Overhead myth.In the March 2018 issue of The Chronicle of Philanthropy, there was an article on a new survey by Grey Matters Research and Opinion 4 Good that says this:
Donors really don’t care about overhead; what they really want to see is impact.
Richard and I have been stressing this for years, and there is new research out there that confirms our thinking about major donors.
At Veritus, we’ve been talking to many organizations who for the first time realize they need to start investing in major gifts. Wonderful! But what many of these organizations don’t quite get yet is that investing in major gifts is not just about hiring a major gift officer(s).
What’s happening is that non-profit leaders are starting to wake up to the fact that major gifts is an area they need to develop if they’re going to be around for the long haul. So they tell their development director to put together a major gift program and hire someone, without thinking about what it actually takes to support the whole thing.
Part of our work when we do our free donor assessment is to provide organizations with a five-year revenue forecast. It’s quite a powerful tool. Usually, what happens when we reveal the five-year forecast is that they start salivating at the growth potential – because it’s quite enormous.
But at Veritus we have to stress one big thing: This is NOT going to happen unless you have a culture in your non-profit that supports the major gift program. It’s not just about hiring one or more major gift officers. It’s about creating an infrastructure around the team that supports the development of the program.
So you might be asking: what does it actually take, then, to fully support a major gift team? Here it is:

  1. Making sure you have a strong pipeline of donors to move into major gifts. This means you are actively acquiring new donors, cultivating them with direct-response fundraising strategies, mid-level donor strategies and deepening their engagement with your organization – from a $10 donor through a donor who has made a major gift.
  2. Leadership understands that major gifts is about developing relationships with donors on a one-to-one basis, to know their passion and interests. This takes time.
  3. Solid management is in place to support major gift officers. This can be done in-house or outsourced, but the point is that the management function needs to provide the correct structure and ongoing coaching and training of the MGOs to help them succeed and make their revenue goals.
  4. Major gift officers have solid offers at different price points to inspire their donors. This means that finance and program are working together to provide this information so that the major gift team is equipped to match up those programs with their donor’s passions and interests.
  5. You have a process and procedures in place. These are adhered to for the program team to report on impact through facts, figures, and personal stories to equip the major gift team to report directly to their donors how they made a difference.
  6. You have a robust back office. This means you have all the right systems to be able to thank donors promptly and correctly, and report on their overall giving. You have a database that allows you to get accurate information and the ability to plan future moves with donors, goal setting and strategic planning. Additionally, it allows the major gift officer easy access to update donor information.

Okay, so now you know. Getting a major gift program going is not just about hiring a major gift officer to go out and start talking to donors. If you want a successful program that will continue to build solid net revenue, year after year, you need to invest in the infrastructure outlined above to make it happen.
That takes commitment and money to make it happen. Ultimately, the result will be a tremendous amount of NET revenue to fund and expand the projects and programs you provide that are changing the world.
Now, go out and increase that overhead and see NET revenue take off.
Jeff

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