What Should Your Total Caseload Value Be?
I have seen so many situations in which a major-gifts officer (MGO) gets unfairly judged because no one sat down and decided what the MGO's caseload value (the sum of all giving from all the donors on a caseload) should be. And when this very critical economic topic is not managed, it is a recipe for many arguments, debates and disappointments.
Over the years, I've seen caseload values where one MGO manages a group of donors and the sum of these donors' giving is as low as $150,000 and as high as $8 million and 10 million! And this is for caseloads that do not exceed the 150-donor size we recommend. Sometimes they are less than that — as low as 10 donors.
There are a lot of variables to be sure — not the least of which is the type of institution, the cause, and type of offers and asks. But I want to, in this post, set forth the most common caseload value metrics we see out in the marketplace.
There are two audiences who should be interested in caseload value — management and the MGO. Management needs to know that there is a reasonable return on investment. The MGO needs to know that he or she is actually meeting expectations.
But what is the right number?
My first rule of thumb is to look at ROI. Jeff and I have said that the ROI for a direct-mail program these days is in the 1:3 to 1:4 range — $1 out, $3 or $4 back. If an MGO is just starting, I would be happy with a ROI that is the same as direct mail, leaning toward the 1:4 number.
Remember, on the expense side, to include:
- MGO compensation
- MGO support compensation
- Office expenses
- Travel and entertainment/major-donor expenses
As the program matures, the ROI should rise to 1:5, then 1:8 and finally 1:10 or more. I've seen ROIs as high as 1:20!
So if the total expenses are $150,000, then the caseload value should be $1.5 million. How long should this take? Two to four years. And, for most situations, the following yearly performance targets should be right on the mark:
- Year 1 - $400,000 to $600,000
- Year 2 - $500,000 to $750,000
- Year 3 - $800,000 to $1 million+
- Year 4 - $1 million to $1.5 million+
I'd like to hear what your experience is in this area. Do these numbers look like your situation?
One thing for sure — it is very important to have a clear handle on what your caseload value currently is and if that number is meeting the expectations of management.
If you're a manager reading this, please take the time to have a discussion with your good MGO and arrive at a mutually acceptable number for his or her caseload. It will build confidence and help the MGO focus on taking care of donors, which is exactly what you want.
If you’re hanging with Richard it won’t be long before you’ll be laughing.
He always finds something funny in everything. But when the conversation is about people, their money and giving, you’ll find a deeply caring counselor who helps donors fulfill their passions and interests. Richard believes that successful major-gift fundraising is not fundamentally about securing revenue for good causes. Instead it is about helping donors express who they are through their giving. The Connections blog will provide practical information on how to do this successfully. Richard has more than 30 years of nonprofit leadership and fundraising experience, and is founding partner of the Veritus Group.