Going After the Big Fish
Manage Staff Time Wisely: Typically, 20% of Gifts = 80% of Money Raised
By Steven A. Reed
Unless you are running a national or international charity with a huge and highly sophisticated direct-marketing program, chances are your major gifts program offers you the most leverage for fundraising success. But high-performance major gifts fundraising requires processes that are highly effective and eliminate wasted effort. Here are a few basic steps.
- Good development officers are truly a scarce resource, and usually among the highest-paid in the fundraising organization. They should focus on cultivating prospects, not on making database entries.
- Manage your organization’s mix. You need a complete pyramid of fundraising strategies and methods for long-term success, but maximizing your major gifts program will most significantly increase your ROI. A mark of a high-performing operation is a revenue mix of about 80% major gifts, which in number make up about 20% of total gifts.
- Use high-cost, scarce resources to do only high-value work. Good development officers are truly a scarce resource, and usually among the highest-paid in the fundraising organization. They should focus on cultivating prospects, not on making database entries. Can a clerical staffer input the data instead? What about things such as routine reporting, other paperwork and thank-you letters? Or routine stewardship activities? What can you do to increase the number of true prospect-facing meetings per week?
- Consolidate portfolios and pipelines. Major gift fundraisers — like surgeons, fighter pilots and the iconic American “cowboy” — tend not to be natural team players, but will respond to ways their work can be structured to make them more successful. The traditional 100- to 150-person or family portfolio not only encourages a “my prospect” and “my donor” mindset, it spreads your MGOs’ attentions across a wide spectrum of situations, relationship objectives and activities. Lean principles that translate into focused portfolios and one centrally managed pipeline enable wholesale gains in productivity.
- Define your processes for relationship development from first introduction through gift agreement and into stewardship. In Lean lingo this is called mapping your value stream. Essentially, you block out on paper all the key steps involved in the major gift process. Then go back and identify all the activities that take place between the key steps. Pinpoint the steps and activities that do not bring actual value to the process. Can any of these be eliminated? Automated? Reassigned?
- Develop stage-gate criteria to ensure that development officers spend time on the most likely prospects. Stages are the various phases in a process, and the gates are review points between each stage, where tough decisions are made about proceeding, reworking or stopping. If each gate has specific criteria, you can clearly assess when all criteria have been met — and only then move to the next stage. For each prospect you move through specified stages and gates before reaching the “ask” — at which point the prospect is well-primed, and asking is only a formality.
- Develop high-volume, point-of-entry activities and programs to create abundant prospect flow into the “pipeline.” How do you find enough prospects? For example, in one model the initial connector, often a board member, brings people to interesting events where they learn about new initiatives or treatment advances. Some become qualified prospects and move through the process. A good metric is, for every 10 people brought in by the initial connector, one gives a gift at the target level. (Typically, one or two more gifts at lesser levels also result.) These connects are critical, because staff people generally do not move in the social and business circles where potential major donors are found.
- Set multiple process measures, with emphasis on cycle time. How many prospecting events will you hold each month? How many connections should you make at each event? How many prospects should you be cultivating at each stage? You must establish criteria to let you know how you’re doing, as well as a system for alerting you when a particular measure is or isn’t being met. For example, you can use a “dashboard” system where green means you’re on track, yellow is the continuous improvement zone, and red calls for immediate attention because you’re seriously behind where you need to be.
- Measure early, measure often and use metrics that correlate with success. Instead of simply measuring things at the end, such as how much money was raised or the total sum each development officer brought in, use measures that help you see at key points whether you are on track for a positive outcome. Not only will you get what you measure, you will build a reliable forecasting system. Your CFO will love you. But beware metrics that may correlate with success, but are not measuring those things that cause success. This article links to “Choose Your Measures Wisely” article. Read “Choose Your Measures Wisely.”
- Maintain a constant effort to eliminate out-of-bounds process variance. Create your “way” of fundraising, so you have a tried-and-true baseline process that is ingrained in your culture. In other words, if you have four — or 14 — gift officers, you will still have one consistent way your organization goes about acquiring gifts, instead of four different ways, and numerous variations within each. That one way should allow for a clearly limited degree of variance to allow your front-line people to apply their experience and creativity to specific situations. You can then continuously improve that one way.
Instead of simply measuring things at the end, such as how much money was raised or the total sum each development officer brought in, use measures that help you see at key points whether you are on track for a positive outcome.