#4 – How Do 150 Qualified Donors Relate To Cost?
“Look, I know I have 150 donors on my caseload, but I need to add these two couples I met at the event today. They are very wealthy and I know they could give a very large gift!”
I’ve heard some form of this statement hundreds of times from MGOs in many good non-profits around the country. And it seems like a reasonable statement to make. When a MGO meets a wealthy prospect, who they believe has expressed some interest in the organization, it just seems like the right thing to do. I mean, you are just months away from a $1 million dollar gift, right?
There are several important reasons this is not true:
- A qualified donor on your caseload is worth more than one that isn’t.
- You don’t have the time to do this.
- Using your labor this way is a waste of money.
Let me un-pack these three points.
A qualified donor on your caseload is worth more than one that isn’t. If you have qualified the donors on your caseload properly you have a good group of people who have shown inclination and capacity. Inclination means recency (they gave recently) and amount of giving. You know what capacity means. Why would you trade a good current donor for a promise of one? If you stop and think about it, you wouldn’t.
You don’t have time to do this. Take a look at this chart that basically concludes you have 18 days or less a month to deal with the good donors on your caseload. 18 days!
Here’s how I get to this number. You start with the 365 days we all have each year and subtract weekend days (not saying you may work some weekends). Now you have 261 week days left. Then take off 50 vacation and holidays and the days you are required to spend in the office, a category I call business days. You might not have a lot of vacation or holidays but, believe me, I know those days really add up.
In fact, on this point, I have to say that I do not understand managers who require their major gift people to be in so many meetings which rob their MGOs of precious donor time. Some of the meetings are necessary. Most are not. MGOs belong with donors, not in meetings.
Using your labor this way is a waste of time. On the post just before this one, I showed you how to calculate the cost to service each donor by adding up the total cost of your major gift unit and dividing it by the number of qualified donors on your caseload. The point of that exercise was to show that it costs quite a bit of money to service just ONE of your donors – money that you can not afford to waste.
Remember, you put that donor on your caseload because you felt they would contribute a value greater than the cost – in fact a multiple greater than the cost, meaning, at least, a 3:1 to 10:1 ratio of revenue to cost.
So, if what I am saying is true and you believe it, then why would you waste your precious time chasing a potential donor that “has a lot of capacity” but has really not proven inclination, i.e. current giving at a level that meets your criteria? You wouldn’t.
So, why do MGOs have the urge to do this kind of thing? Probably for the same reason people buy lottery tickets. They think they will win. And the sad fact is that by diverting your time and effort over to prospecting you have run out of time to serve the good donors who are already with you. Chances are, because of your neglect, some of those donors will now go away and the value of your caseload will drop somewhere between 30-60%!
This means that if you caseload value was $1,000,000 last year it will likely be $400,000 to $700,000 this year, from the same people – all because you didn’t pay attention to your current qualified donors. And the cost of that diversion is going to be embarrassingly enormous!!
So, avoid the urge to buy that lottery ticket, remembering that very few people actually win. Instead, stick with those good donors who are currently with you. They are the ones who have shown, by their behavior, that they care about what you are doing. Honor them with your care and attention. It’s the right thing to do and it will have economic benefit.