Welcome back to the Major Gifts Challenge! If you’re unfamiliar with the Challenge, check out the introductory video here.
Let’s not sugarcoat it… measuring impact can be hard. The issues we tackle in the nonprofit sector are challenging.
How Do You Know if You’re Making a Difference?
It’s difficult to measure a reduction in homelessness, an increase in literacy, or a decrease in child abuse.
Sometimes it’s hard to tell if you’re making any difference at all.
Measuring the success of your Major Gift program can be just as difficult. Sometimes the most obvious yard stick — dollars raised — only tells part of the picture.
Recently I interviewed someone for a development position. She was only at her previous job for six months, but claimed to have raised a million dollar gift shortly after arriving.
You and I both know the gift was the result of the hard work of a predecessor. Nevertheless, she was in the right place at the right time. She got credit for the gift.
So, how do we measure the impact or success of major gift work?
It’s especially difficult when you have anxious board members breathing down your neck to show results – in other words, dollars raised.
Dollars Raised Isn’t Everything
Here’s another example of when dollars raised doesn’t tell the whole story.
In year one, you have 10 donors who each give $10,000. You report to the board that you’ve raised $100,000. They are happy. Great job!
The very next year, one of the donors from last year increases her giving to $100,000, but the other 9 donors don’t give again. For the second year in a row, you’ve raised $100,000. Again, the board is happy and believes you’ve done a great job.
However, because you’re not reporting on anything other than dollars raised, no one notices that 9 of your donors didn’t return. No one asks what happened to them or even makes an effort to get them back.
I realize this is an extreme example, but it’s what happens every day when development professionals and boards don’t measure things like retention, attrition, and more.
4 Metrics You Must Measure
So what should you measure?
Retention measures the health of your Major Gift Program. The vital signs in this metric are:
- The percentage of major donors who give year after year
- The number who leave or reduce their giving
In simple terms, it’s the number of donors you keep.
Taking into account “natural attrition” — in other words, death, moving, etc. — you should be keeping the vast majority of your major donors.
The national retention rate average for all donors (not only major donors) is in the low 40% range. That’s awful!
A healthy major gift donor retention rate should be 80% or better.
2. Dollars requested and received
Dollars requested and received measures the effectiveness of your major gift program.
If you asked 10 people for $10,000, you requested $100,000. If you received all you asked for then you probably played it safe and didn’t ask for enough. You could have asked more people for more dollars.
On the other hand, if you asked for $100,000, and raised less than 50%, you were too aggressive in terms those asked and the amounts you asked for.
Your program is effective when you get gifts from 80% of the people you ask, and about 80% of what you ask. If your numbers are much higher or lower, you may be playing it safe or being too aggressive.
3. Meaningful visits
You can’t ask for major gifts from behind your desk. You need to be out meeting with people and getting to know them.
Only you can determine the right number, but here’s an annual guideline: 12 meetings with donors is only one per month and 52 is one per week. Set a goal that works for you, and aim for somewhere between 12 and 52 per year.
4. Stewardship efforts
Stewardship, or the follow up after a gift has been received, is a good indicator of future gifts.
- First, send a thank you letter.
- Second, send a handwritten note.
- Third, make a call.
- Fourth, list them on your donor wall, in your newsletter, or on your website.
- Fifth, visit your donor to let them know how their gift was used.
Count the number of personal, meaningful stewardship efforts you make before asking for another gift.
If you’ve only made a few, cursory efforts, you need to steward your donor more before asking for another gift. If you have a robust stewardship program, it should be a good sign of things to come.
Now let’s look at where you’ll want to spend your time this week. This week’s Challenge Yourself Action Item involves two simple steps.
Challenge Yourself Action Item
Step 1: Download the free worksheet.
Download the METRICS WORKSHEET called How to Evaluate Your Major Gifts Program. This is one of the many worksheets provided to students who enroll in Mastering Major Gifts, my 7 week online step-by-step course.
Step 2: Determine your baseline and determine what you will measure.
Of course, you don’t want to spend all of your time measuring. But before you start raising major gifts, it’s important to know where you currently stand, and determine the metrics you will use to evaluate your major gift program.
Metrics will give you numbers… in addition to dollars raised, to report on.
Let’s face it, some years are better than others. But, if you can show overall upward trends and positive growth in the long run, major gifts will increase.
Going Further with Major Gifts
In Mastering Major Gifts, you’re given access to a complete metrics dashboard, as well as a detailed explanation about how to use it. It includes all of the metrics mentioned in this video, plus a few other key metrics, too.
In addition, Mastering Major Gifts students also receive support in determining which metrics are best to evaluate their program.
If you’re serious about raising major gifts, check out Mastering Major Gifts. This 7 week online course will supercharge and revolutionize your major gift program.
Act, Comment and Participate
Now, I want to hear from you. What do you track and measure? What does it tell you about your program? Join the conversation, and let me know in the comments.