Three Operating Principles of Major Gift Fundraising

There are certain operating principles that fuel how we think about and relate to donors. In this paper we’ll explore how these principles affect your major gift program, and how you can implement then into your daily practice.

Operating Principle One: Treat Donors as Partners, Not Just Sources of Cash It’s no secret that major gifts fund development is a growing area within the world of fundraising. Why? Because more and more organizations are recognizing that they have a small percentage of donors giving (or with the potential for giving) the biggest gifts. By investing in a small group of highly motivated major donors, organizations can dramatically increase their return on investment (ROI) beyond what can be realized in direct response or other programs. Healthy, vigorous major gifts programs often bring in up to 60-80% of the giving realized by organizations. It’s hard to argue with a program that invests in 10-20% of the donor audience, and brings in 60-80% of the revenue in the long term. Beyond ROI, fund development success is also often measured by the investment required to raise one dollar of revenue. Whereas direct response programs that are healthy and in full force can often require a 62-65% investment, similar major gifts programs often require 20-22%. The long-term benefits to these programs, when run correctly, are nearly indisputable. Major gifts programs are based on a one-to-one approach. This means that more time and money is spent personally cultivating the relationships and the gifts for a smaller group of donors. This is different from the one-to-many direct mail approach where one bulk message is communicated to thousands of people. In major gifts programs each donor has an individual plan that is personally administered and managed by the major gifts staff. This is an important distinction because some organizations think they are pursuing major gifts by sending specific appeals to their biggest givers. In reality, such mailings are still direct mail programs because they involve sending one broad message to many people. True major gift strategies always involve personal, individualized communication. As such, the major gifts process is labor intensive. It takes a lot more time and effort to communicate individually with 100 people than it does to send them all a boilerplate letter. However, major gifts strategies, when correctly pursued, have proven extremely effective. One of the reasons is that the personal approach taps into the passion and emotion the donor feels for the organization. For example, in the Donor Loyalty Cycle below, the main reason we lose donor loyalty and they go away is that we don’t complete the cycle of telling them how they made a difference with their gift. We thank them and then are on to the next donor looking for a donation.

Donors who are choosing to give large sums of money to your organization are also choosing not to give to other organizations. This means that when they choose to give to you, there is commitment, passion and loyalty tied to these gifts. The organization’s responsibility is to show loyalty back to the donor by explaining what the gift did in meaningful terms. History shows that if this emotion and investment is not reciprocated back to the donors, they will eventually invest their money elsewhere. So, how do we treat donors as partners rather than sources of cash? Ask yourself these following questions about your organization and how you and your colleagues work with the major gift donors: • Do you know what [specific donor] is passionate about and why they give to you? • When was the last time you invited one of your major donors to participate in one of your planning sessions? • Do you know the significant dates in your donor’s life? • Do you know their business? • Do you know their hobbies? • When was the last time you talked to one of your major donors at length that had nothing to do with asking for a gift? • When was the last time you surprised a donor and did something nice for them? • When was the last time you reported on a specific project they funded and had the project leader contact them to give them an update? • When was the last time you saw an article about one of your donors and commented on it to them? It is very easy to get caught up in sending out updates and letters asking for support to all donors in bulk. It is easy to say our donor gives just because they have for 15 years but not really ask the right questions and dig deeper to find out their interest and passion for your organization. It is easy to have other distractions in the organization like event planning, prospect hunting in the community, meetings, and more to pull you away from focusing on your individual donors and building a meaningful partnership with them. The Role of Money “What’s more important, Richard,” the major gift officer asked, “a relationship with my donor, or the money they can give?” Well, I couldn’t answer that question easily, because it’s both. The donor only gives money to your organization when she believes that you’re already working on a problem or issue she wants to help solve, and you are in some sense her “agent” to accomplish these things. And of course, you have to look at the amount of money that this specific donor can provide in relation to the other ways you could focus your time that might bring even more money to bear on this problem. Here are the principles involved, as I think of them: The donor-related principle is this: if you are properly serving the needs and passions of a donor and there is genuinely a match between those passions and interests and the needs of the organization, then the money will follow. The lack of money is usually symptomatic of there not being a match; the donor not feeling properly cared for, or; a financial circumstance that prevents them from giving as they did in the past or as they would like to do now. If there is not a match of donor needs to organization needs, then it is time to move on. If there is a match but the relationship is bruised because you have not properly served the donor, then you need to repair that. If there is a match but there is a mitigating financial circumstance, then you need to stick with the donor provided the criteria of principle below is met. The organization-related principle is this: You only have so much labor as a major gift officer (MGO). And stewardship requires that you use that labor wisely. The core objective of the job is to secure funds for program. Without the funds you cannot do what you are supposed to do. So stewardship and accountability requires that a MGO focus on those relationships that will generate the most funds for program and have the best return on investment (ROI). I truly believe donors understand this. They do not want us spending time ($) with them when that time spent does not benefit the organization financially. This principle is what drives the rigorous review of caseloads to see that a MGO is talking to the right donor. The right donor is defined as (a) One who has capacity to give, (b) One who wants to talk to us – i.e. is qualified, and (c) One whose passions and interests match the needs of the organization. Putting these two principles into one big “sort” results in making decisions that are a confluence of relationship and money. It is not always easy. And it is not always objective. But a lot of the data that informs the decision is available. Ultimately, we are the donors’ agents to accomplish their goals that are in alignment with our organizations. When we see our relationship with them in this light, it will make our path clearer.

When Money Is Valued Over Relationship I've had some pretty serious struggles with money. Wanting it. Being controlled by it. And letting it blur my values and judgment. I will never forget the time I held on to money so tightly that I lost a relationship over it. I am too ashamed of that event to tell you the details. But it sticks in my heart and mind as one of the lowest points in my life. What is it about money that grabs us like it does? My wife, Karen, tells me it is about fear and security. You fear you will not have enough to be secure so you obsess about it. I can relate to that. I grew up in a very unsettled and resource poor situation. Over the years I have had to struggle with issues of security. Even when I had enough, I still worried. I am now almost over it, but there is still a monster under the bed. There is no doubt that money drives things in our personal as well as our professional lives. And in the non-profit world it is a delicate balance. Sometimes you’ll see a non-profit whose leaders have moved from away from a love of the people or causes they serve; they start focusing on getting and loving money OR the sources of money – and they’re headed towards failure. It may take some years but, believe me, the time will come. What can you do to counter this very natural tendency in the major gift or fundraising field? I have a few suggestions: 1. Get in touch with the fear and security issues floating around in your head. These are things like fear of failure in your MGO job; fear of not having enough money; fear of being shamed, and; concerns about your security and well-being in the future. We all have these fears, so there is nothing to be ashamed of. But if these fears are dominating and controlling your life take steps to get help. I had to do that and it was good for me. 2. Learn to identify when those fears are pushing you toward an unhealthy focus on money. If you can spot the fear coming up sooner, then you can make a better choice in dealing with it. For instance, you are behind in your caseload performance and it is eating at you big time. You are now with a donor where your original intention was NOT to ask for money but to cultivate the relationship. But the fear is rising up inside of you. And a voice inside screams: "Get the money!" This is a perfect time to call this situation out and get in front of it before you do any real damage. When these feelings come up, one technique I use is to force myself to wait before I take action. Waiting is good. 3. Make the right choice. After waiting, make the right choice. In the illustration above, get back to cultivation as per your original plan. 4. Talk about this topic/dynamic in your environment. Purpose to bring up this topic of money vs. relationship in your workplace. It will be good for everyone. But as you do this remember to be kind and balanced in your approach so you will be listened to vs. ignored. Money plays a very important role in our society and our workplace. It is a central item in major gift fundraising. But the second you move off of relationship to money you start down the path of failure. Don't do it. How to Turn a Donor Into a Stranger We got this letter from a non-profit a few years ago. When I read it, I took a little trip in my mind. I went to this lady’s home and sat beside her as she was writing. It was a very sad experience. Take a moment to read what she wrote. I have faithfully reproduced it here, with some slight edits for clarity: Dear Sir: I’m writing to let you know that I