Gift Officer Accelerator

The Problem You’re Trying to Solve

Every higher ed development leader walks a tightrope—she or he is responsible for achieving short-term fund-raising objectives without sacrificing long-term sustainability. What was once an 80/20 split in focus between today’s major donors and tomorrow’s future donors has become a 95/5 model. Some suggest it may even be 98/2. Why this shift? The answer is simple: on average, institutions generally report that their top 30 gifts represent almost two thirds of what they raise from donors.¹ This data highlights the importance of finding the sliver of alumni and other donors committed to advancing the mission of their alma mater who also actually have the means to make a major gift. This number is likely quite small. Depending upon the school, only 2-5% will even attain the level of wealth to make a major gift (which we can define as at least $100,000 over five years). 

The challenge of balancing the short-term with the long term is something major gift officers also struggle with, as the pressure to meet annual fundraising goals is growing every year. Yet, each officer only has a fixed inventory of hours in the day and working days in a fiscal year. Each allocates time to internal meetings, responding to emails, researching and preparing for visits, developing proposals and donor-specific strategies, documenting and following up on meetings. What’s left is the time officers have to cultivate personal relationships with their pipeline of qualified individuals and, eventually, implement thoughtful stewardship.

¹ Based on AEB analysis of  2014 – 2016 and various more recent conversations with development professionals. During the 2014-2016 period, AEB found on average, 36 gifts represented 63% of revenue.

Troubling Trends for MGOs

It is well documented that successful gift officers generally spend close to 80% of their time on frontline fundraising.² We have also consistently heard giving officers lament that too much of their interactions with donors (and their institution) is explicitly about money, causing many donors to erect defenses that undermine healthy relationships. It is also no secret that officer turnover is high and the number of gift closings is in decline (what’s more, 28% of dollars went to just 20 institutions in 2019).³ Explanations range from changes in donor expectations and behavior to the growing pressures for immediate revenue. Some believe that a growing skew in household wealth distribution is leading development teams to focus on fewer and fewer high potential donors and spending less time on replenishing their pipelines. Indeed, according to a Credit Suisse wealth report, the top 10% share of household wealth in the US rose from 69% in 2000 to 75% in 2019.⁴ Depending on the trajectory of the COVID-19 economic recovery, this trend may well accelerate.

To illustrate the challenge most institutions face, let’s take a look at a hypothetical institution: Theta College. 

Theta College by the numbers

• Total alumni: 30,000
• Alumni, based on research, who have the wealth to make a major donation (≥$100,000) over five years: 1,500 (5%)
• Number of these wealthy alumni who have made a donation for at least six of the last ten years: 600 (40%) 
• Major Gift Officers: 4

That’s 600 immediate relationships Theta needs its major gift officers to “discover.” Assuming each officer in a year makes 100 visits, solicits 25 and closes 50%, each officer will generate about 12 major gifts. Unfortunately, this means that in a portfolio of 150 potential major donors, a significant share will be virtually ignored because of officer time constraints. (This could be as much as half, since solicitations generally require 3-4 visits each). According to an AEB analysis, between 2014 and 2016, the median institution penetrated less than 2% of identified prospects for major gifts.⁵ 

What conclusion can we draw about Theta College and its gift officers? They simply don’t have the resources to optimize their acquisition of major gifts.

² https://bigduck.com/insights/how-to-build-an-effective-major-gifts-team/
³ https://www.chronicle.com/article/Giving-to-Colleges-Rises-5-/245659
⁴ Credit Suisse, global-wealth-databook-2019
⁵ AEB, “New Frontiers In Pipeline Development,” 2017

Why the 95% Matters

Theta’s development leadership has grown to believe that since only the top 5% matter (assuming some combination of loyalty and wealth), there’s not much need to worry about the other 95%. The problem with this line of reasoning is three-fold. First, household wealth and loyalty are, by their very nature, dynamic—it is very difficult to predict who will occupy the top 5% next year (never mind in five or ten years down the line). In 2017 alone, 675,000 US households became newly minted millionaires.⁶ Second, it is impossible to forecast how individual alumni attitudes toward Theta will change with time. After all, an individual’s life stage often determines their interest in pursuing a personal relationship with their alma mater. Third, lower capacity alumni do make gifts and, perhaps more importantly, advocate for Theta. Since peer-to-peer alumni relationships can be powerful, such advocating may end up influencing Theta’s top 5% donors to bestow major gifts. 

For these reasons, fully realizing the full philanthropic value of Theta’s alumni network requires thoughtful cultivation that keeps alumni personally connected (and loyal) to their institution as their wealth “capacity” grows over time. This also fills the major gift pipeline by harnessing the future opportunities within the sub-top-tier segments. To help achieve this level of personal attention, Officer Enablement Services ensures each officer’s fixed hours are spent on the most strategically valuable task: planning, crafting and exploring solicitations with their existing and potential major donors and eventually, stewardship for long term retention.

