How to Set the Right Leading and Lagging Indicators for Your Major Gift Officers

I once worked for a non-profit president that wanted me to even out the peaks and valleys in our revenue.  He wanted our fundraising target to be divided by 12 and use that as the monthly budget number.  Wouldn’t that be nice?

In my years of working in and with many non-profit leaders responsible for their organization’s income, many have simply given their major donor team the income goal for the year and then expected that funds would miraculously come every month in nice round equal amounts.

The truth is that managing a team of major gift officers is a challenging and complex task.  There are many facets that impact the strategy you should use.  But, there are some overarching principals that should be considered no matter what the other issues may be.

In their book, The 4 Disciplines of Execution, Chris McChesney, Sean Covey, and Jim Huling say that the key to managing any outcome is knowing what you can and should manage.  They talk about two critical management concepts: “leading indicators” and “lagging indicators.”  Leading indicators are the things you do to influence the ultimate outcome and lagging indicators are the things you can’t manage but are the results from the activity that produces the outcome.

This relates to managing your major donor team in a very significant and strategic way.  Let me explain.

First, you must ensure that goals are realistic.  Obviously, you cannot justify a major gift officer’s annual goal of $1,000,000 from a caseload with two donors who each have $100,000 in total capacity.  It’s surprising how many development leaders set goals that are simply unachievable.  Some of the key questions to ask in setting fundraising goals are:

  • What was the total income from the caseload?
  • How many active donors are in the caseload?
  • How many total gifts were given from the caseload?
  • How many of the donors gave 80% of the revenue?
  • What was the average gift?
  • What was the median gift?
  • Was there a moves management plan for the top 50% of the donors?
  • How many first-time donors were in the caseload?
  • How much revenue came from first time donors?
  • How many gifts came from previous donors that hadn’t given in the previous 3 years?
  • What percentage of gifts were restricted?

(All questions relate to the most recent fiscal year)

There are other questions that should be asked, but these are the key areas to examine.

Once you have evaluated this data I recommend setting goals in these key areas:

  • Total revenue from the caseload
  • Revenue from prospects
  • Revenue from lapsed donors
  • Number of in person meetings with each donor
  • Number of “Friend Raising” Events

The first three items are lagging indicators – results from key activities.  The fourth – “Friend Raising” Events – is a leading indicator.

You see, you cannot control the outcome – the donor’s decision to give –but you can manage the right activity, in the right quantity with the right people that will produce the desired outcome, at least as long as the desired outcome is reasonable.

About Bruce Scott

Bruce Scott | SVP Sales and Marketing

Bruce is a trusted adviser to dozens of non-profit organizations. Before joining the company, Bruce was the Executive Director US Development for Bible League International, where he engineered a turnaround in revenue and sustained four years of consistent growth in revenue, new donors and ROI. Bruce instituted a moves management system for the major/mega donor team, achieved the organization's first seven-figure gift in five years, and grew the average gift among major donors by 38%. Before moving into Development, Bruce had a successful sales and marketing career. He has been published in professional journals and has been a popular speaker and conference leader in the area of marketing and development.

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