will no longer be able to support your charity. It’s not because I don’t think it’s a worthy cause… I do. You provided a fantastic service to my dearly departed husband 12 years ago at his time of greatest need. I have been supporting you ever since. I am now in my declining years and energy prices are rocketing. Like many people my age I have been relatively frugal in the run up to my retirement and have a few dollars set aside. But I am stopping my contributions to your organization. So why, you may ask, am I stopping my support? It’s not because I can’t afford to continue with a small regular donation. The answer is because you don’t know me. I feel like a stranger. We’ve been dating for the last 12 years, but we’re not on a first name basis. Sometimes you even forget my name. I do enjoy the occasional magazine you send me but it always comes with a request for an extra donation. I also acknowledge the fact that you write to me a couple of times per year, usually at Christmas and Easter with a warm thank you… along with a very polite suggestion that I may wish to support your seasonal appeal. That’s OK, I don’t mind. What I do find upsetting, though, is that you don’t seem to be aware of the deep fondness I have for the charity. I feel like I’m just a cash cow. Do you know that I’ve been running a monthly coffee group to raise funds for the charity for the last 4 years? I’m not too sure how much money it’s raised, but I think it must be getting on close to $5,000. I used to do collections for you by visiting all the shops, but my arthritis was playing havoc with my right knee during the winter months. Are you aware that I regularly donate my unwanted clothes to one of your shops and that I buy all my Christmas cards from you? Don’t tell anyone but I often buy quite a few stocking stuffers as well! Yes, I do make a regular gift by standing order and that’s how I like to make my donation. I’m now very old, set in my ways and, to be perfectly frank, I’m sick of getting your direct debit forms. I’ve had several in the last 3 years. Surely you must realize by now that I don’t want to switch. I’ve been supporting the charity for 12 years. I don’t want my name in lights and I’m not after a medal. I just don’t want to feel like I’m ‘supporter reference number 5439’, which I’m told I should quote if I ever call you up. Come to think of it, maybe it would be really nice for you to give me a call every now and then. I wouldn’t want to take up too much of your time and, while I may be retired, I do keep myself busy. Nevertheless, a short chat to keep me in the loop… maybe as an alternative to one of the 40-page quarterly supporter magazines you send me, would be a good idea? Anyway, I’ve had enough so I’ve decided to call it a day. Yours faithfully, Name of Donor (Supporter reference number 5439) P.S. Awfully sorry if it’s a lady who is reading this letter. I would have liked to have addressed the letter personally, but unfortunately you’ve never given me your name. One overarching impression I had when I finished this letter is summed up in the following thought: “It didn’t have to be this way.” This lady – this good donor – did not have to be a stranger. But she had become one for one simple reason: She was just a source of cash, rather than a partner in the cause. Jeff and I find that this is happening far too often in non-profits around the world. And the key way to know if it is happening in your organization is to do a little research. If it takes longer to thank the donor than it does to bank the money, you have a problem. Let me explain. In many non-profits that have allowed me to look on the inside, I find elaborate systems to bank the money, regardless of how it comes in or what form it is in, i.e., cash, check, credit, debit, etc. The money hits the organization and, “bam,” it’s in the bank and ready to be used. Meanwhile, the donor data sits on a desk somewhere waiting to be processed, sometimes taking days, weeks and even months. Two weeks ago I sat in a meeting on the topic of donor value attrition with some executives of a leading non-profit. We were processing the reality that over $9 million had been lost from good donors over the last two years and that the two reasons for the 60% value attrition they were experiencing were: (a) they were not telling the donor that his or her gift made a difference, and (b) they were not handling the thank-you process in a donor-centered way. After I finished saying my bit, one of the executives reached into his briefcase and pulled out a receipt and said, “And here is an example of what Richard is saying. It is now October and just yesterday I got this receipt and thank you letter for a gift I made back in August!” I about fell out of my chair. There it was – the smoking gun. Proof of how they had failed the donor – evidence for the case on why $9 million went away. When are we going to learn that treating donors as sources of cash just does not work? I just do not understand it. I really don’t. The scary part of all of this is that more donors than you know are thinking these kinds of thoughts. They are having the feeling that they have become strangers, only valued for what they can give and not valued for the dreams they have for a hurting world that they care about so much. You know what it feels like to be treated as a means to an end – to be used as a “tool” to accomplish someone else’s purpose. It does not feel good. So stop whatever is happening in your organization that is pushing your good donors into stranger status. It will honor them and also help you reach your financial goals.

