The non-profit industrial complex is broken. Yes, Richard and I could write another book just on that one sentence. There are many reasons why it’s broken, but I’m not going to write a book-long blog here, so I’ll concentrate on one aspect of its brokenness: the failure of many non-profit leaders to value management. And, specifically, the over-reliance on KPIs (key performance indicators) to evaluate major gift fundraisers so that leaders can avoid investing in management.
The origin of this failure goes all the way back to why a non-profit is created in the first place. To do good where there is a problem to solve. Somebody determines there is a problem, they have a solution, and they have the passion to fix it. On the surface, that’s all good and noble stuff.
It’s all about the mission when a non-profit starts out. A few people rally around it, start funding it, and it gets going. The problem is that most non-profits, as it starts to grow, never realize that the staff carrying out the “mission” and the donors funding it ARE actually also part of that mission.
So, staff and donors become secondary to “the mission” in the eyes of leadership and the board. You know all the problems that come out of this. Burnout of staff, donors treated like ATMs, etc. The list gets long.
But the one area I’m focusing on in this blog is the lack of management, and specifically the use of ridiculous KPI’s to make up for that lack of management. And this is all symptomatic of the failure of non-profit leaders to see staff and donors as part of the mission. The staff and donors have become a means to an end. Let me explain what I mean by this.
When we conduct our donor assessment for non-profits and see value attrition in the 40-60% range year over year, it’s almost 100% inevitable that the non-profit is not properly managing their frontline fundraising staff.
Here’s what it typically looks like:
- The manager has their own full-time caseload, and/or the manager was the non-profit’s most successful fundraiser who was promoted to manager so that person could make more money or fill the role. As Richard would say, “it’s a total disaster.”
- There are sporadic meetings (or really none) that managers set up with their fundraisers to talk strategy and keep them accountable and focused.
- There are no individual donor goals or monthly communication plans. In other words, there is no structure.
- However, there are KPI’s designed by someone long ago because they that thought that if a fundraiser would just meet these metrics, it would show leadership that they are working hard and would raise a bunch of money.
Today, we see the majority of non-profits, especially health systems and higher ed, use a variety of key performance indicators to manage their fundraisers… rather than actually hire a manager who cares about the health, well-being, growth, and success of their frontline fundraisers.
Metrics like: the number of face-to-face visits, number of asks, number of gifts closed, number of prospects identified, number of discovery calls made, number of moves, etc.
When you rely on KPIs like these to manage a fundraiser rather than actually manage them, it’s almost certain that the fundraiser will try to figure out a way to “fudge” the numbers or to take superficial actions to make that metric.
And I don’t blame them!
For example, a major gift officer attends a gala and briefly talks to 10 donors in his portfolio. The MGO marks down that he had 10 face-to-face meetings. Technically, he saw 10 donors, but was it significant or meaningful? No way!
These metrics, without ongoing, real management, are not centered on building authentic relationships with donors, but are superficial, transactional, and anxiety-producing for the fundraiser.
Until non-profit leaders start to value and understand that staff and donors are part of the mission, we’re going to continue down this broken path paved with potholes.
Instead, what if non-profits had capable, staff-affirming, donor-focused management? It would look like this:
- A manager whose strength is developing people. They may not even have a background in fundraising.
- A manager who meets with you every week and keeps you focused and accountable to your goals and how you are developing relationships with donors.
- A manager who provides a structure where you have revenue goals for every donor, a strategic plan, and your entire caseload is tiered A-C.
- KPIs that are designed to build a relationship with a donor, such as tracking meaningful connections, stewardship calls, working the plan for each of your donors, and tracking donor and donor value retention along with overall revenue raised year over year.
- A manager who is there to support you, celebrate your success, guide you when there are challenges, and inspire you to build meaningful relationships with donors.
That, non-profit leaders, is what good management is like. When you include your staff and donor as part of your mission, and invest in high quality management and relationship-focused practices, your organization will make a bigger impact on the world.