⁶ Internal Revenue Service, cited by Bloomberg

What Can Theta do to Improve MGO Success?

Institutions like Theta understand that their fundraising success is highly dependent on officer effectiveness and there is no shortage of advice for improving performance. These five recommendations are commonly mentioned as important levers:

• Change the officer recruiting profile: Target “curious chameleons” who are intellectually curious, strategic, socially flexible and able to communicate effectively (AEB, Advancement Forum research)
• Reduce portfolio size: Some analyses suggest an inverse relationship between portfolio size and the number of gifts⁷
• Foster a results-oriented culture: Engender individual and collective accountability for achieving goals
• Systematically use tailored proposals: Document and provide compelling information to the donor
• Better qualify prospects: Develop predictive models that more accurately prioritize “warm leads” in the pipeline

Often overlooked, however, are what we at Mach10 call Officer Enablement Services. These  services, developed through a tight, collaborative partnership between marketing and development, include timely alumni and donor data intelligence, informed content, and essential productivity tools. In combination, these services aim to augment officer effectiveness across a larger number of major donor opportunities and to ensure the pipeline is continuously refreshed with engaged, high capacity prospects for long term sustainability. If implemented thoughtfully, Officer Enablement Services will increase the conversion of discovery visits and reduce officer cold-call trepidation (in part by using behavioral data reports at the individual level to assess engagement). Without these services, too many of Theta’s existing, immediate opportunities in officer pipelines will stagnate. In other words, Theta’s officers are essentially leaving gifts “on the table.”

⁷ https://eab.com/insights/expert-insight/advancement/your-major-gift-officers-portfolios-could-be-hurting-their-fundraising-potential/

It Starts with Segmentation

Consider this segmentation schema and note where Officer Enablement Services can help Theta deploy their officers across a larger number of donors while enhancing their effectiveness: 

Segment 1

Top 1%. With wealth generally in excess of $10 million,⁸ these alumni have the capacity to make substantial gifts, potentially worth millions of dollars. Some may be existing donors, others may be prospects. Their personal connection to the institution will vary. For an institution like Theta with 30,000 alumni, this would represent 300 individuals. These should be treated as a distinct segment (and surely already are), supported by Officer Enablement Services.

Segment 2

Next 4%. With wealth generally in excess of $2 million, these alumni have the potential to make gifts up to at least one hundred thousand dollars, depending upon their life stage and circumstances. For Theta, this would represent 1,200 individuals. These should be treated as a distinct segment supported by Officer Enablement Services.

Segment 3

Next 15%. Likely outside an MGOs portfolio, many will eventually achieve enough wealth and demonstrate sufficient engagement to qualify and enter a major donor pipeline. Maximizing their involvement with the school is key to keeping the pipeline full for sustained giving. Many will be early in their career and index high in annual income. Some will sustain their trajectories and migrate to top 5% capacity. Multi-channel relationship marketing approaches should be implemented to motivate engagement and continued behavioral loyalty with some high-touch activities explored.

Segment 4

Next 40%. These are donors who are somewhat engaged but have and are expected to have limited capacity. These should be treated as a distinct segment for sustained participation and advocacy for the institutions. Multi-channel relationship marketing approaches should be implemented to motivate engagement and continued behavioral loyalty.

Segment 5

Unengaged 40%. Last, these are alumni who never engage and often have outdated contact information in the institution’s database. While lower investment should be made, a strategy of testing and measurement should be continuously pursued focused less on “the ask” and more on driving non-giving engagement. Over time, a few will rise to the top and may consider involvement with the school.

⁸ https://dqydj.com/net-worth-brackets-wealth-brackets-one-percent/

Ten Percent Better Can Mean Millions of Dollars

We live in a culture that values thinking big. Home runs. Hat tricks. Triple plays. Triple doubles. Yet, sometimes relatively small improvements can pay big dividends. In 2014, Dan Harris, a former Nightline anchor wrote Ten Percent Happier, a book about his personal struggles and the path he discovered for personal growth. We similarly believe that by using a selection of Officer Enablement Services, every advancement team can perform 10% better.

A sustained 10% increase in officer performance can significantly improve the financial sustainability of any institution. To illustrate the point, let’s return to Theta College with their 30,000 alumni and keep in mind that the development team pursues a lifetime value strategy with all constituents. What if Theta could succeed at shifting their alumni loyalty distribution curve one category to the right? Just 10% more highly loyal and 10% more semi-loyal. Using a sensitivity forecasting model we developed at Mach10, here is the lifetime impact we project this modest shift would create from Theta’s current alumni universe:

• An incremental $21 million in funds raised
• 760 new donors
• 60 new major donors

(Interested in seeing our full forecasting model? Just drop us a line.)

How Theta Can Deploy Enablement Services for More Effectiveness and Scalability

Officer Enablement Services focus on the top 5% with personal connections to the institution and the next tier of potential major donors.

