit asks supporters to set up a $50 automatic credit‑card payment each year, boosting cash flow for program expenses. Practical application: Use segmented messaging to highlight the impact of each annual gift and automate reminders through donor management software. Challenges: Maintaining donor enthusiasm over time, preventing “donor fatigue,” and ensuring the administrative cost of processing frequent small gifts does not outweigh revenue.
Asset #
Based Fundraising
Definition #
Soliciting donations that involve the donor’s assets, such as real estate, securities, or business interests, rather than cash. Example: A philanthropist transfers a rental property to a charity, which then sells it to fund a scholarship program. Practical application: Train development staff to recognize asset‑rich prospects and collaborate with financial advisors to structure tax‑advantaged gifts. Challenges: Complex valuation, legal compliance, and longer decision cycles compared to cash gifts.
Bequest #
Bequest
Definition #
A provision in a donor’s will that designates a specific amount or asset to be transferred to a nonprofit upon the donor’s death. Example: A donor leaves $100,000 to a museum in her will, earmarked for a new wing. Practical application: Incorporate bequest language in donor communications and provide sample will clauses to simplify the donor’s process. Challenges: Uncertainty of timing, probate delays, and the need for accurate tracking of promised future assets.
Charitable Gift Annuity (CGA) #
Charitable Gift Annuity (CGA)
Definition #
A contract where a donor transfers cash or securities to a charity in exchange for a fixed annuity payment for life, with the remainder benefiting the organization. Example: A retired couple gives $250,000 to a university and receives a 5% annuity for life, with the residual supporting scholarships. Practical application: Partner with licensed insurance professionals to structure CGAs and educate donors on the tax benefits. Challenges: Regulatory compliance, actuarial calculations, and ensuring the charity’s financial stability to meet annuity obligations.
Donor Stewardship #
Donor Stewardship
Definition #
The process of nurturing and maintaining donor relationships through communication, recognition, and reporting on impact. Example: Sending a personalized thank‑you video and an annual impact report to a major donor who contributed $250,000. Practical application: Develop a stewardship calendar that aligns touchpoints with donor preferences and major gift milestones. Challenges: Balancing personalization with scalability, avoiding over‑communication, and measuring stewardship effectiveness.
Donor‑Advised Fund (DAF) #
Donor‑Advised Fund (DAF)
Definition #
A separately managed investment account held by a public charity, where donors receive an immediate tax deduction and can recommend grants over time. Example: A donor contributes $500,000 to a DAF and later directs grants to three environmental NGOs. Practical application: Offer guidance on grant eligibility and impact reporting to encourage strategic use of DAFs. Challenges: Limited control over how quickly funds are disbursed, potential for “donor fatigue” if DAFs are over‑promoted, and regulatory scrutiny.
Estate Gift #
Estate Gift
Definition #
A planned donation made through a donor’s estate plan, encompassing bequests, charitable trusts, and other asset transfers upon death. Example: A philanthropist includes a charitable remainder trust in her estate, providing annual income to her family and a remainder to a hospital. Practical application: Conduct estate planning workshops with legal partners to identify opportunities for legacy gifts. Challenges: Complex tax implications, lengthy execution timelines, and the need for precise documentation.
Gift Acceptance Policy #
Gift Acceptance Policy
Definition #
A set of guidelines that outlines the types of gifts an organization will accept, including conditions, restrictions, and procedures for evaluation. Example: A museum’s policy excludes gifts that impose political endorsements or compromise curatorial independence. Practical application: Review the policy annually with legal counsel to reflect changes in regulations and organizational capacity. Challenges: Balancing donor generosity with mission integrity and managing potential reputational risks.
Gift Annuity #
Gift Annuity
Definition #
A financial arrangement where a donor receives a fixed annuity payment for life in exchange for a charitable contribution, similar to a CGA but often less regulated. Example: A donor gives $150,000 to a church and receives a 4% annuity, with the remainder supporting community programs. Practical application: Ensure clear communication of annuity terms and tax benefits to donors. Challenges: Legal compliance varies by jurisdiction, and donor understanding of the product may be limited.
Gift Matching #
Gift Matching
Definition #
A program where an organization or employer matches donor contributions dollar‑for‑dollar up to a specified limit, amplifying the impact of each gift. Example: A corporation matches employee donations up to $5,000 per year, doubling the total raised for a literacy campaign. Practical application: Promote matching opportunities in appeals and provide easy tracking tools for donors. Challenges: Coordinating with corporate partners, managing matching caps, and ensuring timely verification of matches.
