Development directors review the WRONG criteria for success
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10 ‘‘ ‘‘ When we ask a Development Director how they think their programme is performing we usually get an answer like this: “Well, two out of our three major gift fundraisers made their goals this year. It’s not perfect, but I think we’re doing pretty well.” Then we ask them this: “What is your case load attrition rate and what is their value attrition year to year?” Most major gift programmes we have evaluated are judged on whether they made their overall goal 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 behaviour. See the illustration below to show the point: If you JUST look at the bottom line numbers you see that overall the file grew by 21%. Not bad. But the problem is that this revenue came from NEW sources. Look at the current case load. It decreased in value by 49%. 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 40-60% each year. This tells us there is a cultivation problem. Think about it. In a healthy direct response programme with low-end donors those attrition rates would not be acceptable. But, in a major gift programme it very often goes unnoticed. Over the years we have audited over 100 different major gift programmes. In every single instance the audit has shown that the major gift programme was missing out on income at some point and at varying degrees. In every single instance the organisation was unaware of the fact AND the source of the missing income. By Stephen Butler, UK Director, Veritus Group Reasons Why Most Major Gift Programmes Fail Development Directors review the WRONG criteria for success Reason 1 The Veritus Group, Castlethorpe Lodge, Hanslope Road, Castlethorpe MK19 7HD t: + 44 1908 511625 m: 07866 695476 e: [email protected] www.veritusgroup.co.uk Income from all donors giving £1000+ cume Income from donors giving £1000+ cume for the first time in FY08 Income from the donors who gave £1000+ cume in FY07 £2,560,000 £2,560,000 £2,560,000 £ _ £3,100,000 £1,305,600 £3,100,000 £540,000 £(1,254,400) £1,794,400 £1,794,400 £540,000 21.09% 100% -49.00% 21.09% FY07 FY08 Variance Percent change A serious problem covered up by “new” money... Scenario Scenario 1 2
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Transcript of Development directors review the WRONG criteria for success
10 ‘‘
‘‘
When we ask a Development Director how they think their programme is performing we usually get an answer like this: “Well, two out of our three major gift fundraisers made their goals this year. It’s not perfect, but I think we’re doing pretty well.”
Then we ask them this: “What is your case load attrition rate and what is their value attrition year to year?”
Most major gift programmes we have evaluated are judged on whether they made their overall goal 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 behaviour.
See the illustration below to show the point:
If you JUST look at the bottom line numbers you see that overall the file grew by 21%. Not bad. But the problem is that this revenue came from NEW sources. Look at the current case load. It decreased in value by 49%. 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 40-60% each year. This tells us there is a cultivation problem.
Think about it.
In a healthy direct response programme with low-end donors those attrition rates would not be acceptable. But, in a major gift programme it very often goes unnoticed.
Over the years we have audited over 100 different major gift programmes. In every single instance the audit has shown that the major gift programme was missing out on income at some point and at varying degrees. In every single instance the organisation was unaware of the fact AND the source of the missing income.
By Stephen Butler, UK Director, Veritus Group
Reasons Why Most Major Gift Programmes Fail Development Directors review the WRONG criteria for success
Reason 1
The Veritus Group, Castlethorpe Lodge, Hanslope Road, Castlethorpe MK19 7HD
t: + 44 1908 511625 m: 07866 695476
www.veritusgroup.co.uk
Income from all donorsgiving £1000+ cume
Income from donors giving £1000+ cume for the �rst time in FY08
Income from the donors who gave £1000+ cume in FY07
£2,560,000
£2,560,000
£2,560,000
£ _
£3,100,000
£1,305,600
£3,100,000
£540,000
£(1,254,400)
£1,794,400 £1,794,400
£540,000 21.09%
100%
-49.00%
21.09%
FY07 FY08 Variance Percentchange
A serious problem covered up by “new” money...
Scenario
Scenario
12
The Veritus Group, Castlethorpe Lodge, Hanslope Road, Castlethorpe MK19 7HD
t: + 44 1908 511625 m: 07866 695476
www.veritusgroup.co.uk
Here are good donors who have made a significant investment in your organisation and for some reason they failed to continue with that investment.
More often than not it’s because someone is NOT paying attention to these donors.
So, start evaluating your major gift programme 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 organisation.
How is Veritus different from other major donor consultancies?
Our work is based on facts which clearly demonstrate the effectiveness of the major donor programme. In other words, it is not based on overall income, on intuitive feeling, or even how much growth is being achieved. In our experience very few charities, fundraisers or consultancies apply the discipline of analysis on the Major Donor file.
Only then, when we have a clear idea of what is going on, do we begin to plan. We build a plan for each individual donor with financial goals and with a clear path of relationship development. And this is where our work takes off from that of other companies – our rigour and discipline in the planning and ongoing working of the plan are a sure-fire, tried and tested means of achieving the income goals for all the donors on the case load.
At Veritus we are committed to ongoing, monthly input with our clients to ensure that our recommendations result in actual achievable goals, both financial and relational.
From our experience we have discovered at least 10 Reasons why most Major Gift programmes either fail or do not succeed to their full potential. There may be others, but in our experience these are the most common.
Our work is based on facts which clearly demonstrate the effectiveness of the major donor programme.
We believe that it is essential to use the right tools to help you get to the right destination.
If you would like to talk more about developing and growing your major donor programme then call Stephen Butler on 07866 695476 or email him at [email protected]