Operating Principle Two: Money Transfers Value – Money is a result, not an objective Before money existed, barter was the way people secured and sold goods and services. I gave you five chickens and you gave me a bag of potatoes in return. Successful “deals” happened when both parties believed they were receiving equal or greater value for what they were giving to the other party. The interesting thing about bartering is that it was the person’s labor, along with nature and the good earth, which actually caused the animals, goods or services to come into existence. This made the whole thing very personal. I worked hard to grow those potatoes. And you worked hard to raise those chickens. So it was personal. I was giving you the fruit of my labor. It is no different today. Money, essentially, comes from work. You put out your labor. You get money. And the way you get the things you’re interested in done is to “pay someone else to do it.” It is personal. You are very concerned about the devastating effects of cancer or your friend or relative has died of cancer so you have an intention to DO something about it. You give your money to someone you trust to “take care of it.” You would do it yourself if you could or you knew what to do. But instead you transfer your labor to another to “take care of things.” It IS personal. That is why when your donated labor - uh money - is misused, you are upset. It is personal. You gave yourself to someone else’s care to take care of something you are both interested in and the other party messed it up. Very frustrating. This truth is important to understand in major gift fundraising – in all fundraising, for that matter. A donation is simply a way a donor transfers their personhood – their essence - toward something they deeply care about. Money transfers values. If you understand this correctly, then you understand why it is so important to: 1. Be sure you understand what the donor is interested and passionate about. You do not want to misfire on this one – so I’ll address it further below. 2. Be very careful that your promise about what the donor’s giving will do is something you are sure you can deliver on. 3. Be very quick to thank the donor the second her gift arrives in your office. 4. Be very very very quick to report back on the difference the donor’s gift made – and report back more than once so the donor knows that good continues to happen. Remember, it’s not the money the donor is worried about. It is knowing that what you promised would happen as a result of her gift actually happened. That is what matters. Money is not the objective. It is the result of fulfilling donor passions and interests. So if you are not getting the money, check on how you are doing in understanding and fulfilling what the donor is interested in. That is where the failure is likely to be. How to Identify Donor Passions and Interests The donor’s interests and passions are the most strategic and critical pieces of information in major gift fundraising. A major gift officer cannot expect to be successful in her job if she doesn’t have this information. It is the main driver of everything she does with each donor on her caseload. In the commercial world, businesses spend millions of dollars finding out customer preferences, desires, leanings, etc. Why? Because if they just offer their product for sale without this knowledge, the chances of actually causing a transaction are far less – which means wasted sales and marketing dollars, and less profit. There is nothing like matching the features and benefits of a product to the needs, wants and interests of a potential customer. One of the continuing discussions we at Veritus have with MGOs is on this very subject. Here is how a typical conversation goes: Veritus: “Have you identified the interests and passions of the donor?” MGO: “Sure have. They just love (insert name and mission of the MGO’s organization).” Veritus: “Well, of course they do. That’s why they responded to the original donor acquisition message and came on board. They chose you, in addition to the other organizations they want to support. But that is not enough information for your work.” MGO: “What do you mean? Isn’t it enough to know that they want to support the mission of the organization?” Veritus: “No. The organization fulfills its mission by doing (insert anywhere from 6 to 25) distinct services and programs. Do you know which one of those distinct services or programs the donor is interested in? And once you uncover that, there is an underlying reason for that particular interest that you need to know. Do you know any of this information?” MGO: “No, I don’t. How do I find out?” To be fair, many MGOs do know more information than I am representing here. But in almost every case, they could know more. It is important to have this information because a donor’s interests and passions are the main drivers for their giving. Seems obvious, doesn’t it? I mean, a donor wouldn’t give to something she wasn’t interested in, would she? Hardly ever. I remember one donor who was giving generously to a drug rehabilitation program. Why? Because he lost his son in a drug overdose. He hoped that he could redeem the situation in some small way by helping another “son” find his way out of drug addiction. People give for so many reasons, and it is your job as a MGO to find out why – because when you do, you can serve that donor so much better in his quest to fulfill his interests and passions. So, how do you uncover