Tackling the challenges of growing major donor income: a leadership perspective
Many organisations see growing income from high net worth individuals (HNWIs) as integral to their fundraising strategy. Yet achieving this growth is difficult, even for large organisations with a history of securing big gifts.
What is getting in the way? I asked nine senior fundraisers from the charity and higher education sectors to share their insights into the challenges they are facing in growing major donor income and what can be done to improve it.
The fundraising leaders identified four key risk factors in relation to achieving income growth:
1. Cultural limitations: a resistance to co-creation with private philanthropists, stakeholder assumptions and attitudes, and a short term financial perspective.
2. Difficulty in maximising donor value: a weak proposition, lack of systems and processes to support a holistic approach to relationship management, and data quality issues.
3. Finding/keeping people with the right skills
4. A culture of fear around GDPR makes prospecting, stewardship and targeted activities harder.
There is high competition for high net worth support. More causes than ever before are targeting the same small group of HNWIs. Over the past few years, as other funding sources decline, more and more charities have launched major donor programmes. At the same time, higher education funding has been cut, and universities have intensified their focus on HNWI fundraising.
So doing nothing is not an option
Participants were clear about what will happen if organisations do not address these challenges:
- Income growth is slower or flatlines, and financial planning is difficult
- Donors have a poor experience, disengage, and cannot make the difference they want to
- Organisations cannot realise the full value of HNWIs or achieve strategic ambitions
- Philanthropy teams under-perform, have low morale and high turnover
- Organisational development is critical for growth
These findings indicate that fundraising leaders and organisations need to invest time and resource to:
- Change the culture. Build stakeholder confidence and willingness to invest in the major donor programme and support a co-creation approach. Use relationship KPIs to incentivise a focus on quality of relationships, not just the numbers.
- Strengthen 'back office' functions including expertise in due diligence and GDPR, and articulating a case for support that can inspire HNWIs to invest in an organisation at the principal gift level.
- Attract and develop the best people. Develop the strategic skills and mindset needed for principal gift fundraising. Ensure fundraisers have the credibility and influence to manage HNWI donor and senior stakeholder relationships effectively.
- Embed data protection. Legitimate interest and privacy impact assessments; ensuring privacy notices reflect how an organisation processes personal data for major donor fundraising; and staff training are some of the key compliance activities.
- Lead effectively. Developing leadership skills, so you can create the environment your team needs to succeed. It is the role of leadership to steer the process of culture change, including building organisational readiness and securing investment.
Download Tackling the challenges of growing major donor income: a leadership perspective for a more in-depth look.
Clare Baker, Director at True Leadership
- major donor