Nowadays, planned gifts and major gifts job postings are often combined, and in fact there are fewer purely planned giving positions being created. More blended organizational structures and an increased focus on the needs and interests of individual donors, along with a growing philosophical view that there is no real distinction between the two, have led to a breakdown of the traditional structures. This trend is strengthened by the lack of skilled professionals in both specialties, and growing interest in the field among the smaller, grass-roots and middle-class charities that can’t afford more than one position.

Major Gifts is the sales model, highlighted by the use of donor research, professional solicitations and community networks, as best exemplified in the capital campaign. A great model for volunteer involvement, and offering proven effectiveness at raising large sums, the capital campaign is a good use of resources and an ideal vehicle for articulating your case. The problems lie in its cyclical, boom/bust nature, extreme dependence on volunteers, inadequate stewardship, and vulnerability to become confrontational. In addition, it focuses largely on corporations and foundations and is not a good vehicle for endowment building. The results, in the form of money in the door, are easy to measure.

Planned Gifts focus on planning, marketing backup, donor contact, technical knowledge, and long-term stewardship. Typically staff-driven and reactive, it generally involves a high level of one-on-one contact with middle-class donors, who often self-select. Here we focus on the donor’s needs and interests, work extensively with outside specialist advisors, think in terms of endowments and legacy gifts out of assets, and measure success in forms of expectancies. Unfortunately, it can become obsessively technical and lose sight of the importance of current giving. The huge opportunities offered by wealthy donors, in addition, can be missed due to the lack of an appropriate strategy.

The myth of difference

Major gifts are generally defined as large current gifts from wealthy individuals, often pledged, and typically including gifts from corporations and foundations. Planned giving, on the other hand, tends to be structured deferred gifts from older, middle-class individuals. This paradigm has an effect on the culture of the two areas. In major gifts, you get access to rich and powerful people, which makes it sexier. But in fact, they’re all wonderful donors, and all deserve equal respect.

Relationship fundraising (moves management) is putting the donor into a more complex relationship with the charity, and the managers of permanent development offices are wondering what to do when you don’t have a campaign. The increased emphasis on accountability is resulting in more and better stewardship of donors, and of course ongoing fundraising makes us all more accountable. Finally, the growing trend to cross-disciplinary teams as compared to the traditional functional silo approach is blending the focus.

Today’s most influential theory, relationship fundraising is a sales model for fundraising. We refer to it as circular but often it is linear, and it too is driving the convergence to blending planned giving and major gifts by focusing on the donor. In fact, while the two approaches are indeed different in many respects (see Table, Major Gifts & Planned Giving: The Differences), they are also vastly similar, both generally involving:

• large donations,
• capital/assets,
• personal relationships,
• on-going stewardship,
• proposals with illustrations,
• similar target marketing, and
• careful planning to secure the commitments.

 

With the blended structure, both gift planners and major gift officers end up with reduced levels of both authority and recognized expertise, so the challenge is to develop combined models which help donors make their maximum appropriate contribution. To do this, we must first focus on donor needs rather than management structures, minimize internal conflict, and draw on the strengths of both approaches. There are, in fact, many advantages to a merged program model that has as its goal, to help donors make their maximum appropriate contribution.

The Gift Planning model

“The middle-class model” makes gift planning dominant in word and deed; is donor, rather than charity focused; involves a planning process central to the relationship with donors; focuses on both the middle-class and the rich; works with current and deferred goals; and uses a double-counting system. It is also a contact manager approach, involving highly co-ordinated programs and largely staff-trained cross-disciplinary work teams, an ongoing development model that is not just campaign-focused, and a broad philosophy that recognizes that major gifts can’t contain planned giving. But does it address the real needs of the charity, rather than the donor? Is cross-training of staff a realistic possibility? Is there sufficient urgency to close gifts, and what is the role of volunteers?

The challenges of the combined program

The core activities are common, but the disciplines are still different. They share goals, need to meet and work together, and depend on administrative systems that reward donor contact. It’s also a big shop model, uses the double-counting system, cross training, both middle class and high net-worth portfolios, and works on both deferred and current gifts. It will offer different products and use different processes for donors of different levels of wealth.

We need to recognize the very real differences between planned giving and major gifts, and the fact that the convergence of the two approaches is definitely not simple. Major gifts officers will have to learn to think long-term, and extensive cross-training of staff will be an essential component in any attempt to launch a combined program. Finally, success will demand that you focus on the donor’s needs, and develop local solutions in the context of a clear understanding of your charity’s culture.

Major Gifts & Planned Giving: The Differences

Major Gifts
Individuals/Foundations/Corporations
Sales
Charity Selects Gift
Donors are wealthy
Current giving
A social gift
No advisors involved
Volunteer-driven
Institution’s timeline
Wealth-defined market
No estate review involved
Prospect research
Linear focus on getting to the Ask
Charity first, then the donor

Planned Giving
Individuals
Marketing & Sales
Donor Selects Gift
Essentially middle-class
Current & deferred
A personal gift
Advisors
Staff-driven, often
Donor’s timeline
Age-defined market
In-depth estate review/plan
Invisible to research
Open-ended process
Donor first, then the charity

 

Based on a presentation to the Seventh National Conference of the Canadian Association of Gift Planners, in Ottawa, Ontario, May, 2000. Malcolm Burrows is Director, Gift Planning at The Hospital for Sick Children Foundation in Toronto, and a national board member of the CAGP. For more information, call 416/813-8029, fax 416/813-8142, or email malcolm.burrows@sickkids.on.ca.