best practices in portfolio management
TRANSCRIPT
Best Practices in Portfolio Management
Michael Van Dyke, Blackbaud
I’m Michael Van Dyke
linkedin.com/in/michael-van-dyke-230ba511/
Love organizing information
Enjoy helping people find their own answers
Big advocate for going off the grid once in a while
PRINCIPAL BUSINESS CONSULTANT
Up Front
• Unless otherwise noted, all research was conducted by Blackbaud Fundraiser Performance Management analysts.
• Reports and deliverables mentioned are a part of Blackbaud Fundraiser Performance Management subscription.
• Unless otherwise noted, research is focused on the 150 higher education institutions that subscribe to Blackbaud Fundraiser Performance Management Platform.
• Lessons learned can be applied by any fundraising organizations
What can happen when an institution has strong portfolio management
practices in place?
Portfolio vs. Prospect Management
Portfolio Manager
Holistic Health
Data and Process
Strategy
Prospect Manager
Activity Tracking
People
Strategy
Let’s discuss…
• What activities are a part of portfolio management?
• What happens when you don’t (or do) have portfolio management practices in place?
• What best practices can you implement at your own institution?
Portfolio Management
WHAT ACTIVITIES ARE A PART OF PORTFOLIO
MANAGEMENT?
The Portfolio Management Practices
Hygiene Composition Coverage
Churn Review
Portfolio Hygiene
THE SIZE & OVERALL QUALITY
Average Portfolio Size
Too many prospects for true management
Max362
Median166
Min103
Average177
0
50
100
150
200
250
300
350
400
Average Portfolio Size
Maturity Model Overview
YOUR PROCESS
YOURACTIVITY
YOUR INVESTMENT
YOUR RESULTS
Maturity Model Stages
Median Portfolio Size by Stage
• On average, a 45% decrease from Stage 1 to Stage 4
• Difference of approx. 100 prospects
Smaller Portfolios, Stronger Results
On average, increase in average commitment per
full-time officer from Stage 1 to Stage 4
34%
On average, increase in number of visits by a Stage
4 gift officer compared Stage 1 gift officer
51%
Average Portfolio Quality
Too many low value prospects assigned
Max99 Median
97
Min80
Average96
70
75
80
85
90
95
100
Median EVI for Assigned Prospects
Importance of Quality Control
On average, donors giving more than 10K where MG
EVI* >= 95
78%
Increase in first time visit to high EVI from Stage 1 to
Stage 4
74%
Of best prospects in terms of capacity and inclination
are not assigned
66%
*MG EVI – Major Giving Expected Value Index
Portfolio Composition
THE ARRANGEMENT
Why Consider Composition?
Decline in participation in middle aged donors over
past 20 years
39%
Average Percent of Commitments from Top 100
83%
Of officers engage a “Top 100” donor, while many
prospects are not yet discovered
79%
Average Percent of Commitments from Top 100
On average, a Stage 4 school is less reliable on their Top 100
A Mixture: New, Developing and Existing Relationships
New
30%
Discovery
Prospects who have never been visited by anyone from the
institution
Developing
40%
Cultivation
Prospects who have been visited between 2-4 times
Existing
30%
Solicitation
Prospects that have been visited 5+ times before current fiscal year
The Prospecting Payoff (aka Discovery ROI)
Other Considerations for Composition
Officer Role & