 I wanna welcome all of you that have joined us live for the nonprofit show. You might be watching one of our recordings or listening to our podcast. We welcome you, excuse me, on those platforms as well. So thank you for joining us today as our guest, Jeff, talks to us about tiering your nonprofit donors. Before we dive into this conversation with you, Jeff, we wanna make sure that our audience and our viewers know who we are. Julia Patrick, CEO of the American Nonprofit Academy, she's taking a rest day as we just shared in our green room chatter. It's really all of us, yes, good for her. It's important for all of us to take some downtime. But I'm here, I'm Jarrett Ransom, your nonprofit nerd, CEO of the Raven Group. We are honored to have the continued support of our sponsors. Thank you very much to Bloomerang, American Nonprofit Academy, Fundraising Academy, Nonprofit Nerd, Your Part-Time Controller, Staffing Boutique, Nonprofit Thought Leader, as well as the Nonprofit Atlas. Please check these companies out. They are here to help you and your mission. They are fantastic individuals that are here to be of service. So please do check out what they offer. And as I mentioned before, if you want to listen to this show again or any of our previous shows, you can do that by tuning in onto Roku, YouTube, Amazon Fire TV, as well as Vimeo, plus podcasts. So we're on over 20 podcast channels right now, Jeff. So this will also be bifurcated into the podcast form. So wherever you stream your podcast, you can find this episode. But wait, there's more. I'm going to Vegas. And what happens in Vegas is not staying in Vegas because I'm going to be broadcasting live thanks to Bloomerang for allowing us to broadcast from your showroom booth while we are there for the AFP, which stands for the Association of Fundraising Academies ICON Conference coming up May 2nd through before. So please, if you're going to be in Sin City, come say hi to me. We'd love to see you in real life. Jeff, you were so patient as we did this intro for the episode. Thank you for joining us again and welcome back. Hey, thanks for having me. I really appreciate it. Absolutely. Well, tell us a little bit about you. Tell us a little bit about Veritus Group and what you offer. I had mentioned welcome back. So that means that you have been here before. So all of our viewers and listeners, you can check into those archive. I told you where to find them. And you can listen to previous episodes with Jeff. But let's start by telling us a little bit about yourself. Okay, I've been in the nonprofit space for 32 years. So right out of college, I started working for a nonprofit as a development director and really learned a ton of stuff in that time. And then went to another larger nonprofit. So I spent eight years as a development director with two different nonprofits, really learning the nuts and bolts of fundraising. And then I was called to join an agency that worked with nonprofits all over the country in developing their direct response programs. So all those TV, radio, direct mail, all of those things I got exposed to and learned. And it was incredible experience. And I did that for 12 years. And then Richard and I, my business partner came together and Richard had a major gift fundraising agency. And it was just him and I joined him. So in 2009, we came together and formed his consultancy agency into the Barrettist group working specifically with nonprofits on major gift programs. And then, and that's expanded to mid and major and now plan giving. So we consult with other organizations on how to build their mid, major and plan giving programs. And then we work alongside of the frontline fundraiser on an ongoing basis to ensure that they're successful. And the other part of what we do is we have a whole online training program called Barrettist Group Academy that trains frontline fundraisers all over the world on how to do mid, major and plan giving. And so we've been doing that for years and it's been amazing. Oh, that's so fantastic. Well, I love all that you're offering, all that you're doing. So thank you, thank you, thank you. And today's conversation as we go into should we tear our donors? What's the purpose of that? We're gonna talk a little bit about the time management like all the nuts and bolts as to why you should be doing this and if you're not doing it, how you might implement it. So let's start off with this question. Let's start off with the purpose. What is the purpose of tearing our donors? Well, really if you step back, the real purpose of that is to be a good steward of the resources of your nonprofit because not every donor is the same. Some donors give less, some donors give a lot and you have to decide as a fundraiser how much time, how many resources and energy are you going to give to certain donors because they deliver an economic value back to the organization. I know that sounds kind of technical and non-feely but there's an economic reality to fundraising that we have to be good stewards of the money that we're using to develop relationships with donors and we can't treat them all the same. And so tearing your donors allows you to be able to focus on donors on different levels so that as a fundraiser, you're using your time wisely, you're using your organization's time wisely and resources. And if you think about it, every time we do an appeal even, a direct response appeal out there, you're in a sense tearing donors because you're making decisions which donors are we sending this to and not every donor gets every appeal that you do because you might have some deeply elapsed donors that appeal would not bring in net revenue from those donors. And so you make decisions about what level of donors are you going to send different appeals to or different communication pieces to based on their giving amounts, how long they've