The Six Boring Indispensables of Major Gifts – #2: Valuing Administrative Support

Why is it that so many MGOs suffer without proper support when smart leaders and managers know that delegating work and having support to get that work done is the most efficient and effective way to reach their objective?

There could be several explanations:

  • They really don’t know that there is more potential in the donors that the MGO is managing so why not just have the MGO do everything?
  • They know there is more potential, but they don’t really believe the MGO can harvest that potential, so why waste the money on support?
  • They themselves are hands on workers (and probably not very effective ones), so they really don’t understand the dynamic of delegation and division of labor.
  • They are financially conservative and risk aversive, so adding labor that doesn’t “directly” raise money seems counter-intuitive.
  • They just don’t understand the economics of it, i.e., that it is a good investment to give a MGO a support person for administrative and research work, freeing him or her to be with donors.

It could be any of these.  But, in my experience, it is mostly a lack of understanding of the economics.

Obviously, if you are in a “solo shop” where you have to do everything and your caseload is only, say, 40 donors with an average annual value of $2500 each and hardly any more capacity to do more, then one could not reasonably argue that spending money on support would make sense.

But, what if, in that same situation, the 40 donor caseload could, through proper management and cultivation, grow to 70 donors with an average annual value of $5000 each and 10 of those 70 donors having substantial capacity?  I would argue that you should add a support person right away!  Why?  Because there is enough economic potential to move the current annual value of $350,000 to $500,000 or $600,000 and the only thing holding it all back is the MGO having the time to do it.

One of our blog followers, Susan C., wrote, in response to the last blog, that she needed to build a case with her board and ED for how income would increase by adding administrative support.  She wanted our ideas on how to do it.

I said that the most convincing argument I have used, which works most of the time, is to do two things:

  1. Figure out how much past donor revenue has been lost due to not having the time to cultivate donors.  If you take all the donors that have gone away in the past two years and subtract those that have passed away, moved, said they don’t want to be involved etc., then you have to come to some conclusion as to why the remaining donors simply went away.  And that leads me back to the major reason for donor attrition:  The donors did not know they were making a difference.”  And why?  Because the MGO did not have the time to tell them. They were too busy stuffing envelopes and setting up tables and chairs for some event that was revenue neutral or several dozen other time wasters that someone outside themselves insisted they be involved in.  Just add up that revenue and see what number you get to.  It is amazing!
  2.  Calculate potential caseload revenue that could be secured IF you had the time.  Here is how I suggest you get to that number, which you may want to argue with me on and I welcome it.  Uncover the total annual value of your current caseload by simply adding up how much each donor on the caseload gave last year.  Let’s say that in your case the number is $600,000.  Now multiply that number by 30% to 40%, bringing it to $180,000 to $240,000.  This is what I believe is the range of additional revenue you could get IF you had the time to spend quality time with your donors.  You would be spending time upgrading some of the donors in a more effective way and you would have the time to secure much larger gifts from three or four donors who have potential.  Believe me, it’s true.

Now, if you total those two numbers together – the money lost and the potential – you arrive at a tidy sum of money that, I think, a good manager would see provides room for administrative support.

I know what you are thinking.  “Hey, Richard. There is no way I will get 30% or even 40% more revenue from my caseload!  No way!”

Well, I can share with you a number of times when we had this exact situation.  We successfully argued the case, using the points above.  We secured the support, and in the first year one $5000 a year donor gave $1 million, another $2,500 a year donor gave $350,000. And that was already on top of a caseload that was delivering revenue of $850,000 a year.

Why, specifically, did this work?  Because the MGO had the time to focus entirely on her donors.  And that time translated into added revenue.

This is not magic.  It is simply logic.  I wish I had a way to get in front of every manager who is holding back on this one point.  If I could just sit with that person and, using the MGO’s caseload, argue the point, I think I could convince him or her to add support.

I truly believe this situation is one that springs from ignorance vs. stubbornness or belligerence,  although I have seen the latter operational in a number of major gift scenarios.

We just do not value support people.  We really don’t.  And one of my professional goals is to build an economic argument on why we should.  As we all know, money talks.  So I aim to categorically show that an investment made in support of an MGO will actually bring in far more revenue than the cost.  Look for this piece of work to come out in the next few months.

In the meantime, use the logic and arguments I have indicated above.  I think it will work for you.  It will put you in a place where you have the time to truly care for your good donors, a subject very close to Jeff’s and my heart.

If, after you make the case, the authority figure in your life wants to keep things status quo, then he or she should be happy with lower revenue.

Oh, and one more thing.  We have prepared a very practical chart that shows the division of labor between a Director of Development, the MGO and the Admin support person.  It shows how we suggest organizing major gift work for each position.  Write us at rperry@veritusgroup.com and we will email you a copy.

Richard

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About Jeff Schreifels and Richard Perry

Jeff Schreifels and Richard Perry have over 55 years of experience fundraising for non-profits. Richard Perry was co-owner of Domain Group until 2005. Jeff Schreifels was a Senior Strategist for Domain Group for 12 years. They came together a few years ago to start Veritus Group, a full-service major gift fundraising agency. Veritus Group has a unique, data-driven approach unlike any agency focused on major gifts. Jeff and Richard are passionate about their work, passionate about life and hopes this blog will provide you with insights and tangible benefits for you and your work. Thank you for reading!
This entry was posted in Development Directors, Hiring, Major Gift Officers, Non-Profits and tagged , . Bookmark the permalink.

7 Responses to The Six Boring Indispensables of Major Gifts – #2: Valuing Administrative Support

  1. Judy Anderson says:

    Hi there-
    Good points that are true for many small organizations in general; especially the small nonprofit with one or two staff. They too have a hard time transitioning to a team approach because of a shortage of funds and, perhaps more true, a sense that they will get over extended. So often, it takes the start-up capital to make a transition like this to hire the additional staff. I have found that establishing the vision, and then working to reserve the funds (for small nonprofits) over a two year period, can help. I’d love to see your division of labor concepts.

  2. I totally agree. I’d love to see the division of labor concepts.

  3. Janet Schutt says:

    Very interesting article. I’d love to get a copy of your division of labor chart.

  4. this was so helpful as i am exactly in this situation..not a full time fundraiser myself but the honorary director with about 5 different jobs and i have realised very clearly lately that we could have raised a lot more funds if i had extra help. Now to convince my board…thanks for these tips 🙂

  5. Calvin Coolidge says:

    This is great! Thank you. I too would enjoy seeing a copy of your division of labor chart.

  6. Jennifer Hamon says:

    Without a doubt the most realistic and insightful comments on this topic – hands down! Half the battle is educating others!

    I would be grateful for the copy of your ‘division of labor” chart. Thank you!

  7. Pingback: How Are Your Plans Coming Along?—1st Quarter Check-In | Passionate Giving

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