Re-Release: What’s Holding You Back from Investing in Major Gifts?

Jeff Schreifels 

When leaders decide there’s no room in the budget for a major gift program, it’s counterproductive because they’re missing out on a huge revenue opportunity. An investment in major gifts can have an ROI of 10 to 1 or even more. So let’s say you’re convinced that the investment in major gifts is worth it. Now, how do you get a major gift program up and running, or make an existing program better? For today’s podcast episode, we’re re-releasing one of my all-time favorite episodes, where Richard and I outline the foundational elements you need to create a successful major gift program.

 

Recorded 

Welcome to the Nothing But Major Gifts podcast from Veritus Group featuring Richard Perry and Jeff Schreifels. Twice a month, we bring you the latest and best thinking about major gift fundraising so you can develop authentic relationships with your major donors. Here are your hosts, Richard and Jeff.

 

Jeff Schreifels 

Welcome to the podcast today. I have Richard Perry with me. And today, Richard, we’re going to talk about a topic that you have a lot of energy about. I mean, a lot of energy. I mean, I do too, but you really do.

 

Richard Perry 

Oh, I know.

 

Jeff Schreifels 

That’s all about investing and growing a major gift program.

 

Richard Perry 

Yeah, I do Jeff. And let’s just get this straight. If you’re listening right now, and what Jeff just said, that introduction, had you saying something like, “Okay, this is really going to be boring.”

 

Jeff Schreifels 

Hey! Wait a minute. Nothing we do is boring.

 

Richard Perry 

“This is going to be really boring. I’m not going to listen to it.” Okay, if that’s what you’re thinking, as you’re listening to Jeff and me right now, you just hang on a second. This might seem like old boring news, but it really isn’t. I mean, most organizations are busy worrying about mid-level programs right now, which is a great thing. But if you aren’t properly investing in a major gifts program, even if you technically already have one, you need to refocus on this vital fundraising program to make sure you’re maximizing your efforts. I mean, you really do.

 

Jeff Schreifels 

Well, and there’s another really big reason why you should be investing in major gifts. And the big one is, tons of revenue. I mean, just the other day, Richard, I was dealing with an organization that was generating about $5 million a year in contributions. Okay. And we did the analysis. And we showed the leadership that they could grow from that $5 million to $12 million dollars per year if they simply hired some major gift officers. And of course, work the Veritus Way. Two of them, actually. If they hired two major gift officers, and then work to qualify all those donors to give more. But, you know, there were a ton of donors that they didn’t qualify. If they properly cultivated them, they could get to $12 million.

 

Richard Perry 

Yep. So did they go for it?

 

Jeff Schreifels 

Of course not.

 

Richard Perry 

But why?

 

Jeff Schreifels 

You know why? Because the old guard managers in that organization, they just wouldn’t support it. All they did… they just felt like, it’s just going to take away from their budget, and what they really wanted to have funded.

 

Richard Perry 

Oh, you’re kidding.

 

Jeff Schreifels 

No. And it’s so frustrating. So listen to this: the organization could invest $250,000 a year in new major gift staffs and their operating costs. So for three years, that $750k. And for that investment, they would get back $7 million more, or a net of $6.25 million. Well, let’s just say $6 million, okay? But $6 million in net!

 

Richard Perry 

Wow! That just sounds like a no brainer to me. I’m telling you.

 

Jeff Schreifels 

I know! But all that the managers could see is the $250,000 investment per year taking away from some of their expense budgets. So they wouldn’t support it, even though it would have delivered way more cash flow to let them have even more budget. Isn’t that… I mean, it’s just crazy.

 

Richard Perry 

It really is. I mean, it’s crazy, but it’s not surprising. I mean, we see this all the time, Jeff. So there’s a situation where an organization has a major gift program, but they will not expand it to take advantage of the real revenue opportunity. I mean, it just happens all the time. Then there’s the organization that has a very robust direct response or annual giving/membership program that is gobbling up a great portion of the development budget. And the same dynamic applies. So internal managers are not supportive of investing in major gifts. I mean, that’s it.

 

Jeff Schreifels 

But doesn’t this all kind of boil down to a lack of leadership in these organizations? Where, you know, the top authority figure is just not managing as he or she should?

 

Richard Perry 

Well, it really does. And in all the cases we’ve seen, including the ones we’ve just talked about, it is the leader who is weak and ineffective. And I’m sorry, we just got to say it that way.