been on the file, if they're active donor, if they're lapsed. So we do this all the time. We may not even think about it as tearing. And I think you think more about it in the mid and major gift space because there you're dealing with limited number of donors but tearing your donors allows the frontline fundraiser to focus their energy's time and resources on specific donors that are gonna deliver more net revenue for your organization. Lemme, is tearing and segmenting the same thing? Well, it's sort of in a way. Okay. Tearing I would use more towards the mid and major gift space and segmenting of course in the direct response, the more mass communications. But if you think about it, even segmenting is sort of like tearing your donors because you're making decisions not to send everything to everybody, right? And so you're making decisions based on the economic realities of those donors. So you might send, let's say you're segmenting for direct response fundraising appeal. You're sending out probably a donor that's giving $100 consistently, you're probably sending them almost everything because it makes sense because you know the ROI on that group of donors is going to be reasonable and probably pretty good. But a donor that's maybe a $10 donor, you may not send every appeal because you've looked at results from other appeals and realized that segment of donors for this particular appeal probably is not bringing in a high enough ROI for you. So in a sense, you are tearing your donors when you make those decisions. Okay. Now that's good to hear because I find myself using those words interchangeably quite often. And so I wanted to ask that personal question and you've talked a little bit about this already, Jeff, but really the economics when it comes to tearing your donors and you've spoken a lot already about the mid-range donors. So are you telling me that we're not talking about the $10 donors, we're not talking about the $10 million donor, right? We're really looking at that mid-level within our donor database. What does that look like? Well, on the mid-level side, and it depends on what mid-level is for your organization that you're out there. So a mid-level could be for an organization $100 to 999, but we have other organizations that we work with where mid-level is 1,000 to 9,099 or even 24,000 is their mid-level. Wow. And so we're tearing those donors because the organizations that we work with and develop those programs, there's about 600 donors in a mid-level portfolio. So we tear those A, B, and C because we want the mid-level officer really focusing on A-level to try to move them into major gift portfolios. And so they're gonna be spending more time and energy and resources on those A-level because they have higher values, they're giving more and they are more apt to move into major gifts. If we spend a little bit more time, got to know them, then maybe the C-level donor where we're trying to move them up but maybe they're not ever going to be a major donor, right? And a B-level, they have the ability to move up and we're spending a little more time and energy on them to try to move them into A, but it's really the A-level for that mid-level officer where they're spending that time. So that's why we tear those donors to help them focus correctly on their donors. How many is too many? Like for one person to manage and we're going to the time management piece also, how many is too many? Well, for mid-level, I would say we want no more than 750, but we also have to look at the value of that caseload too, because that also plays into it because the economic reality is, is that let's say 600 donors equals 500,000 in revenue. Well, as a mid-level rep and all the overhead and everything else, it could be 75 to $100,000 to actually cultivate that 500. And so that's something we have to always look at. But 700 donors for a mid-level, but for major gifts, it's no more than 150. And that's where, this is where tiering really comes into play on the major gift side, because we know that with 150 donors, probably 20 to 25 are going to be your A-level. And they're going to bring in half of the total value of that caseload. So we know that we're going to have to spend almost half of the time of the MGO with that A-level because they're more complex. There's more revenue coming from those donors. And so there's more time and energy spent on A-level because we want to move them from transactional type gifts to real transformational type giving and to really focus the MGO's time correctly, you have to tier that, those donors. Otherwise, yeah. Those two distinctions, transactional, transformational. And even as you say those words, and as I heard you say those words truly, Jeff, it was like, that feels different, you know? And that I think what I'm leaning from our conversation, you want these donors to feel different. You want them to feel just as invested with your mission as you are with the mission. And sometimes that vernacular is really what helps to set that change. Yeah, it really does. And we've seen how being able to tier you that portfolio really works, not only for the major gift officer, but as you just alluded to, it also helps the donor because if you now have the time and energy that you're focused correctly on those A-level donors that are more complex to work with and they have much more capacity, then by spending that time with them, really getting to understand their passions and interests, you're going to see those transformational type of gifts. And so tiering is so important because it will help the major gift officer know where to focus their time and energy. You know, it's interesting because sometimes we run into get major gift officers who they're working with a C-level donor and they're meeting with them all the time. And when we ask them, well, like, what's going on there? They're