Gift Restriction #
Gift Restriction
Definition #
A condition placed by the donor specifying how a gift must be used, such as for a particular program, capital project, or time period. Example: A donor restricts a $200,000 gift to fund only the construction of a new research lab. Practical application: Record restrictions in the donor database and monitor compliance through regular reporting. Challenges: Balancing restricted and unrestricted funds, and potential constraints on organizational flexibility.
Gift Solicitation #
Gift Solicitation
Definition #
The act of requesting a donation from a potential or existing donor, tailored to the donor’s capacity, interests, and relationship stage. Example: A development officer presents a $250,000 capital campaign proposal to a foundation after thorough research. Practical application: Use a structured ask framework (e.G., “Ask‑Tell‑Ask”) to guide conversations. Challenges: Timing the ask appropriately, handling donor objections, and aligning the ask with the donor’s philanthropic goals.
Gift Stewardship #
Gift Stewardship
Definition #
Ongoing activities that recognize, thank, and keep donors informed about the outcomes of their contributions. Example: Sending a personalized anniversary card to a donor who made a major gift three years ago. Practical application: Integrate stewardship actions into a CRM workflow to ensure timely follow‑up. Challenges: Maintaining personalization at scale and measuring the ROI of stewardship efforts.
Gift Timing #
Gift Timing
Definition #
The strategic consideration of when to request and receive gifts to align with organizational budgeting, tax cycles, and donor giving patterns. Example: Soliciting major gifts before the end of the donor’s fiscal year to maximize tax deductions. Practical application: Map donor giving calendars and coordinate campaign launches accordingly. Challenges: Predicting donor readiness and managing cash‑flow volatility.
Gift‑In‑Kind (GIK) #
Gift‑In‑Kind (GIK)
Definition #
A donation of goods or services rather than cash, such as equipment, real estate, or professional expertise. Example: A law firm provides pro‑bono legal services valued at $75,000 to a nonprofit. Practical application: Assess the market value of GIKs and document them for tax receipt purposes. Challenges: Valuation difficulties, storage or maintenance costs, and potential liability issues.
Impact Reporting #
Impact Reporting
Definition #
The process of communicating the results and societal changes achieved through donor contributions. Example: An annual report showing how a $1 million endowment funded 50 scholarships over five years. Practical application: Use data visualization tools to present impact metrics clearly to donors. Challenges: Collecting reliable data, attributing outcomes directly to specific gifts, and avoiding “impact fatigue” among donors.
Incentive Gift #
Incentive Gift
Definition #
A reward or acknowledgment given to donors (often in the form of naming opportunities or events) to encourage larger or repeat contributions. Example: Naming a lecture hall after a donor who contributes $500,000. Practical application: Develop tiered incentive structures aligned with fundraising goals. Challenges: Ensuring incentives do not appear transactional and maintaining equity among donors.
Interest‑Bearing Gift #
Interest‑Bearing Gift
Definition #
A donation placed in an investment vehicle that generates ongoing income for the organization while preserving the principal. Example: A $2 million endowment yielding 4% annually to fund a research program. Practical application: Establish clear spending policies (e.G., 4‑5% Of market value) to sustain the gift. Challenges: Market volatility, inflation erosion, and donor expectations for immediate impact.
Legacy Society #
Legacy Society
Definition #
A program that honors donors who have included the organization in their estate plans, often offering special communications and events. Example: A university’s “Friends of the Future” society invites bequest donors to an annual gala. Practical application: Provide legacy societies with exclusive updates on long‑term projects. Challenges: Keeping members engaged without direct financial contributions and measuring the program’s influence on actual bequests.
Matching Gift #
Matching Gift
Definition #
A donation made by a third party (often an employer) that matches the donor’s contribution, effectively doubling the impact. Example: A company matches employee donations to a charity up to $2,000 per employee per year. Practical application: Offer easy online tools for donors to claim matches. Challenges: Verifying eligibility, managing multiple corporate partners, and handling delayed match processing.
