Why Universities Are Doing Major Gift Fundraising All Wrong

You're doing it wrong.For years, many of my major gift fundraising colleagues around the country have considered universities and colleges to be top examples of how to do major gift fundraising properly. Many (not all) seem to have all the resources to do the job right. They have:

  • Big budgets
  • A team of researchers
  • A seemingly unlimited number of wealthy alumni who love the institution
  • High profile campaigns with lofty goals and PR budgets.

And if you just read the trade magazines, you would think they are doing pretty well. How many times do you read in the Chronicle of Philanthropy that a university has just completed a billion-dollar campaign? It feels like it’s almost every week.

Richard and I often hear from major gift officers outside of higher education who like to use this excuse: “If I only had the resources of the university, with unlimited donors like they have, I could do so much more.”

I have to admit that before we started working with universities, I thought the same thing. And then I started looking at their donor database and asking questions.

What did I see?

  • Low Donor/Alumni retention rates.
  • Massive donor/alumni value attrition rates – in the 60-75% range.
  • Donors/Alumni who were giving the same size gifts year after year after year.
  • MGO caseloads with 300-500 donors.

So after further research and asking more questions, I now know why we’re seeing such terrible performance in higher education. In many universities, there is…

  1. Very little value placed on building relationships. The overarching philosophy of development leadership is, “Get us the money… now.” This is pressure the Deans are putting on Development. All around, there is just a ton of pressure and focus on money.
  2. Basically no such thing as qualifying a donor/alumnus. What we see are major gift officers who are handed a list of alumni (some of whom have never made a gift) who ranked high on a wealth score of some kind, and the MGO is told to go out and bring in a gift. And by the way, major gift officer, here are the overall revenue goals (not based on data) you need to make this year, or your job is in jeopardy.
  3. A disregard for alumni/donors who don’t meet the university’s criteria of a major gift (some start at $50K-$100K) – they get dumped into the “annual fund” and never talked to.
  4. No system or structure in place. We found that many universities are not qualifying donors, not creating goals for every major donor or creating individual strategic plans to know exactly where they are going with each donor. And the evaluation criteria for major gift officers are often antiquated and dis-incentivizing.
  5. No regard for building a pipeline. As I said previously, the many donors who are giving at high capacity are not given any special consideration until they meet a very high gift level. There is very little strategy on these “mid-level” donors other than to send them the annual fund mailings.

So besides the terrible retention and attrition problems, what results is poor morale with major gift officers, and donors who don’t feel their university listens to them. Richard and I receive emails and calls from university major gift officers all the time, exasperated by the philosophy and practices of their departments. Many feel like they are part of a donor-factory… just burn through your donor list and get the money.

Now the good news in all this is that there ARE universities and colleges who are forward-thinking, who are putting donor-centered principles into practice. We know, because we’re working with a bunch of them. Here is what they are doing:

  1. Starting to put relationships first, knowing that the money will follow;
  2. Qualifying donors so that each MGO is working with donors/alumni who want a deeper relationship with the university.
  3. Putting a structure to the major gift program as described above.
  4. Understanding the donors’/alumni’s passions and interests, and using that to drive offers that the donors will want to fund – rather than pushing university “priorities” on the donors.
  5. Creating a mid-level donor/alumni program that creates a pipeline to major gifts, so that donors who move to major donor status are already qualified for the major gift officer.
  6. Valuing long-term outcomes — understanding that it takes time to build a caseload of qualified donors, ongoing training for their MGOs, and donors’ need to trust the institution in order to make transformational gifts.

If you and your university are practicing these, that’s awesome. We’ve have seen some amazing results with the higher-education clients we work with. Putting relationships first works. Treating donors and alumni like they matter works. Giving MGOs the time and structure they need to succeed works.

Jeff

Facebooktwitterlinkedin

Leave a Reply

Passionate Giving Blog™