a donor’s interests and passions? Let me suggest this process: First, build a relationship of trust where you clarify what you are doing. This is best done by convincing the donor, through your behavior and also your words, that your major objective with him is to help him fulfill his interests and passions. This may sound rather lofty and noble, and unbelievable to the donor. But here is how you could frame it at an appropriate time in the relationship: “You know, Name, my job at the organization is to raise money for our programs. So in that sense, you might think that all I am interested in is your money. I understand how you could come to that conclusion. You could easily be frustrated by all the people who seem to be interested in your money, rather than being interested in you. Our fundraising programs don’t come from that place at all. We believe that the path to securing resources for the programs we operate is one where we serve the interests and passions of our donors. My objective is to understand what drives your giving – what you are interested in – and then take that information and find a program of ours that matches well. If I can do that successfully, you will fulfill your interests and passions by working with us to address a pressing need on our planet. So as I get to know you better, that is what I am trying to do.” Jeff and I think that some form of this messaging, one that fits your personality and style, is what the donor needs to hear about your relationship with him. That is the first point – clarifying what you are up to in the relationship. Making it clear that your relationship is fundamentally not about the money. It is about fulfilling the donor’s interests and passions. The next step is securing information. Easy to say, I know. But executing this step is as much an art as it is a science. The science part is asking “what are you interested in” and “why are you interested in that?” It is only these two points, the what and the why. The “art” part is doing the information gathering in a manner that is respectful, careful and persistent. You can’t just barrel into the relationship and start an inquisition with the donor. You have start slowly and work on it over time, building relationship and trust as you go along. Think about this in phases: Phase 1 is explaining what you are up to – the first point above. Phase 2 is having a menu of all the things your organization does on a list – I mean the categories of programs. Not just the big 2 or 3 categories, but all the subcategories as well. One client of ours has a master list of 23 categories. When you look at that list you have a full menu of interest possibilities. So create that list with your leadership. Phase 3 is asking the donor what she is interested in. She is likely to identify a larger category of activity or even say that she doesn’t have a specific interest – that she “just loves supporting the organization.” If she does that, then say: “That’s wonderful, Name. But as you know, the major program areas we have are (read major areas). Is one of these more interesting to you than the others?” And try to get her to identify at least one. When she does identify one, you can go on to say: “That’s great, Name, and there are five things in that category [go through them]. Does one or more of these programs interest you more than the others?” And you talk about it. Now, I know that when you read this, it sounds stilted and formulaic. That’s because you are reading it. But if you do it over time, and if you take your time doing it naturally, it can be a very relational information-gathering experience, which is what it needs to be. This phase alone may take months. Take your time. But you need to be sensitively persistent – always probing and trying to secure the answer. Phase 4 is asking the donor the “why” question. This is taking things to a deeper level, and it requires time and very careful handling. One way I have done this in the past is to tell the donor why I give to things or why I make certain choices. I then follow it by asking: “You know, Name, I’m curious as to why you are interested in supporting (the interest identified earlier). Is there an underlying reason that that area has become a focus of yours?” And again you take your time (even weeks or months) to find out this information. The key thing to this process is winning the donor’s confidence about what you are doing and why you want to secure this information. You’re doing this, quite simply, to serve the donor better in fulfilling her interests and passions. If you, sincerely and with integrity, can help the donor understand your intentions and motives in this area, you will find that she will tell you what you want to know. But I emphasize the words “sincerely and with integrity.” Because if you take the counsel I am giving you here and you use it to manipulate the donor, you will not succeed. Why? Because your intention to manipulate will ooze out of your pores, and the donor will turn and run away from you. So watch your heart and your motives as you seek to serve your donor better. And take the pressure you feel to reach financial goals and redirect that pressure toward learning more about each donor on your caseload.

Remember, Donors Are Your Mission Too

Veritus Group definition of “A Culture of Philanthropy” From your CEO down to the janitor, your non-profit embraces your donors as central to your mission, as central as your organization’s programs to change the world.