Few of the potential donors in an officer’s pipeline will come to fruition without thoughtful and continuous cultivation. Some of this cultivation should have already occurred before the donor was qualified to be in the portfolio, manifested in multiple years of behavioral loyalty. But the cultivation must continue when these loyal donors enter the major donor pipeline and officer’s portfolio. Additionally, the stewardship phase of the relationship will be critical to securing additional gifts in the future. Officer Enablement Services allows officers to seamlessly scale across a larger number of potential major donors without sacrificing the personal relationship so critical to philanthropy. 

Here are six examples of how Theta could use Officer Enablement Services to enhance their officers’ results:

1) Enhanced Cultivation of Top Segments

By developing informed cultivation campaigns for the top two distinct audiences (Segments 1 and 2), personalized to each officer, and mapped to a 12-month rolling editorial and activities calendar, Theta can lay the groundwork for advances in: 

• • Acquisition of new potential major donors
  • Retention of existing major donors

The editorial calendar and related content would be shaped by the core values that these top donors and potential donors wish to advance through their philanthropy with the institution and the positive outcomes they seek. The narrative and messaging strategy for these two segments would be: 

• • Systematically deployed through all relevant media
  • Consumable on all major devices
  • Personalized to each officer as a complement to their synchronistic relationship-building activities

How Theta Can Deploy Enablement Services for More Effectiveness and Scalability

2) Nurturing of Segment 3

Because nobody can be sure who among the next 15% will migrate to the top 5%, Theta gives due attention to Segment 3 with an automated outreach campaign that appears to come personally from assigned officers. Content would include only information relevant to this audience (a micro-segmented approach would likely be appropriate e.g. life-stage, wealth, recency of engagement) and complement more personal interactions between the donor and the officer. Each officer would have a comprehensive view of Segment 3 prospects’ engagement with this campaign, so they could immediately see who is newly qualified as a major donor prospect.

3) Core and Personalized MGO Presentations

With core and personalized officer “HTML” presentations, usable for remote meetings and asynchronistic viewing, Theta can “pre-qualify” new potential major donors before committing the time and expense to in-person meetings. Versioned for the first and subsequent meetings and frequently updated, these HTML presentations can be a much more effective way to reach people with varying device viewing preferences and are more flexible than traditional PowerPoint presentations or Word documents. Additionally, Theta employs microsites for officers to send potential and existing major donors during a capital campaign, to present goals, illustrate use of funds, progress, share video stories of the good the gifts produced, recognition of major donors and important institutional updates.

4) Donor Analytic Record (DAR)

Providing Theta’s officers with valuable, up-to-date donor intelligence can significantly enhance effectiveness and morale. The best way to design the DAR is to start with the information that would inform officers if, when and how they should reach out to a donor. Once these questions are formulated, Theta works backwards, eventually tracing back to the available granular data and sources. These would include third-party data, digital behavioral data, direct mail promotion and response history data, human media data entered, data provided by the donor, and donor student data. Updating the behavioral data feeds in near-real-time and creating rules-based alerts for officers gives Theta’s officers the information and clarity they need to react as soon as new opportunities present themselves. By knowing more about their donors at the right time, officers can help them comfortably discover their philanthropic pleasure and avoid uncomfortable cold calls.

5) Improved Digital Personas

By updating and homogenizing officer LinkedIn profiles and email signatures, Theta can give their team a more polished, professional online presence. This may seem like a minor detail, but since most major donors have business backgrounds, they expect their alma mater to be reasonably buttoned up. Each officer’s profile should be both personally authentic and map consistently to the institution’s mission and values.

6) Systematic Stewardship Program

Surprising and delighting a new major donor with minimal officer effort should be the goal of any stewardship program. For the first 60 days after a major gift commitment is made, Theta moves beyond an “acknowledgement system” deploys a series of highly personalized touches across multiple modes, all originating from the officer with whom the donor has a relationship. As part of the program, Theta’s President and Chief Advancement Officers organize regional dinners/roundtables with up to eight major donors to thank them for their philanthropy, discuss how they will stay involved, explore potential strategic initiatives to advance the mission of the institution and distribute institution-branded gifts e.g. a captain’s chair, a watch . In the months that follow, a specific continuous update campaign keeps the donor apprised of how her/his gift is being used. This personal, high-touch stewardship effort is likely to produce more loyal major donors and help pre-load the pipeline for next year’s gifts.

The Bottom Line?

Institutions that foster strong relationships between officers and marketing will not only be better equipped to achieve their short-term objectives, but will also be advantageously positioned to develop a healthier pipeline for future major gifts.

If you’re interested in learning more about Mach10’s Officer Enablement Services or other higher ed solutions, please drop us a line.

Dave Ehrenthal and Rob Vlock are principals at Mach10 Marketing, a consultancy exclusively serving higher education. Both led marketing for a combined 50 years in the private sector across a variety of industries before turning their efforts to more meaningful work.