Ignorance in Major Gifts and What to Do About It

Major gift programs (next to planned gifts) is the top net revenue generator in most non-profits, so it always amazes Jeff and me how many managers and leaders can come up with statements like this:

  • “Why are you taking good direct mail donors and putting them on caseloads? It doesn’t make sense to me AND it hurts direct mail.”
  • “We need some big gifts now, and if those MGOs don’t start delivering them we many have to close the program down.”
  • “I don’t understand why it takes so much time to get the major gift program going. These donors love us. What’s the problem?”
  • “Look, I don’t care that we don’t have a lot of donors in that area – our organization needs to be represented in that metro area, so plan to put a MGO there.”
  • “What do you mean the MGO has nothing to present to donors? She knows our organization. She knows the mission. What’s the problem?”
  • “We don’t need a bunch of management in major gifts! What we need is those MGOs out in the field talking to donors!”

All of these statements – all of them – are statements we have actually heard and continue to hear every week. And they all have one thing in common: ignorance.

This is ignorance about how major gifts works and how it fits into the fundraising strategy of the organization. And this ignorance falls into some very familiar categories:

  1. Lack of understanding about how major gifts fits into the overall fundraising strategy of the organization. Major and planned gifts are the “end game” in a carefully managed donor acquisition and cultivation pipeline. The reason an organization acquires a donor (usually at a loss) is because that donor can then be cultivated (direct marketing program) and eventually moved into a high-touch major gift program where the ROI is substantially better and the net revenue contribution to the organization is greater. Major gifts is not some isolated activity. It is part of a carefully-managed strategic fundraising plan. And, yes, donors will move from one media strategy (direct mail) to major gifts, and that will change the numbers. But isn’t that what we are trying to do? We are trying to migrate the donors up in their giving. Many managers and leaders do not understand this.
  2. Not accepting that major gifts takes time. Everyone knows that good relationships take time. One of the better MGOs I have known and been privileged to work with just wrote me last week about a caseload donor she had been nurturing for 8 years who just gave $50 million cash to her organization! $50 million!! It took time. Another MGO we worked with had nurtured a relationship for 4 years, and the donor gave $4 million. It takes time. I am always amazed how managers and leaders think this major gift thing is like going to a slot machine and pulling the handle and hitting the jackpot. It just does not happen that way.
  3. Mistaking MGOs for Public Relations reps. I have never heard anything crazier than a highly intelligent and competent CEO looking me straight in the eyes and telling me that a MGO needs to be placed in a metro area where the organization has few donors. Why? “Because we need representation there!” OK. So we suggest the nonprofit puts a PR person there, not a MGO. Nope. They don’t want to do it because “we may be able to raise some money along the way.” Goodness. Now here is some fog on the brain.
  4. Believing that MGO general knowledge of the organization is all they need to be effective with donors. Whoa. That is like telling a salesperson that all she needs to know about the car she is selling is that it has four wheels and drives. Really? Do you really think your MGOs can be effective with just general knowledge about your organization? It’s not gonna happen. MGOs need well thought out donor offers, at different price points, to effectively secure donor support.
  5. Holding to a belief that major gifts and MGOs do not need management. This one just amazes Jeff and me. This is like telling any company that is selling anything that they do not need a sales manager. Everyone knows that this is not true! Sales management exists not because salespeople are stupid and lazy. Sales management exists because good planning, focus, inspiration, encouragement and accountability is what helps a sales person (MGO) be successful. This one really baffles me. We know from experience over many decades that MGO teams that are managed are more successful than ones that aren’t. I know of one situation where the average caseload value of each of the 20 MGOs in the organization was $500,000. Veritus Group, in two years, managed that average up to $850,000 per MGO. The organization, with our help, put in their own managers to take our place – this was good. A new leader came in and “saved money” by removing those managers. And now the average caseload value is going back down. Oh yeah, they are going to save a lot of money! Or so they think. The net revenue is dropping like a rock. I do not understand this kind of thinking.

Well, what can you do about this if you are in a situation where ignorance is blooming?

First of all, be patient. We have discovered that major gifts, although it has been around awhile, is not generally understood. Many of the consultants and authors out there who claim to be major gifts experts just aren’t. They think it is about the art of asking, when it is so much more than that. So it is not surprising that major gifts and how it works are misunderstood.

But here is the good news. Jeff and I and our team have been surprised that something can be done. Although many authority figures just do not know about major gifts, the fact is that they would like to know. I have been in a number of situations where, when you explain how major gifts works (that it takes time, that management is needed, etc.), the authority figure jumps on board.

So if you find ignorance in your organization, do what several of our clients have done – organize workshops and seminars to educate. It really does work. Education is a good thing.

Spend time educating those around you. And after that education, if ignorance still persists, you might consider looking for a different place to work.

Richard

PS — Managers in this position might consider our new Major Gift Academy course, “The Economics of Major Gift Fundraising.” Check it out!

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