The other week, I posted on LinkedIn about the limits of a major gift caseload, and it caused quite a lot of reactions. It was a simple post that said:
“A Major Gifts Officer cannot be expected to manage a qualified caseload of more than 150 donors in a meaningful and relational way.”
If you have been reading our blog for any length of time, you know we’ve been hammering this point home over and over for years. And the reason for that is when we do our analysis of donor files, we consistently see caseloads well above that, in the hundreds of donors.
What I didn’t expect, however, were comments from dozens of people saying 150 was still too high, claiming it should be 50 or 75 at the most.
But, let me back up a bit. There is good reason we say, “no more than 150 qualified donors.” Over the many years we’ve worked with thousands of major gift officers. In analyzing the efficient use of an MGO’s time, we have found that an MGO can effectively handle no more than 150 relationships (also assuming the caseload is properly tiered A-C) while at the same time providing enough value and ROI to justify the cost of cultivating those relationships for the organization.
Besides our own empirical evidence based on our work with those MGO’s, there is research to back this up (read about Dunbar’s number). This further explains how our brain is wired to be able to comfortably handle around 150 different relationships.
When an MGO engages with more than 150 donors, they get overwhelmed, and they end up failing to fully develop meaningful relationships with donors. And not only is the organization not served well; ultimately the donors are neglected. Which is why we see such massive value attrition going on in major gifts.
Okay, now getting back to the LinkedIn post. As, I said, what I found strange was how many non-profit leaders, managers and fundraisers argued that it should be way LESS than 150 qualified donors if you really want to have strong, personal relationships with your donors. That could be true, except no one, NOT ONE PERSON, attached to their argument the value of that caseload.
This is a problem. And it’s one of the things that bothers me about major gift people. They don’t always look at the full picture. They have a feeling about this 150 number, but they don’t back it up with data.
Richard and I could totally agree that a caseload could be lower than 150 donors. But only if the value of the caseload justifies that number.
We could even agree that it could be 10 qualified donors if the value and complexity of those donors justified the ROI. In fact, we have seen portfolios of 10 or 20 donors, but the value of those caseloads was over $10MM in total revenue! And, in that case, the ROI of that portfolio was 67:1.
Every portfolio has an economic reality attached to it. Total Revenue of portfolio minus the cost (salary, benefits, travel, assistant expenses) to cultivate = net revenue (for program). Calculate return on investment (ROI) by dividing Total Revenue by Total Cost. So, this way you can determine how much revenue you bring in for every dollar of cost.
In a new portfolio, that could be 3:1, but as it grows, it should be moving toward 6 to 8:1. And in mature portfolios, anywhere from 10:1 to 20:1.
Putting together a portfolio of qualified donors is not just about the quantity of donors. It’s also about the value of those donors.
Because ultimately, your major gift program should be your highest-net-revenue-producing fundraising strategy. This is where you are providing the most revenue for your mission.
If you’re loading up your MGO with more than 150 qualified donors, you are misusing that MGO’s time and efforts. If you’re allowing an MGO to have less than 150 qualified donors on their caseload which is now mature (three or more years of management) and the caseload value is less than $400,000, you are misusing your MGO’s labor.
And that’s something to change right now. For your organization’s sake, for the sake of your donors, and for the fulfillment of your MGO’s potential.
I love that you’ve attached science and economics to what is generally a “stab in the dark” process. This should be an extremely useful article for development directors and major gift officers seeking to make the case for more/less numbers in their portfolios. Not to mention making a case for increased staffing!
Absolutely! It helps put it all in perspective.