Over the years we have audited over a hundred different major gift programs. Almost all of them suck. “Do you really have to use that language, Jeff?” Yes, yes I do. It’s not that these programs are bad or they need a little tweak here and there, it’s that they are just plain awful. So, the word, “sucks” really fits.
I’ve come up with 10 reasons why this is the case. Now, there are more than 10 and over the course of time I’m sure we’ll get into them all. But, to be pithy and to get people to read my blog I’m coming up with ten.
Okay, I’m going to start with #1. Yeah, I know everyone does this countdown thing, but I’m not David Letterman and all of these “reasons” carry the same weight so just hang in there with me.
#1-Development Directors review the WRONG criteria for success.
When we ask a development director how they think their program is performing we usually get an answer like this: “Well, four out of our six major gift officers made their goals this year. It’s not perfect, but I think we’re doing pretty well.”
Then we ask them this: “What is your caseload attrition rate and what is their value attrition year to year.”
Blank stares, sweat starting to bead up on brow, face turning RED…
Most major gift programs we have evaluated are judged on whether they made their overall goal each year. That’s ONE criteria. However, we find that seems to be the ONLY criteria. When that is the only criteria we find it’s MASKING some bad donor behavior.
See the illustration below to show my point:
If you JUST look at the bottom line numbers you see that overall the file grew by 21%. Pretty good huh? But the problem is that this revenue came from NEW sources. Look at the current caseload. It decreased in value by 49%. These are current donors who failed to give a gift from one year to the next. What happened?
What we find is that donors are not renewing their giving year to year by as much as 40-60% each year. This tells us there is a cultivation problem.
Think about it.
In a healthy direct response program with low-end donors those attrition rates would not be acceptable. But, in a major gift program it’s outrageously sad. Here are good folks who have made a significant investment in your organization and for some reason they failed to continue that investment.
More often than not it’s because someone is NOT paying attention to these donors.
So, start evaluating your major gift program by first looking at how your donors are giving year to year. Overall, we want to see as little donor attrition as possible and value actually increasing year to year. Not through new donors coming in the door, but by current donors increasing their investment in your organization.
#2 is coming soon and I bet you can’t wait!! Neither can I.
Series Details: 10 Reasons Why Most Major Gift Programs Suck!
Intro and #1: Development Directors review the WRONG criteria for success.
Reason #2: Non-Profits do not treat their donors as partners, but as sources of cash.
Reason #3: The Relationship between Development and Program is Broken
Reason #4: Wrong People Hired as Major Gift Officers
Reason #5: Lack of Management and Accountability
Reason #6: No Marketing Plan for EACH Donor on the Caseload
Reason #7: We Don’t Take the Time to Understand a Donor’s Passion
Reason #8: Most Non-Profits are NOT donor-centered.
Reason #9: We Don’t Tell Donors How They Made a Difference.
Reason #10: Money Becomes the Objective, not the Result.
Great blogs!!! Thank you so much.
Great post. Your second measure got me thinking – how common is it for major donors to alternate their charities of choice?
That’s a good question. The honest answer is, “I have no idea.” However, we do know that your charity is not the only one donors give to. In my experience with major donors many have 3-4 they hold very dear to their hearts. Then have a lot of others they give smaller amounts to. If you can be in a major donor’s top three charities, you’re doing a good job engaging them and making them feel like they are making a difference with your organization. Remember, the more you make your donor feel like a true partner the more they will continue to make you their charity of choice. Listen, most non-profits do such a bad job at this that if you can provide that real partnership, you will always have the advantage.
Can you explain to me what exactly is meant by the following and how you would go about calculating it?
“What is your caseload attrition rate and what is their value attrition year to year.”
I’m new to the business and have a lot to learn!
I found your top 10 to be very helpful – thanks for writing!
Hi Jennifer. Yes, i can tell you how to calculate this. Either you can select a specific caseload of donors or select all donors that fit your major donor criteria. Then track those donors from any point in time ( I like to go back at least 4 years) and determine who is still an active donor and how much they give year to year. For example, if you have a donor who gave in 2007, $10,000. You then track that donors giving behavior until present day. If they have stopped giving that is called donor attrition. Attrition value is the amount they gave. So, let’s say they gave in 2008, $5,000. That means you lost $5,000 in attrition value. If you do this with all your donors you will be able to track how many people each year stop giving (attrition) and much money have you lost year to year (attrition value).
That is most helpful! Thank you for explaining!
Excellent observation…..we often call this LYBUNTS (last year gave, but not yet renewed). It is the one report I always monitor closely.