saying, well, you know, they're so fun to hang out with, you know? And so they develop like this real close relationship with somebody who maybe only can give $1,000 and they're neglecting someone that can give a $100,000 gift. Why? Because, well, they're harder to get a hold of. Well, maybe you need to start shifting your time and energy toward the $100,000 donor so that eventually they will give those types of gifts. And so that's another important reason, really help the major gift officer focus, be accountable and be disciplined about how they approach their different donors. Okay, devil's advocate question here. Because I know those fun donors that, you know, you just feel like you can sit and chat with them for hours and it doesn't feel like work, you know? So you talked about planned giving and that's something that you offer as well through your consulting business. When we're meeting with these donors, regardless of their tier, regardless of their ABC kind of level, are we also planting seeds and having conversations of their legacy giving? What does that look like? Absolutely, that always should be happening with major gift officers because you're exactly right, even though someone might not be able to deliver cash, high cash gifts, and when I mean high, I mean like a six-figure cash gift, but they can, you know, they're consistently giving lower four-figure gifts and they're a C-level donor. Those donors are ripe for planned giving and thinking about their legacy. And that's always something a major gift officer should be thinking about on their B and C-level donors as well as their A's, but A-level is really where you're trying to get a, you know, high-level cash gift now. The B's and C's, you're trying to get them to continue to their giving, increase them a little bit each year, but also really look at that planned giving opportunity for those donors because they may not be able to give those big gifts now, but later on they have that ability. So they'll have the capacity. Thank you for answering that. And I'm curious also, Jeff, you know, with this, I'm thinking of the halo effect, you know, do you have that with your tiered approach where maybe you're talking to this really invested donor and you have conversations that, you know, lead to who else might be interested in this cause? Who else in your circle, you know, or of your sphere of influence should also be aware of what's happening? Does that help to develop more and more kind of, you know, leaders and givers? You know, any time that you can spend quality time with those types of donors, that A-level donor, yes, that will always happen because if they're really passionate about your mission, they ultimately want to tell other people about that. And by having the time and energy and resources to be able to spend that kind of quality time with a A-level donor, it will have a ripple effect. Besides getting gifts, transformational gifts, you will be able to bring in other people that are connected to them that may also have a real connection to your mission. So absolutely. That's a win-win. You know, people support that in which they help create. And the simplest way I can describe this, you know, analogy that you just shared is that, you know, anytime we go to a restaurant or a theater and we love it, what's the first thing we do? We tell everybody about it. Exactly. Or before we're even done from the table or done from the theater, we've posted on social media, right? We've already told people about it. And are you seeing that the same? Yes. So what we find is that major gift officers that have the time to really be able to report back a donor's impact, thank them properly for gifts, give them great donor service. Yeah. Those donors are gonna tell other people because unfortunately, most nonprofits don't do that well. They don't serve donors well. One reason, because they haven't tiered their donors, so they're all over the place with donors. And in a very disciplined program, those major gift officers have the time to really develop those relationships with those A-level donors by delivering that great service. And I tell you that when a donor has an incredible experience with a nonprofit, they will tell other people about it. That's right. Because it's so rare, unfortunately. Unfortunately, it really is. Well, let's dive deeper in this time management because I'm curious, Jeff, if you can take us to the beginning, right? Let's say that there's a listener who's listening and they're saying, okay, I'm guilty. I don't have my donors tiered. I certainly don't have them in an ABC category. Can you talk us through the high-level points of getting started? What does this look like when we're staring at our donor database and they're all in one big hodgepodge list? Yeah. So I first want to make an assumption, and that is that first, all the donors that would be in a portfolio are qualified, meaning those donors have gone through a process with you. They may have given a gift that says, oh, I think they're a major donor, but you've gone one step further to find out do they actually want a deeper relationship with you? So that's number one. All those donors in a major gift portfolio have to be qualified. Once they're qualified, and now let's say you have 150 donors, how do you tier them? Well, you're going to look at their current giving levels, number one. That's the first indicator, current giving levels. Then you're going to look at how recent are these gifts that are coming in, okay? And then you're also going to look at lifetime giving. How long, you know, what's their lifetime giving been to the organization? And then you want to look at like wealth indicator analysis that you may have on a donor. So here's a great example of how that can work. So we had a major gift officer do this whole process and started talking with a donor to try to