When Should You Hire a Major Gift Officer?

Help wanted!

You want to develop a major gift program for your non-profit, but you’re not sure you have enough donors to warrant hiring a major gift officer. Or you are growing your major gift program, and you’re wondering when it makes sense to hire another major gift officer to add to your team.

Richard and I hear these questions weekly from clients, readers of our blog and non-profit leaders. Our answer is fairly simple: There are two things you need to have before you hire a major gift officer to build one-to-one relationships with donors:

  1. Vision
  2. Donors

Vision

At Veritus Group, we believe that before you consider hiring a major gift officer, you need to ask yourself if you and your organization have the vision to invest in a major gift program.

You have to understand this: major gifts fundraising is a long-term strategy. Unfortunately, Richard and I run into a lot of non-profit leaders who think they can “test it” and find out if it works. By “testing it,” they basically mean they will give it 12 months (and they want to see immediate results in 4-6 months) and see a good return on their investment. This is a red flag to us.

In fact, we have turned down a good amount of business over the years when we either hear directly from leadership or get a feeling that the organization doesn’t understand that major gifts is a long-term investment. Why? Because this means the organization doesn’t have the patience or persistence to build a proper major gift program.

Major gifts work is not direct-response fundraising. You don’t just try it for a short time and see what the results are. Remember, major gifts is about the long game.

Without that mindset – which really says, “we’re going to invest in the long-term health of the organization by building a proper major gift program, and do it correctly” – the program is doomed to fail.

We have seen this over and over again. We believe that we are either so conditioned to get immediate results, or the pressure is so high from authority figures (CEO, Board, CDO), that the major gift program has no chance.

But for those organizations that do have vision, it looks like this:

  • The CEO or Executive Director is fully supportive and has inspired the board to view major gifts (and planned giving) as a long-term strategy for achieving growth and more NET revenue.
  • There is a five-year strategy put in place for growth with low expected return on investment in the first two years, and higher net revenue growth in years 3-5.
  • Everyone in leadership understands that major gifts is about building long-term relationships with donors, and that big donations are a result of these efforts to figure out the passions and interests of their donors, then matching them up with the programs and projects the non-profit is using to change the world.

Having a vision for major gifts also means that they will pay their MGOs well. They want MGOs for the long-term… not the 2.3 years that MGOs normally last at an organization. This allows the MGO to build relationships with donors, and for donors to trust that the organization has their best interests at heart.

Having a vision also means knowing that there will be ups and downs with a major gift program. There will be immediate wins, but there will be frustrations. Leadership with a vision knows that over the long term, if they stay with it, they will see tremendous growth.

Donors

On a practical level, the organization has to have enough donors to warrant hiring a full-time MGO. So here is a formula we use to help non-profits determine if they have enough donors to hire.

Do you have 450 donors who have given $1,000+ cumulatively in the last 24 months? If you do, you can hire a full-time major gift officer. The reason I said 450 donors is that once the MGO goes through a qualifying process, only about 150 (or 1/3) of those donors will want to relate in a more personal way. 150 is the maximum number of donors a single MGO can cultivate successfully.

Now, let’s say that initially, those 150 donors have a total value of $200,000 in immediate giving potential. And let’s say that with salary, benefits, travel, etc, the MGO will cost $100,000. You’re starting at an initial 2:1 return on investment (ROI). I know that seems low for major gifts, but remember – you start low and build it. The VISION is that over time, say in five years, that caseload will grow in value to 6 or 8 or even 10:1. And donor attrition will drop from 40% to 5% a year. On top of that, the MGO will have identified 3 or 4 donors who have capacity to give high 6- and 7-figure gifts. This is how it grows.

Now, what if you look at your database and you only have 250 donors that meet the cumulative level of $1,000+ in the last 24 months? Well, consider hiring a part-time MGO, or allocate 50% of a current staff member to it. What if you only have 100 or 50 donors? Again, while you cannot hire a full-time person, you can allocate your current staff to at least begin the process. By taking that initial number of donors and figuring out that only 1/3 will end up a caseload, you can figure out how much time to allocate to major gifts.

So the answer to whether or not you should hire an MGO is all about two things: Vision and donors. You have to have both. Trust us. We have been building major gift programs for over 11 years, and we’ve seen that if vision and donors are in place, great things will happen for revenue growth at your organization.

Jeff

PS – For a more in-depth look at how to start or grow your major gifts program, request our free White Paper on the subject, “Starting a Successful Major Gift Program.”

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5 Comments

  • Wendy Taylor says:

    Thank you!!! This should be REQUIRED reading for all Major Gift officers looking for a new position. This information substantiates my belief that many organizations do not have the donors for the programs they want to implement.

  • M. McClain Bybee says:

    Jeff and Richard.
    This is one of the BEST pieces of counsel you have shared, over the last year, with those in the non-profit profession. After my 39 years of experience, in a full-service development office, your two core principles regarding whether or not to hire an MGO is spot on. If the non-profit board or senior management cannot answer your two questions, in the affirmative, and with full support of the plan, the Chief Development Officer would do well to NOT go down the path of hiring a dedicated MGO.

    Well done, your advice and counsel is sound.

  • This is a fantastic and concise explanation. Thanks for sharing.

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