I’ve reviewed a lot of major gift portfolios lately, and I’ve seen too many whose growth is stagnant. My analysis has shown many instances of revenue over a four-year period with losses of up to 10-15%, or gains only in the 1-7% range. That’s less than 2% growth a year!
No wonder major gift managers and non-profit leaders are nervous about revenue. As you know, the major gift program is about NET revenue… the same NET revenue that allows non-profits to carry out their programs that are changing the world.
If the major gift program is not growing, the non-profit cannot grow and carry out its mission.
So why are your donor portfolios and programs stalled out? We’ve noticed several problems that I want to share with you.
When Richard and I dive deeper into these portfolios, we notice that there are many donors who have not given in the last 48+ months. We start asking MGOs why they are carrying donors in their portfolio who haven’t given. Their basic answer is, “well, that person was a big donor years ago, and I’m just hoping they come back to us.”
Okay… not a good answer. But I get it. Many MGOs I’ve worked with have this mentality: “if I can keep this deeply-lapsed donor on my portfolio and they finally give a gift, I can get credit for it and I’ll make my revenue goals.”
The problem is that a donor who hasn’t given in four years is not very likely to give again – and they are taking up room that keeps other donors (who do have capacity and inclination) from being cultivated by you… and giving you big gifts.
So that is one problem: You’re not culling your portfolio once or twice a year to weed out donors who just aren’t major donors.
We also see far too many donors in major donor portfolios who give the same amount every year. Now, it’s great that they continue to give year after year, but why are these donors staying at the same level? Here’s what we have found over the years:
- MGOs get it in their heads that the donor can’t give any more than that, so they don’t bother asking for more. This is called negative self-talk.
- MGOs rely on these donors to give through a mail or email appeal, and they are not soliciting the donor face-to-face.
- MGOs are happy that the donor gives their “annual” gift, and they don’t want to upset the donor and risk not getting a gift by asking for more.
- There is an institutional belief that you don’t have to ask a donor for a gift, and if you do “all the right things,” a donor will give on their own without your having to ask.
This problem, in a nutshell, is: Being complacent and not proactively growing the value of individual donors in a portfolio.
Here is one other reason we’re seeing no growth in portfolios: MGOs are not challenging donors to give transformational gifts. In every major gift file that Richard and I have analyzed, there are at least 2-3 donors that could make a high six- or seven-figure gift IF we really built a plan around those donors and worked that plan hard over the next 12-18 months.
But many of you are not doing it. Instead, you’re focusing your time on donors who have way less capacity, or you’re distracted by something that is NOT your own portfolio (events, admin, etc.).
No wonder we are not seeing growth in major gift programs! To recap, we have three major problems happening:
- Portfolios are not being culled regularly, keeping out new donors who have higher capacity and propensity to give.
- MGOs are not challenging donors to give more, so they continue to give the same or similar amounts every year.
- MGOs are not identifying those donors that can make a transformational gift, developing a plan for them and focusing a majority of their time and energy on them.
If you’re actually cultivating your portfolio correctly – meaning the opposite of these three reasons for no growth – then there is no reason that you shouldn’t see double-digit growth each year in your donor portfolios. What will happen is that your revenue per donor will go up dramatically, donor and donor value retention will be in the 90-95% range, and you’ll see returns on your organization’s investment in you and your program move to 8:1 or 10:1 – or even higher.
If you want to see your portfolio revenue increase dramatically year over year, focusing on these three areas will help you achieve your goal. This is what growing a dynamic major gift portfolio is all about.