10 Reasons Why Most Major-Gift Programs Suck!

(Editor's note: Veritus Group co-owner Jeff Schreifels started the Passionate Giving blog last month, and he's already posted some pretty interesting stuff — like his "10 Reasons Why Most Major Gift Programs Suck!" He's only up to No. 5, so we're going to try to play catch-up. Here's No. 1. Check out the blog for the next four. Then we'll share the next five as he does.)

Over the years, we here at Veritus Group have audited more than a hundred different major-gift programs. Almost all of them suck. "Do you really have to use that language, Jeff?" Yes, yes I do. It’s not that these programs are bad or they need a little tweak here and there; it’s that they are just plain awful. So, the word, “sucks” really fits.

I’ve come up with 10 reasons why this is the case. Now, there are more than 10, and over the course of time I’m sure we’ll get into them all. But, to be pithy and to get people to read my blog, I’m coming up with 10.

OK, I’m going to start with No. 1. Yeah, I know everyone does this countdown thing, but I’m not David Letterman and all of these “reasons” carry the same weight so just hang in there with me.

1. Development directors review the WRONG criteria for success
When we ask a development director how he thinks his program is performing, we usually get an answer like this: “Well, four out of our six major-gift officers made their goals this year. It’s not perfect, but I think we’re doing pretty well.”

Then we ask this: “What is your caseload attrition rate, and what is the value attrition year to year?”

Blank stares, sweat starting to bead up on brow, face turning red …

Most major-gift programs we have evaluated are judged on whether they made their overall goals each year. That’s one criteria. However, we find that seems to be the only criteria. When that is the only criteria we find, it’s masking some bad donor behavior.

See this illustration to show my point.

If you just look at the bottom-line numbers, you see that overall the file grew by 21 percent. Pretty good, huh? But the problem is that this revenue came from new sources. Look at the current caseload. It decreased in value by 49 percent. These are current donors who failed to give a gift from one year to the next. What happened?

What we find is that donors are not renewing their giving year to year by as much as 40 percent to 60 percent each year. This tells us there is a cultivation problem.

Think about it.

In a healthy direct-response program with low-end donors, those attrition rates would not be acceptable. But, in a major-gift program it’s outrageously sad. Here are good folks who have made a significant investment in your organization, and for some reason they failed to continue that investment.

More often than not it’s because someone is not paying attention to these donors.

So, start evaluating your major-gift program by first looking at how your donors are giving year to year. Overall, we want to see as little donor attrition as possible and value actually increasing year to year. Not through new donors coming in the door, but by current donors increasing their investment in your organization.

Jeff Schreifels is co-owner of Veritus Group.