Events, Major Gifts and Moving From Transactional to Transformational

I was recently talking to Susan, a development director for a regional nonprofit, and she was lamenting that she had another gala to put together. Even though this gala takes an enormous amount of time and effort from the staff, the executive director and the board want to keep it going because it brings in almost half of their revenue each year.

What was interesting is that Susan wasn’t upset about all the time and effort it took to pull it off each year, but the fact that the revenue generated by the event was really in transactional gifts—not, in her words, “mission-oriented” gifts.

“Jeff, I don’t I really have a major gift program," she said. "Our staff is so busy with the gala and about 10 small events all year that I really have no time to sit down and talk to donors. While I do meet them at these events, we never get beyond the regular chit-chat. Yet these donors give fairly significant gifts, but we’ve never been able to move them beyond giving at the events.”

Then, she concluded by asking, “How do I move this organization from just thinking about getting donations to building relationships with donors who could have a major impact on this organization?”

This is a tough question. Are you grappling with this?

I had another good conversation the other day with Ryan, a major gift officer (MGO) of a high profile organization that helps low-income folks in the U.S. Ryan learned major gift fundraising at a university. He told me that his training at a university was all about getting a gift and not about building a relationship. He said that he was basically given a list of donors and told to go out and renew their annual gifts. Then, each year, he was told to increase those gifts by 10 percent.

There was no mention of creating a relationship with the donor. There was no mention of bringing projects and programs to the donor in order to inspire them and challenge them to make a real investment in the university. Ryan told me that it took almost two years at his current organization to learn how to really form relationships with donors, rather than to pick up a check whenever he visits the donor.

“Jeff, it was really hard for me to get out of this mindset of just getting a check so they could renew their giving," he said. "But my boss was patient and urged me to get to know my donors and to know the programs we have. Now, because I’ve established strong relationships with donors, I’m asking for six- and seven-figure gifts! When I look back at my university experience, I know I could have done the same thing. These $10,000 donors the university wrote off as not major donors could have given much more had I spent more time with them.”

Ryan really identified the problem with many nonprofits. There is so much pressure to make a number that, instead of developing a real plan for every donor, getting to know them and match their passion and interests with the programs, fundraisers are literally forced to go after a transaction with the donor, instead. Or, in the case of Susan’s organization, success is how much each of these events can bring in, rather than how she can inspire donors to make a transformational gift.

And, Susan is right. She really doesn’t have a major gift program. In her case, she has an event fundraising program that donors attend and make large gifts.

So, how do you move an organization from transactional to relationship fundraising? It takes hard work and time. However, I’ve seen it done.

Four years ago, I worked with an organization that was very much like Susan’s nonprofit: lots of events, very little personal relationships with donors. Donors were giving $5,000 and $10,000 gifts yearly. The organization decided to reduce the events by three-quarters. It developed strategic plans for every donor. It created revenue goals for every donor. The MGO’s job was to get to know donors and program. The CEO told the board that for the long-term health of the organization, it would have to move toward real major gift fundraising, but that it would take time—the organization had to be patient and let its fundraisers develop relationships.

Today, that organization’s major gift program is thriving. Revenue has increased dramatically, and donors are no longer doing transaction giving but transformation giving. Really investing in impact!

If transaction giving is happening at your organization, you can do something to change it. It takes leadership and work, but it can be done. The result will be dramatic. This is what major gift fundraising is all about.