qualify the donor. And the donor for years had given between $2,500 and $5,000 a year. So they were very loyal, but they were giving a lower four figure kind of gift. No one ever reached out to this person. So in her qualifying, this donor finds out this donor is extremely wealthy. I mean, extremely wealthy. Didn't know this until she went through this qualifying thing. What did she do? She put this donor that typically may be on her caseload would be a B or C level donor, put her on the A list right away. Just through the qualifying period. Now she didn't give an A type gift yet, but because she found out she had enormous capacity, she put her on A. So over the years, over the next eight years, really cultivated, got to know this donor, that donor, the last cash gift that donor gave was $300,000. Why? Because she focused her time correctly on the right donors. That's right. Now that donor unfortunately died in the spring of 2021. Just a couple of, just a week ago, she met the major gift officer, met with the former financial advisor to this donor. They had, they were just gonna have lunch just to kind of reminisce about how great this donor was and tell stories about her. At the end of the conversation, the financial advisor pulls out an envelope and says, I wanted to give you this. This came from the donor. The donor had written her a handwritten note before she had died about what important relationships she had with her and the organization and left 10% of her entire wealth, which was $28 million. So she had an estate of $280 million and gave that nonprofit $28 million. All of that started eight years ago when she qualified that donor and put her in the right tier level at A level, even though she wasn't giving at an A level and cultivated her over the years. And that's the result of it. We see this kind of story happening all the time. And this is why it's so important not only to qualify, but to tier those donors because she could have just put her in a C level, not really spent a whole lot of time with her and would have seen those kinds of gifts happening. But because she saw the potential and qualified her correctly and put her in the right tier, she spent the right amount of time with that donor. It's an incredible story. What a beautiful story, beautiful story. Gives me chills, head to toe. I am. Jeff, there's so many of those stories out there. And what I love too is the point you made and I wanna make sure that everyone heard this. This isn't an overnight solution. This is a marathon, not a sprint because I heard eight years, right? So really stewarding this relationship and focused on that return on relationship. I love this story, would love to hear more. This is exactly why we do what we do because this donor has now left such an incredible transformational legacy gift that will continue to continue to continue time and time again. So kudos to that major gift officer, whoever they are out there, fantastic, well done. Man, that's gotta make you feel amazing. It does because from the very beginning, she followed that process and bought into the fact, hey, I gotta have qualified donors. I have to tier them. I've gotta put a goal. I've gotta have a plan for every donor. So she had the right structure in which to build that relationship. So she had the time, her time was focused correctly. So she had that time to really find out that donor's passions and interests over the years and develop such a strong relationship with that donor that it resulted in that amazing gift. And a handwritten note, which to me is equally as important as the zeros behind that gift because what a heartfelt, meaningful letter. And I'm sure, I hope this person has this framed in their home because that is such a beautiful tribute. It is. Yeah, that's amazing. Well, Jeff, fantastic. As we look at time management realities, the reality is this conversation is coming to an end, makes me sad, but I love the story you shared, all of the wisdom and expertise because you made it very easy to see what this looks like, how we will tear our donors, what we need to do to qualify them. So thank you for walking us through that and sharing a little bit about us of how we can implement this if we're just staring at this donor database going, what is all this stuff? What do we do? Yeah. So that's important. Hey, if you liked what you heard, check Jeff out, please do Veritas. And I hope I'm saying that right. Yeah, Veritas. Veritas group, V-E-R-I-T-U-S group.com. For those of you listening, you also have Jeff's email right there. So take a screenshot or whatever you'd like to do to reach out. As you heard earlier, Veritas and Jeff, they offer a plethora of professional opportunities. Please do check them out. That Academy peaked my interest. So I would like to take a look into that. And again, just thanks for all you do and for being with us here today. We of course want to say thank you to our sponsors. So thank you very much to Bloomerang, American Nonprofit Academy, Fundraising Academy, Nonprofit Nerd, Your Part-Time Controller, Staffing Boutique, The Nonprofit Atlas, and the Nonprofit Thought Leader. Now's a good time to check out these companies. I hope you didn't do it while Jeff was talking because he had all kinds of great wisdom to share with us, but please do check out these presenting sponsors of ours. Jeff, thank you. I saw this article you had written on LinkedIn. I reached out and I said, this would make a great episode. Join us. Let's get nerdy in that we did just that. So thank you. I'm glad you did. Thank you, my friend. Thank you. I'm so glad to have you. And thank you to all of you that have joined us live or for the recording. We are so grateful. Hope that you'll join us back tomorrow. The rest of the week, we have a lot going on. And until then, please stay well so you can do well. Thanks, Jeff. Make it a great week.