We are aware that this is a radical concept. But it’s a concept whose time has come. Organizations that view donors as just a means to an end will not flourish and grow. In fact, they may become extinct in the next decade, if they don’t see donors as an equal part of their mission as what they do to change the world. If you have worked with major donors for any length of time, you should be well aware of what happens to your donors when they make a gift. It makes them happy. It helps them feel they are helping to change the world. It transforms them. That is powerful stuff. Unfortunately, the non-profit world hasn’t grasped this quite yet. If we did, we would change the way we relate to donors. We would make them our mission. If we made donors our mission, the entire way we communicate – our policies, how we spend our resources and how we report back the impact we are making – would radically change. Here is what it would look like if you made donors your mission. 1. Your mission statement (yep, dig it out of that file under your desk), would actually include a mention of donors. To date, we have not seen a non-profit mission statement that says anything about donors. I would love someone to show us one. 2. Your focus would be on impact, rather than ratios. Impact is what donors care about. Ratios is what watchdogs care about. Just a warning: if you make donors your mission, your overhead is going to go up. But your impact is going to increase too, because you will be accountable to donors, not watchdog groups. 3. Half of your time, resources and energy as an organization is devoted to donors. Yes, this is a radical statement. But if you truly report on impact, provide great customer service and give the donor an amazing experience as they deepen their relationship with you, it will take time and money. 4. Donors will have a seat at the table. Making donors your mission means allowing them to have input on what you do and how you do it. That’s really scary to some of you! But think about the impact this would have on your organization, to have donors who are really engaged with what you do to change the world. 5. Everyone in your organization would have relationships with donors. This would no longer be exclusively the CEO, Development Director or MGOs. It would mean program people, finance, and the front desk person too. All people in your organization would know that donors are just as important as what they do every day. 6. Donors would be celebrated in your organization. Just as you celebrate certain milestones or accomplishments in your organization, so too would you celebrate donors in a myriad of ways to show the donor how central they are to your mission – and to show employees this as well. 7. You will ask boldly for your donors’ support. If donors are your mission, then asking them to fund what you do is expected. In this type of culture, your donors will be overwhelmingly supportive of your efforts to make a difference in the world. Understanding that your donors are your mission puts YOU in a special place. You as the MGO are put in the unique position to be that bridge between your donors’ greatest desires and needs to change the world, and the need your organization is trying to alleviate. That is an awesome responsibility, and one that can only be fully expressed if your donor is your mission. Not just your mission, but also the mission of everyone in your organization. Make donors the mission of your organization. This reality is why Jeff and I place this trait – viewing donors as partners – as a critical piece of a healthy relationship with the donors on your caseload. Please take this all in and then let it affect how you think and act towards donors.

Operating Principle Three: Donors Want to Keep Giving Sometimes when we’re looking at where our organization’s revenue growth is going to come from, we look in the wrong place. We get so enamored with “new donors or new money” that we fail to cultivate and steward the donors we have. If you’d just listen to Crosby, Stills and Nash and their song “Love the One You’re With,” your major gift program would start to flourish and really take root. But we can’t seem to get it in our heads that this is exactly what we need to do. Here is what seems to divert our attention: • The ED tells the MGO that “there are a lot of wealthy people in town, I want you to bring us some.” Disaster! The MGO goes out chasing money, rather than building relationships with his caseload of donors. • The organization has dozens of events to bring in new donors that the MGO is expected to “help” with. So the caseload gets neglected because the MGO is running out to the party store to get napkins and paper plates. • Even though the MGO has a full caseload of donors, the CEO tells the MGO he needs to do more prospecting and she expects that 25% of his time should be dedicated to finding new major donors — and because the MGO has NO discipline, that 25% turns into 75%. Revenue plummets, retention tanks, and everyone wonders why major gift revenue is so behind. In our experience, it turns out that it’s MUCH more likely for a non-profit to experience growth in giving because they’re staying engaged with their current donors who have the inclination and capacity to give more each year. By staying focused on retaining and growing the value that current donors bring to the table year over