Do you remember when you were 7, and that kid next door had all the cool toys? You so desperately wanted to play with them, but he wouldn’t let you. He’d say things like, No! These are my toys – go get your own! So instead, you went out and got your own toys. But they were never as cool, and even though you still had fun, you knew there was more fun to be had . . . if only you had some of those cool toys too.
Right?
It’s funny (and sad) how some things never change.
Twice in the last month I’ve had discussions with nonprofit fundraisers who were lamenting their inability to find new potential major and planned giving donors. What’s most surprising is that both of these people work for nonprofits that have donor files in the range of 30,000 – 40,000 supporters.
Even conservatively, organizations of this size should have 1,500 – 2,500 good quality potential major donors. I’d bet that given the markets these organizations are in, and the type of donors that support them, they’re more likely to have 3,000 – 5,000 potential major donors.
As these conversations progressed, both fundraisers shared nearly the exact same story. While their organizations had tens of thousands of donors, they were not allowed to prospect for potential major/planned gift donors from the organizations’ existing donor bases.
Yes, you read that correctly. Not allowed.
The problem, you see, is that these organizations have the responsibilities for fundraising managed by two different departments. Annual Giving manages the organization’s direct mail program, special events, telemarketing, and online giving. They’re also responsible for managing the database of supporters. In both organizations, this department raises the lion’s share of the revenue for the organization.
The Major Gifts department is tasked with identifying, cultivating and securing major gifts in support of the organization. When I say identifying, I literally mean identifying. Major gift officers are expected to essentially build their own major gift pipelines through personal networking efforts. But under no circumstances are they allowed to prospect from the Annual Giving donor file.
In both organizations, the Major Gifts department is fairly ineffectual (surprise!). They raise some money, but nowhere near the kinds of dollars they could raise if they had access to the organization’s entire donor base.
The first time I heard this description, I was speechless. This structure defies logic and common sense. But in both instances, the reasoning for this compartmentalization was exactly the same.
Credit.
The Annual Giving staffs have goals, and the Major Gift staffs have goals. Because these are two separate departments, their goals aren’t shared. So what happens is the Annual Giving team is reluctant to “give up donors” because they are counting on the gifts from those donors to hit their income line and help the meet their goals. At the same time, the Major Gifts team desires to move likely major gift donors from the direct response / annual giving program and into a personal cultivation stream in order to solicit a larger gift (which would hit the Major Gift departments’ bottom lines).
Unfortunately, the departmental structures, and the resulting competition between these two teams means that neither department is really maximizing their respective income potential. And there’s a very good chance that neither group is building solid, long-lasting, beneficial relationships with donors who just want to help the organizations’ clients.
The only way these two organizations are going to significantly improve their fundraising is if their fundraising teams learn to play nice together. Just like back when you were 7 trying to get the neighbor kid to let you play with his favorite toys . . . until everyone understands that it’s a lot more fun when everyone is playing with the cool toys, no one will be having all that much fun!
Or raising all that much money either . . .
Do you have similar challenges in your nonprofit? What are you doing to improve the situation, and bring your teams together to be more effective? Please share!
I think you nailed it. Whether it’s Major Gifts, Annual Giving, Donor Relations, if the structure of an organization rewards individuals rather than the whole we lose sight of what effects we are having on the entire mission. We refuse to share information. Communication is stifled. We are all out to make sure we meet our personal goals. I think this culture has to be stopped from the top of the pyramid. Collaboration is key to keeping programs running.
How do you suggest approaching management about making these changes?
You’re absolutely correct that change has to be supported from the top (not just the CEO/VP level, but also the board).
Leadership has to believe this is a problem (which, in most cases I’ve experienced, the do – they just don’t know what to do about it), and has to believe it is a problem worth fixing.
The best way I can think of to do this is to show a few examples of where a coordinated approach could/would have resulted in additional income to the organization and/or improved long-term relationship with donors. Or on the opposite side, provide some examples of situations where the competition for a particular donor or gift resulted in a negative impact (lost donor support, received less revenue than the prior year, donor complaints, etc.).
In addition to that, you need to come to them with a solution to the credit issue. One option there is to establish coordinated personal/corporate goals. Annual giving, for example, could be measured on the results of specific campaigns, while major gifts needs to be measured on the relationships/revenue from specific donors. So, if a major donor makes an annual fund gift, the annual fund campaign could get “credit” for contributing to the campaign results, while the major gift officer assigned to the program would get “credit” for the revenue generated by that particular donor.
This could get really complicated, and I don’t have an easy, clean solution for you. It’s something that would need buy-in from all levels in your office, and would require a lot of collaboration across the staff. But something like this would be a good start.
I had insight from a Major Gift officer who has been a successful fundraiser for 18 years. It’s a soft credit system. Her explanataion is if a supporter comes in through Direct Response and it’s initial gift is $200 but after research ad few more trigger gifts it is passed on to the Major Gift team. Any subsequential gifts are credited back to the Annual Giving/Direct Response department via a “soft credit”. Therefore the the DR team is happy to research, find gems and pass these donors to the MG team, knowing that those dollars won’t be missed at the end of the year (but hopefully better numbers).
Essentially the culture of an organization has to be altruistic rather than a sales department with quotas. I can see this so clearly at my organization but am not in a position to voice it. It can be frustrating knowing we could be missing out on some extra revenue because of pettiness.
An excellent example of the antithesis to Ronald Reagan’s: “There is no limit to what you can accomplish if you don’t care who gets the credit.” Thanks.