 

Jeff Schreifels 

You’ve got to call it out.

 

Richard Perry 

They either don’t understand how major gifts works, or that it can deliver an amazing ROI, which would solve many, if not all, of their revenue problems. They don’t understand that, or they just don’t know how to deal with the very strong and opinionated managers working for them. I mean, that’s another big reason.

 

Jeff Schreifels 

Or, even, you know, not being able to really understand how to talk about this with the board. And, you know, because a lot of times, these leaders get pressure from the board, saying we’re not going to spend any more, and they don’t know how to stick up for the program. You know, they don’t know how to talk to the board…

 

Richard Perry 

Exactly.

 

Jeff Schreifels 

To say, “Hey, no, we need this.” Well, I mean, all of that explains why leaders don’t invest in major gifts, which is pretty sad. But the point is, is that investing in major gifts, is actually one of the most profitable things a leader can do.

 

Richard Perry 

I mean, it really is, Jeff. We’ve shown it over and over again, where you get returns on investment of 8 to 1; 10 to 1; 30 to 1.

 

Jeff Schreifels 

Yeah.

 

Richard Perry 

I mean, it’s an absolute fact. And it’s so counterproductive to not invest in major gifts if it has the highest return on investment of all the fundraising strategies, with the exception maybe of planned giving.

 

Jeff Schreifels 

I know. Okay Richard, let’s talk briefly about what an organization needs to do to get a major gift program up and running, or make an existing program better. Because we have a list of what all those things are.

 

Richard Perry 

Well, we sure do. And it starts with having what we call a meritorious product. A meritorious product. Product sounds like a commercial term. But this is one of the most basic and often overlooked points in major gifts. Okay, so a major gift officer, like a good salesperson, needs to have a good product to sell. But a good product, “Program,” is not easy for many non-profit managers to deliver. I mean, we work with some of the largest non-profits in the country. And in them, we still encounter managers who say to their major gift officers, “We just get out there and tell those donors what we’re doing.” As if that’s all it takes. And the major gift officer kind of flails around saying general things, unable to present the donor with enough specifics on programs, outcomes, and costs. I mean, program is the fuel of a major gift engine. Without it, the major gift officer can’t succeed.

 

Jeff Schreifels 

Exactly. Another element of a successful major gift program is having a donor-centered culture. You know, we’ve written on this a lot. But donors need to be at the center of your mission and your work. And donors need to be partners, not sources of cash. They need to be valued and respected. And if you don’t have a donor-centered culture, it’s really going to be difficult to have a successful major gift program.

 

Richard Perry 

Yeah. And we’ve talked about this one a little bit already. But a successful major gift program needs a leadership culture that understands major gifts.

 

Jeff Schreifels 

Oh, God.

 

Richard Perry 

I mean, one of the core misunderstandings that leaders have about major gifts, is how much time it takes to get (A) get a major gift program started, and (B) to build a relationship with a major donor. I mean, yeah, we had one situation, Jeff, several months ago. And I think you remember this where the manager was trying to hurry up the development of a relationship with the donor, so that the ask could be made in time to reach a fiscal year-end goal. He said, like what? This is insane. You really can’t hurry up a relationship. I mean, try that in your marriage or your relationship to a significant other. I mean, go ahead. Try it. Or try it in your job. Try that anywhere and see what happens. It’ll get awfully messy and it’ll get really dirty really quick. And then you’ll see what your impatience and ulterior motives got you. It will get you nothing. And it’ll do damage. So, leaders who truly understand the nature of a relationship will value how major gifts needs time.

 

Jeff Schreifels 

I know. I just recently was talking to a board at a board retreat, virtually. And the ED, who thinks like this, is really good at thinking about major gifts, but the board isn’t. And so I was able to just talk plainly to boards to say, “Look, you have to understand this work takes time. You can’t just expect within 6 months or 12 months that all of a sudden all this money is going to come in.” And later the ED wrote me and said, “I’m so glad you said this. It was so good for the board to hear this. And now they’re talking the language that I need them to talk.”

 

Richard Perry 

Yes, yeah. Yeah.

 

Jeff Schreifels 

Now here’s a big one: a finance department that understands and supports fundraising.

 

Richard Perry 

That’s a massive one.

