Sixth in a Series: Unhealthy Major Gift Practices

Imagine this.
You are an investment advisor, and a client comes to you with $10,000 to invest.
You offer her several options. Here is what you say: “Ann, you have several choices, and they all have the same risk:

• “With option #1 we can invest your $10,000 and get $30,000 back after a year.
• “Or, with option #2 we can invest your $10,000 and get $50,000 back after a year.
• “Or, better yet, with option #3 we can invest your $10,000 and get $90,000 back after a year.

“Which of these options would you like to go with?”
And Ann says: “Well, I think I would like to do option #1 and invest my $10,000 and get $30,000 back after a year. That would suit me just fine.”
Believe me, you would think Ann was crazy. Same risk in each option, but a far greater return in option #3. But Ann chooses the lowest return. Why would she do that? I haven’t the faintest idea.
This is the situation Jeff and I, and the rest of our Veritus team, face every week as we talk to good folks in non-profits large and small around the United States, Canada and Europe.
Even though we can prove that major gifts has the highest return of any fundraising strategy (other than planned gifts), managers and leaders choose to ignore the facts and dump more money into digital media, direct marketing, events and other programs that don’t have that kind of return.
Why do they do this? Honestly, we don’t know.
But here’s a guess as to some reasons many of them might offer:

1. “We don’t have the budget to do major gifts.” Actually, you do have the budget to do major gifts. You just need to make some hard decisions that will favor your organization instead of continuing to finance low-producing strategies.
2. “We don’t have anyone to lead the program.” Well, find someone. You can’t afford not to do it. (Or let us help you. That is what we do.)
3. “Our priorities right now are to develop our digital media programs. We really need to meet donors where they are, and the use of digital media is increasing. We don’t want to be left behind.” Developing your digital media program is a good idea, but not at the expense of building out your major gift program – which relies heavily on highly-customized, personal, high-touch programs supported by digital and other media. Find a way to do both.
4. “Our priority right now is to reach out to the Millennials – they are the future donors to our organization.” OK, so you are going to ignore the Matures and Boomers who are currently engaged in the greatest transfer of wealth in human history? We think your priority should be those donors.
5. “I just don’t believe that major gifts will have the kind of return you are claiming it will.” Really? Can we show you some results from other organizations? Do you want to talk to others so you can hear their experience? Do you really believe that your other fundraising strategies have a better return on investment? Seriously??

These are some of the reasons that have been given to Jeff and me over the last year. Hard to believe, isn’t it? But it’s true.
And it’s pretty sad. Because these leaders and managers have been entrusted with the financial welfare of their organizations, and they are seriously not delivering on what they were hired to do – to secure as much net revenue for the organization’s cause as possible.
We don’t understand this kind of mentality. And it’s one of the mysteries we have to deal with every day.
Luckily, there are hundreds of enlightened managers who are taking the leap and making the investment, and reaping the rewards of a well-managed major gift program. It’s encouraging to see. And the planet is better for it, which is the one thing that matters most to us.
Richard
Read all the posts in this series:

• Wrong Thinking about Major Gifts
• Not Understanding the Major Gift Pipeline
• The Wrong Organization Structure
• Treating Donors as Sources of Cash 
• No Donor Offers
• Not Investing in Major Gifts (this post)