I can’t believe I’m still writing about this, but in talking to many MGOs recently, we’re still returning to this issue: using donor capacity rankings (or wealth ratings) as the first criteria when building a major gifts portfolio.

Just recently I heard of a large organization completely changing out the portfolios they’d grown over the last five years and replacing them with only donors that have the capacity to give $500,000 or above, even if the donor had last donated 3 years ago or had only given a nominal gift. But as long as the donor had a high-capacity rating, they were put into an MGO’s portfolio. The org also rolled out some outrageous fundraising KPIs that I’m not even going to go in to.

Here’s what else is happening. Many organizations are now “modeling” their entire file to find “hidden” major donors who have yet to give a qualifying gift. That’s great, except what they are doing is identifying those donors and immediately putting them into some poor MGO’s portfolio who is supposed to be cultivating already known and qualified donors. So, instead of qualifying those “modeled” donors first, they fill up MGO’s portfolios with these donors, greatly distracting the MGO’s ability to build relationships with their already qualified donors.

Here are the problems that will ensue if you use donor capacity and wealth ratings as your primary method of building a portfolio:

1. You will bring in less revenue from donors who are already qualified, because you have now diverted the MGO’s attention.
2. MGOs will focus most of their time on these “high capacity” donors because new people are the “latest thing,” and they will become frustrated because most of those donors will not respond to their outreach. We know this from years of experience analyzing data and working directly with frontline fundraisers.
3. Because you have unrealistic KPIs associated with these “high capacity” donors, your MGOs will feel like failures because they can’t attain them.
4. Donors who ARE qualified will feel abandoned and not receive the full attention they used to get from MGOs. Relationships will turn sour or disappear altogether.
5. Your MGOs (who leave their role every 18-24 months on average) will now leave at the 12-14 month mark, because they can’t do their job correctly or they feel way too much pressure from leadership to “get water out of a rock.”

Instead:

1. Create portfolio pools of 450 donors who meet your major gift criteria. $1,000 cume, $5,000, $10,000, $25,000 – whatever that is for your organization. Rank the 450 donors by most recent gift size, highest gift, longevity, AND wealth capacity ratings, along with what you may know about the donor.
2. For donors that have gone through a modeling process and have not given a qualifying major gift, you must create a separate qualification process that is different from a donor that gives a qualifying gift.
3. Then, for donors that have given a major gift or met your other metrics, create a qualifying process so you know if a donor actually wants a relationship with you. For a full caseload of 150 qualified donors, this takes 6-8 months, sometimes longer.
4. As you qualify these donors, you will then create revenue goals with a strategic plan and tier your caseload based on what you know about each donor.

This is how you create a dynamic major gift portfolio. Doing anything other than following this process will lead you down a very hard path. The key is qualifying. Having a qualified portfolio will set you and your major gift officer up for success. From this base you can build authentic relationships with donors.

Jeff