Major Gift #
Major Gift
Definition #
A significant donation, typically defined by the organization’s fundraising thresholds (often $10,000 or higher), that can fund programs, capital projects, or endowments. Example: A philanthropist gifts $1 million to establish a new research institute. Practical application: Assign a dedicated major‑gift officer to build deep relationships with high‑capacity prospects. Challenges: Long sales cycles, complex negotiations, and donor fatigue among high‑net‑worth individuals.
Major‑Gift Officer (MGO) #
Major‑Gift Officer (MGO)
Definition #
A fundraising professional tasked with identifying, cultivating, soliciting, and stewarding major donors. Example: An MGO spends 60 % of their time meeting with prospective donors and 30 % on proposal development. Practical application: Provide MGOs with robust data analytics and training on donor psychology. Challenges: Balancing a limited portfolio of prospects with ambitious revenue goals and managing high‑stakes negotiations.
Multi‑Year Gift #
Multi‑Year Gift
Definition #
A commitment to give a specified amount over several years, often structured as annual installments. Example: A donor pledges $250,000 to be paid in equal $50,000 installments over five years. Practical application: Record each installment as a separate revenue line for accurate budgeting. Challenges: Ensuring donor follow‑through, handling changes in donor circumstances, and aligning multi‑year cash flow with program timelines.
Planned Giving #
Planned Giving
Definition #
A suite of philanthropic options that allow donors to arrange gifts that will be realized in the future, often through wills, trusts, or retirement assets. Example: A donor designates a portion of their retirement account to a charity via a charitable remainder trust. Practical application: Offer educational seminars on tax‑advantaged giving vehicles. Challenges: Long lead times, complex legal structures, and the need for specialized staff expertise.
Planned Giving Counselor #
Planned Giving Counselor
Definition #
A professional who assists donors in structuring future gifts, ensuring alignment with financial goals and charitable intentions. Example: A counselor helps a client set up a charitable lead trust that benefits a university for ten years. Practical application: Build referral networks with estate attorneys and wealth managers. Challenges: Maintaining regulatory compliance, managing conflicts of interest, and communicating long‑term benefits to donors.
Planned Gift #
Planned Gift
Definition #
Any donation arranged to be realized after the donor’s death or at a future date, including bequests, charitable remainder trusts, and life‑income gifts. Example: A donor creates a charitable remainder annuity trust that provides them income for life, then transfers the remainder to a museum. Practical application: Provide clear documentation and tax receipt for each planned gift type. Challenges: Complex tax implications, donor uncertainty about future financial circumstances, and the need for long‑term organizational capacity.
Prospect Research #
Prospect Research
Definition #
The systematic gathering and analysis of information about potential donors to assess capacity, affinity, and likelihood to give. Example: Using a wealth‑screening service to identify a local business owner with a $5 million net worth. Practical application: Integrate research findings into a donor relationship management system for targeted outreach. Challenges: Data accuracy, privacy concerns, and avoiding over‑reliance on financial metrics without considering philanthropic motivations.
Recognition Society #
Recognition Society
Definition #
An exclusive group that acknowledges donors who have contributed above a certain threshold, often with special benefits and public acknowledgment. Example: A museum’s “Patrons Circle” recognizes donors who give $250,000 or more with a plaque and private tours. Practical application: Create tiered societies that correspond to different gift levels. Challenges: Managing donor expectations for exclusivity and ensuring the society’s benefits align with the organization’s mission.
Restricted Gift #
Restricted Gift
Definition #
A contribution that the donor earmarks for a specific purpose, program, or time frame, limiting the organization’s discretion on its use. Example: A donor specifies that a $100,000 gift must fund only the youth outreach program for the next two years. Practical application: Track restricted funds separately in accounting software and report back to donors on usage. Challenges: Balancing restricted and unrestricted cash flow, and potential impact on flexibility for emerging needs.
Revenue Forecasting #
Revenue Forecasting
Definition #
The process of projecting future donation income based on historical data, donor pipelines, and economic trends. Example: Using a statistical model to predict a 12 % increase in major gifts for the upcoming fiscal year. Practical application: Align fundraising targets with program budgets to ensure financial sustainability. Challenges: Accounting for unpredictable donor behavior, external economic shocks, and changes in tax policy.
Risk Management (Fundraising) #
Risk Management (Fundraising)
Definition #
Identifying, assessing, and mitigating potential threats to the organization’s financial health and reputation related to fundraising activities. Example: Conducting due‑diligence on a large corporate donation to ensure no conflict of interest. Practical application: Develop a risk‑assessment matrix for each major gift prospect. Challenges: Balancing risk aversion with the need for high‑value gifts and staying current with evolving regulations.