year, you will find yourself creating goals for every donor, a strategy to obtain those goals, and a disciplined communication strategy that is designed to cultivate and steward donors. This will result in building solid relationships and ultimately significant gifts to your organization. But your focus has to be your current caseload of donors. Not the “rich woman” on the other side of town who has a ton of capacity. Don’t allow yourself to stray off the path of minding your portfolio of donors. Again, your focus needs to be on relationship-building, retention, upgrading, retention, casting a vision, retention, helping donors find joy, retention, challenging donors to higher levels of giving, retention, providing outstanding donor service and finally, retention. If you focus your energy on that, you will be wildly successful and your donors will find joy and fulfillment in their giving. Don’t be deceived by the promise of the shiny new object (“there’s gold out there if we just mined it”). No, there is gold right here in your own donor base and in your current caseload. Don’t “mine” new donors; MIND your current donors. The Problem with the Annual Appeal I have no idea how it got started and maybe someone reading this can explain it to me. It’s the annual appeal – a concept that is so outdated and impractical that I wonder why anyone who really thinks about it would continue to use it. OK, it does have some benefits….but listen to what I have to say about it and see if you agree. The annual appeal concept is one that holds to the idea that donors give one time, once a year, hence the words “annual gift” or the question, “Have the donors made their annual gifts yet?” Fundraising programs built on this philosophy look to secure that one gift once a year and then the work is finished. This is so interesting to me! There are several things wrong with this concept: • It places the donor into a one-time event mentality vs. an ongoing relationship. Oh, I know, there will be a lot of ongoing communication, but the actual transaction has the donor thinking “It’s that time of year again” vs. thinking and feeling that tackling “this situation I am giving to” is an ongoing, year- round relationship. This is subtle, I know, but Jeff and I believe there is a material difference in the two approaches. • It focuses the donor on his or herself vs. the cause. You might want to argue this point, but hear me out. The annual gift approach focuses everything on a specific time and what the donor is going to do or not do vs. the non-stop dynamics of meeting a need. • It motivates the MGO to “check on giving” less frequently, which means there is lost communication and contact opportunity. Believe me, when all the MGO is looking for is that annual gift, the frequency and quality of ongoing communication goes down. • It substantially suppresses the giving of the donor. Whoa! How does that work? Well, again, this is subtle but true. If the communication strategy to a donor is leading up to one annual gift, the amount of that gift will be lower than if the donor had been approached multiple times for multiple gifts. Many donor files of progressive non-profits have donors that give anywhere, on average, from 2.3 to 15 times a year. Granted, the range of most frequent giving is about 3-5 times a year. The total cumulative giving from this donor vs. the one time donor is, on average, higher. So the annual approach is actually losing money AND the opportunity to relate more frequently to the donor, which is also a benefit. Think about this another way. Most everything we do financially is scheduled on a monthly basis, if not more frequently. 1. We pay bills on a monthly basis. 2. We get paid on a monthly or bi-weekly basis. 3. Certain faith practices ask people to tithe every month. 4. We look at calendar events and transactions on a monthly basis. Since this is true, why would you have a relationship that is based on an annual transaction? I really don’t know, but it is a practice that is out there and trying to work for some. While it is true that some donors prefer to give once a year, Jeff and I suggest you think about them and treat them with at minimum a monthly touch so that the cadence of the relationship is frequent and the nature of the relationship is warm and intimate. Remember, major gifts is NOT about the money – it is about a partnership with a donor to see that good is done in our world. This truth requires that you be in touch regularly and that your focus be on the relationship and the cause vs. the transaction. I have underlined and bolded that last phrase because THIS is what your objective should be – building relationship around the cause. This is a fulltime, year round job – NOT an annual event. This is about taking care of a need, NOT securing a transaction. So, if you are in that annual giving mode, consider moving out of it. I think it will increase your revenue and, more importantly, change how you relate to donors.

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Veritus Group is a full-service mid and major gift consulting agency serving non-profits all over the world. Through our Major Gift Academy, we strengthen development professionals and non-profit major gift programs with a donor-centered philosophy that is focused on accountability.

You can reach us on the Web at www.majorgiftacademy.com and www.veritusgroup.com.