 

Jeff Schreifels 

It’s a dream come true, right? When a CFO, (1) understands fundraising, and (2) really knows how to organize his or her accounting to support fundraising. It’s a nightmare when a finance department can’t even get their fingers on the right numbers for fundraising. And this is something we’ve experienced more times than you can imagine, I mean, a truly enlightened professional finance team understands that their role in the organization is to make sure that the financial underpinnings of the program and fundraising are in place. And that means all the financial systems help make good program and good fundraising happen.

 

Richard Perry 

Now, what’s interesting about that one, Jeff, is that there’s so many non-profits where the finance person is really just viewed as this person that’s in the back there somewhere between the numbers, producing checks, and making payroll. And it’s so much more than that. It’s about program and fundraising. So important.

 

Richard Perry 

Well, here’s another one you can’t forget about: a back office that values donors. This is a key element for success of a major gift program. I mean, the back end of fundraising is everything that happens after the gift is received: sending receipts, thank yous, timing of the receipt and reporting back. I mean, okay, so let’s look at it this way. I mean, you know, what it feels like to go into a store or order a product online, you get the product, you love it, life is good, right? And then then you need to talk to somebody in the back office to deal with a situation related to the product. But when you reach out and you do that talking, you enter a hall of mirrors, and a dungeon of horrors. I mean, all the joy you felt when you took the company up on their promise to bring a value to you, if you just bought their product, I mean, it’s suddenly lost. I mean, it’s dashed by manipulations and jargon and shuffling of the back office. That feels horrible.

 

Richard Perry 

Yeah, like being on the phone for hours, waiting for customer service.

 

Richard Perry 

I know, and getting the run-around. And so this is what happens to donors. I mean, does that happen to your donors? You promised them great things on the front end, but you treated them like dirt on the back end. You just can’t let this happen. I mean, the back end, the back office, needs to be as good as the front office and your promise. It really does.

 

Jeff Schreifels 

That back office stuff is incredibly important. But it’s rarely talked about in the context of serving the donor.

 

Richard Perry 

Right, right. Yep.

 

Jeff Schreifels 

You know, and it’s something again, that leaders have to realize we’ve got to invest in. Now how about a program function that values measurable outcomes? That would be good, huh?

 

Richard Perry 

Well, that’s key to a successful major gift program.

 

Jeff Schreifels 

It really is. And so here’s what the donor is saying. So did anything actually happen as a result of my gift?

 

Richard Perry 

There you go.

 

Jeff Schreifels 

That is the central question all donors are asking. And that is the question you and your program team need to answer. It can’t be some general statement. Because savvy donors are looking for those measurable results. And if they don’t get them, we know they’re going to go away. It’s the number one reason why donors leave. They don’t know what they’re gift did or how it made an impact.

 

Richard Perry 

Exactly. I mean, they’ll fly out the door faster than you can believe. And they are flying out the door. I mean, all the data and all the statistics show that. So there you go.

 

Richard Perry 

Well, I think we’ve covered all the non-negotiables that an organization must have, if they want to have a successful major gift program. Now they’re not easy. They’re really not easy to implement. I mean, we talked about it like it was easy, but it’s not. But not much, you know, that’s good in life is easy. But here’s our promise. If you can get all of these points aligned in your organization, you will experience happy and fulfilled program people, donors, finance folks, managers, and you yourself will be more happy and successful.

 

Jeff Schreifels 

Absolutely, that’s exactly right. Okay, so let’s just summarize a little bit here. Here is what your organization must have to experience success in major gifts. First, a meritorious product or you know, the program; a donor-centered culture; a leadership culture that understands major gifts; a finance department that understands and supports fundraising; a back office that values donors; and a program function that values measurable results.

 

Richard Perry 

There you go. Those are the six things.

 

Jeff Schreifels 

You have that, woo!

 

Richard Perry 

Yeah, you’re going to be ready. And of course, you know, we’re assuming that you have the right people or the talent in place to make all of this happen. I mean, that’s just sort of underlying the whole thing.

 

Jeff Schreifels 

Yeah, that’s incredibly important. So, well, this is good stuff, Richard. And I hope it’s been helpful to you to hear why investing in a major gift program is worth it. Well, Richard, this has been good. So everyone, thank you for being with us today. And we’ll see you next time.

 

Richard Perry 

See ya.

 

Recorded 

Thank you for joining us for the Nothing But Major Gifts podcast from Veritus Group. Richard and Jeff also write an ongoing blog that you can subscribe to for free at veritusgroup.net. Please join us again next time.