RISK AND REWARD

Response to a Response (Unearthing Major Gift Donors BLOG): Yes, Gretchen, there is such a thing as risk (and reward) in major gift staffing.

All organizations should constantly do short-term and long-term cost-benefit analysis of various fundraising methods. Direct mail, high dollar mail, foundation grants, events, major gifts and other mechanisms carry different risk and response. Besides measuring staff and monetary performance versus budgetary risk, the hard part is making choices at the convergence points of performance and risk.

For example, direct mail may garner up to a 15 percent response rate, with one or two percent a great rate for new acquisitions. Annual mail and high dollar mail have a far better response rate and move supporters up the donor pyramid. A telephone call can have a 50 percent response rate when applied to the right program or for the right organization, although 15 – 25 percent is the normal range.

Major gifts, extremely generous gifts above and beyond annual support, are investments in the organization. Done with the respect such support merits, face-to-face solicitation can yield a 75 – 80 percent success rate.

The key to getting major gifts is asking for them. Face-to-face personal solicitations are 10 times as effective as mail and five times as effective as a personal phone call, which is why it is cost effective to have major gift officers on staff.

There are a few caveats for gauging major gift performance: The non-profit organization must have a compelling case and be operating in a professional manner. Sufficient prospects with significant potential must be identified and researched. Leadership volunteers, who demonstrate their commitment by asking their peers to join them in financial support, must be committed to the program. Supporters must be well-cultivated.

It’s all about nudging, which we’ll get to in a future BLOG.

If you’d like to discuss your major gifts program confidentially, feel free to call me.