Segmented Appeal #
Segmented Appeal
Definition #
Tailoring fundraising communications to distinct donor groups based on factors like giving history, capacity, and interests. Example: Sending a personalized letter to mid‑level donors highlighting a new program that aligns with their past interests. Practical application: Use CRM analytics to create segments and automate customized outreach. Challenges: Maintaining accurate segmentation data and avoiding over‑generalization that dilutes personalization.
Senior Donor #
Senior Donor
Definition #
An older individual, typically over 60, who has significant wealth and a heightened interest in estate planning and legacy creation. Example: A retired executive who establishes a charitable remainder trust to support a health clinic. Practical application: Offer one‑on‑one meetings focused on legacy goals and tax benefits. Challenges: Addressing health‑related concerns, ensuring the donor’s wishes are respected over time, and navigating inter‑generational family dynamics.
Stewardship Plan #
Stewardship Plan
Definition #
A strategic roadmap outlining how an organization will maintain and deepen relationships with donors after a gift is received. Example: A five‑year stewardship plan that includes annual impact reports, site visits, and exclusive events for major donors. Practical application: Assign stewardship responsibilities to specific staff members and monitor adherence. Challenges: Coordinating across departments, measuring intangible benefits, and adapting the plan as donor preferences evolve.
Strategic Fundraising #
Strategic Fundraising
Definition #
An approach that aligns fundraising initiatives with the organization’s long‑term strategic goals, ensuring resources are directed where they have the greatest impact. Example: Launching a capital campaign to build a new research facility that supports the nonprofit’s five‑year strategic plan. Practical application: Conduct a SWOT analysis to identify fundraising priorities. Challenges: Balancing short‑term cash needs with long‑term strategic investments and securing board buy‑in.
Tax‑Deductible Gift #
Tax‑Deductible Gift
Definition #
A donation that qualifies for a deduction on the donor’s tax return, subject to IRS rules and contribution limits. Example: A donor claims a $20,000 cash donation on Schedule A, reducing taxable income. Practical application: Provide donors with accurate receipts that include the organization’s EIN and a description of the gift. Challenges: Staying current with changing tax laws and ensuring proper documentation for large gifts.
Unrestricted Gift #
Unrestricted Gift
Definition #
A donation without donor‑imposed constraints, allowing the organization to allocate funds where they are most needed. Example: A $50,000 unrestricted gift used to cover staff salaries and program overhead. Practical application: Highlight the importance of unrestricted gifts in donor communications to emphasize operational stability. Challenges: Convincing donors of the value of unrestricted giving when they prefer visible, program‑specific outcomes.
Volunteer Gift #
Volunteer Gift
Definition #
The donation of time, expertise, or professional services rather than monetary funds. Example: An accountant provides pro‑bono bookkeeping services valued at $10,000. Practical application: Recognize volunteer gifts with certificates and public acknowledgment. Challenges: Valuing volunteer time accurately and managing liability for professional services.
Wealth Screening #
Wealth Screening
Definition #
A process that uses publicly available financial data to estimate a household’s giving capacity. Example: Using a wealth‑screening tool to identify a potential donor with an estimated net worth of $8 million. Practical application: Prioritize outreach to high‑capacity prospects identified through screening. Challenges: Data privacy concerns, potential inaccuracies, and the risk of focusing solely on wealth without assessing philanthropic interest.
Yield (Investment Return) #
Yield (Investment Return)
Definition #
The annual percentage return generated by an investment, often used to assess the sustainability of endowment or income‑producing gifts. Example: An endowment achieving a 5 % yield produces $100,000 in annual operating support. Practical application: Set realistic yield expectations based on asset allocation and market conditions. Challenges: Market volatility, inflation pressure, and donor expectations for stable returns.
Zero‑Based Budgeting (Fundraising) #
Zero‑Based Budgeting (Fundraising)
Definition #
A budgeting method where each expense must be justified for each new period, starting from a “zero” base rather than building on previous budgets. Example: A development department re‑evaluates all major‑gift staff salaries and travel costs before the new fiscal year. Practical application: Use zero‑based budgeting to identify inefficiencies and reallocate resources to high‑impact activities. Challenges: Time‑intensive process and potential resistance from staff accustomed to incremental budgeting.