One of the main problems that major gifts programs face is a poorly thought-out organizational structure. This is caused by an authority figure not thinking clearly about the purpose of the various fundraising, marketing and communications functions.
Here’s what I mean.
A nonprofit needs to have the following fundraising activities operating and fully functional if they are to succeed in securing, keeping and upgrading donors and maintaining a healthy brand in the marketplace:
- Fundraising strategies directed to individuals of all types. This includes all types of donor acquisition, retention and upgrading programs, using various media, pledge and membership programs, affinity group programs, mid-level, major and planned giving programs – anything to do with individuals with emphasis on these three words: acquisition, retention and upgrading.
- Fundraising strategies directed to institutions of all types. This includes government (federal, state, local), corporations and businesses, foundations, religious institutions, other non-profits, etc.
- Communications, public relations, marketing & events. These are all the activities that are related to brand promotion and maintenance, getting the word out about what you do and why, positioning against competitors (yes, you need to do this – and it IS a positive thing, not being adversarial), causing and creating community in the marketplace, defending against bad press or events, influencing, etc.
When you think about this at a very high level it looks like this:
- All the fundraising activities (#1 and #2 above) have only one objective: to further the cause of the organization by securing resources. Period. Emphasis on securing resources. Please keep this clearly in mind. This is 80% of the entire fundraising, communication and marketing effort.
- All the communications, public relations, marketing and events activities (#3 above) have only one objective: to help the organization by minding the brand. Period. Nothing else. This is 20% of the effort.
Notice that the fundraising activities are outward facing – to prospective and current donors – and the communication, public relations, marketing and events activities are all inward facing toward the organization. Now, hold on. Yes, the communication, public relations and marketing functions are targeting the external public as well as donors, etc. But their main objective is to promote and maintain the brand – an organizational value. There is a lot of nuance to this thought which I do not have time to develop here.
Also notice that we put events in the inward facing group, not the fundraising group. And this will cause heartburn in some die-hard events persons. I understand. Jeff and I are happy to explain ourselves. Plus, we have written quite a bit about events, so please go to those articles to get a fuller explanation of our thinking on this subject.
But the simple explanation (which, of course, has far more nuance and detail than I can explain here) is this. Most events, with few exceptions, are about causing awareness and enthusiasm for the cause – a public relations and marketing activity – and are quite ineffective at raising money at an acceptable return on investment, or securing long-term donors.
Many event organizers do not include all the costs of the event, including staff labor; and, oftentimes, some of the revenue is already pledged through other strategies, inflating the revenue the event organizer reports was raised. For instance, a major donor, through the work of the MGO, has agreed to give $100,000 and the MGO is asked by the event organizer to have that gift given at the event.
Bottom line: if you include all the costs and subtract all the revenue already secured through other strategies, most events are breakeven, which is good for a marketing or public relations program. But it is not a solid net revenue generator. Nor is it a solid donor acquisition strategy. Most event attendees go for the event and its benefits, not because they fundamentally want a long-term relationship with the organization whose cause they love.
Jeff and I know this will be hard for some folks to hear. But it is a fact. And that’s why we have put events in the non-fundraising category, even though it does raise funds. We think that if more CEOs of nonprofits understood this they would be less demanding of the function.
I have written all of this to make this one point: major gifts needs to be in a healthy, fully-functional development, marketing, communications and public relations context IF it is to function as it should. (Tweet it!) So before you try to “fix” major gifts, fix the environment and the context it is in.
Coming up in this series is more discussion of how the organizational and its structure should operate. It will be fun.
Read the whole series on MG Organizational Structure: