There Is No Secret Sauce: Build a Relationship, See Growth
A good portion of my time during the week is reviewing major gift donor data that our analyst crunches for us to present to prospective clients.
One part of our analysis is to review individual gift officer portfolio performance. Over the years, I’ve seen a similar trend: When tracking overall revenue from a portfolio over a period of four years, we see very little growth over that time period.
When we talk to leaders, managers and major gift officers on why they believe they are not seeing growth, it’s apparent by their answers, which leads us to one major conclusion: There is no real relationship with the donor.
You can see it glaring at you in the data. This is what it looks like:
- High-donor attrition. I see donors giving a really nice gift four years ago and then nothing for the next three consecutive years or donors who gave three years ago, then nothing… and so on.
- High-donor value attrition. I see donors giving $25,000 four years ago and, each year, giving less and less so that by the current year, it’s down to $5,000 a year.
- Same year-over-year giving. The major gift portfolio is full of donors who, over the course of four years, give the same amount year after year.
- High proportion of low four- and five-figure gifts. The portfolio is about 95% to 98% made up of smaller major gifts.
So, when I sit down with the major gift officer and ask them to tell me the story behind the donors and their giving, I encounter an awkward silence and the lack of eye contact. This is because the major gift officer does not know the story—he or she doesn’t know the donor.
When you don’t know the donor, you don’t know what their passion and interests are. And if you don’t know their passion and interests, you cannot match them with the programs and projects you have that are changing the world and inspire them to give at greater and deeper levels.
It’s really that simple.
Developing a good relationship with your donor gains his or her trust. When the donor trusts you, this is where the magic happens.
And this doesn’t just apply to the nonprofit sector.
Just the other day, I was reading an article from a wealth management investment portfolio manager. He was writing about retaining clients and what study after study has shown to be the most effective way to keep and gain more of a client’s assets to manage… yep, you got it… having a solid relationship with that person.
Amazingly, having the right products or the investment percentage gain year over year was not the client’s main driver to stay with their wealth advisor; it was whether they had a good relationship with them and whether or not they trust in them.
So, it doesn’t matter if it’s the for-profit or nonprofit world; building relationships with your donors, and developing their trust will retain and grow your portfolio.
This is why, at Veritus, we constantly stress relationship-building. All the work we do with helping nonprofits build a structure, provide accountability and focus for the major gift officer is all centered on building relationships and trust with the donor.
There is no secret sauce here. Yet, we find that leaders and managers are always trying to find that elusive sauce. The best thing you can do right now is pull out a report that lists all of your donors in your portfolio and one by one, ask yourself:
- Do you know the donor?
- Do you know their story?
- Do you know their passion and interests?
- Does the donor trust you?
Be honest. If you find you don’t know your donors and don’t have their trust, start working on that today. Remember, when a donor trusts you, this is where the magic happens.
If you like baseball, tennis, golf, Gregorian chant, jazz, rock, good wine and deep conversation, then you’ll like to hang out with Jeff.
If you are passionate about fundraising, Jeff will inspire you to be a true “broker of love” for your donors, helping you bring together a donor’s desire to change the world and the world’s greatest needs. Jeff believes that if nonprofits truly want to grow and obtain more net revenue for their mission, it will come through creating, building and successfully managing major-gift programs. The Connections blog will give you inspiration and practical advice to help you succeed. Jeff has more than 25 years of nonprofit fundraising experience and is senior partner of the Veritus Group.