Optimizing Challenging Portfolio Structures

By Megan Tedeschi, The George Washington University (GW) 

Ensuring gift officers have the right distribution of prospects in their portfolio and right-sized metrics is critical to the success of their fundraising efforts. Portfolio optimization, however, becomes difficult when dealing with unique portfolio types and constituencies. Establishing guidelines for unique portfolios ensures that all gift officers have tailored performance expectations. By focusing primarily on just four key elements (size, stage distribution, special assignment considerations and metrics), prospect development professionals can easily optimize some of the most challenging portfolios.

What follows are recommendations for tailoring these key elements, plus some special considerations, to optimize four of the most commonly challenging portfolio structures.

Corporations and Foundations

Size: Allow for larger portfolios, as much of the work of these gift officers, at least at GW, does not require a high level of personal interaction. If individual portfolios contain 100 prospects, these portfolios may contain as many as 120.

Stage Distribution: Most prospects will be in the Cultivate or Solicit stages, particularly larger foundations with multiple proposals open at one time. Allow for longer time spent in each stage, as gift cycles can take longer and are often subject to external timelines beyond gift officers’ control. For example, prospects may remain in Cultivate for as many as 12 months and Solicit/Negotiate for six months or more.

Assignment Considerations: If you have a large corporations and foundations team (more than two gift officers each), assign portfolios based on subject matter. This allows for gift officers to develop relationships with staff or faculty within your organization, which is typically critical to closing these types of gifts.

Unique Metrics: Reduce the number of visits required by these officers. At GW, we have noted that they are not as critical to fundraising success as for other gift officers. However, the background and internal work they do, including background meetings, should be weighted more heavily in their metrics. At GW, of the visits and contacts our foundation and corporate officers are required to complete as part of their annual metrics, approximately 70% - 80% are internal or background meetings. These gift officers should also have higher annual fundraising and solicitation goals as they are typically submitting many more proposals each year than a typical major gift officer.

Other Considerations: These gift officers prove an exception to the rule of one representative from each unit serving as a secondary assignment on a prospect. Assigning multiple corporate and foundation gift officers to a single prospect allows junior gift officers to handle smaller proposals; however, they should not work together on a single proposal. The goal in assigning multiple gift officers to the same prospect is to increase the number of proposals you are able to submit, not double the amount of staff hours dedicated to a single proposal.  

Planned Giving

Size: Decrease the size of gift officers’ primary assignments and allow for a larger percentage of secondary assignments. Much of these gift officers’ work is done in collaboration with other fundraisers and often times qualification work (i.e. assessing a prospect’s interest in making a planned gift) is completed by other gift officers.

Stage Distribution: Allow for a larger percentage of these portfolios to be in the Solicitation and Stewardship stages. Planned giving officers are often looped in only once a donor indicates an interest in making a planned gift. After a commitment has been made, they need to keep the donor happy and engaged until the gift is realized.

Assignment Considerations: Prospects to consider for planned giving assignment include loyal donors (10+ years), prospects without children, prospects ages 40-60 (the ages when most people make their first planned gift), or prospects with soft credit (which indicates they have structured assets).

Unique Metrics: They will likely have a number of proposals they are working on in tandem with major gift teams. Ensure proposal credit based on team member assignments is a key metric for planned giving officers.

Other Considerations: Direct marketing mail and phone programs may also drive much of this team’s qualfication work, lessening the time they have for portfolio work. Be wary of awarding proposal-based credit for unsolicited bequests, but do allow credit for bequests that were booked by a gift officer but realized at a higher amount.

Stewardship

Size: The size of these portfolios can mimic portfolios for traditional major gift officers as Donor Relations officers still need to complete a high level of personal interaction.    

Stage Distribution: Stewardship prospects should be distinguished as temporary stewardship (prospect is expected to make another major gift) or permanent stewardship (prospect is not expected to make another major gift, including a planned gift). If a prospect is deemed to be in permanent stewardship, consider if they need to be managed, and if so, by whom and for how long. Ideally, stewardship portfolios are focused on temporary stewardship with the aim to get prospects back into the solicitation cycle.

Assignment Considerations: Stewardship prospects may be distributed throughout gift officer portfolios or managed in stewardship-heavy or stewardship-only portfolios, which are typically managed by a staff member from Donor Relations. For the latter, prospects without a planned solicitation in the next two or more years are ideal fits.

Unique Metrics: They should have about the same visit and contact metrics as a regular major gift officer, but their annual fundraising goal should be significantly lower, if they have one at all.

Other Considerations: Ensure there is a stewardship plan for every stewardship prospect that clearly defines the role of the Donor Relations officer and includes a timeline for reintroducing the prospect into the gift cycle.

Principal Gifts

Size: These portfolios contain only the highest capacity prospects as defined by your organization. Allow for smaller portfolios as these relationships are more time intensive and take longer to reach solicitation.

Stage Distribution: Stage distribution should mimic a traditional major gift portfolio, but prospects will spend longer in each stage, as relationship building and solicitations require a high level of development and leadership involvement.

Assignment Considerations: These gift officers are situated centrally to represent your entire institution and are good candidates to manage high capacity prospects with broad interests meriting complex, transformative strategies with several stakeholders across your organization.

Unique Metrics: They should be expected to have fewer visits and asks each year, but have a higher annual goal due to the high dollar amount of each ask. For example, a principal gift officer might aim to raise $5 million over 5 to 10 asks, whereas a major gift officer might aim to raise $1 million over 20 to 25 asks.

Other Considerations: Ensure you have a current capacity rating for all prospects assigned, or considered for assignment, so you can quickly assess whether assignment is warranted and if solicitations are being asked at transformative capacity.

Final Recommendations

Take stock of your organization’s current structures and outstanding needs. What’s working and where do you need the most help?

Secure leadership buy-in for your plans. Explain to your leadership why these portfolios are unique, and why the gift officer, the prospect and your organization will benefit from the different portfolio guidelines and metrics you are suggesting. If needed, take incremental steps toward your end goal to help leadership and gift officers adjust slowly.

Tailor your approach and keep in mind additional consequences. Be ready to advocate for harder-to-swallow changes while championing the work that your unique gift officer is doing. For example, if you are suggesting reducing the fundraising goal for gift officers with a heavy load of stewardship prospects, explain to leadership how this management system will free up space in other gift officers’ portfolios focused on building the pipeline and closing gifts — ultimately resulting in more dollars for your organization.

Lastly, continue to refine optimization procedures as your fundraising operation evolves and becomes increasingly sophisticated. Maintaining optimized portfolios means keeping current with the needs and structure of your gift officers and overall fundraising team — so keep yourself and your shop open to trying new and different approaches to managing challenging portfolios. 

For more detail on these portfolio optimization essentials and tips for other head scratchers, like mature vs. discovery portfolios, executive fundraiser portfolios, and what to do with board members and key connectors, you can access the aasp Best Practice via your Apra membership!

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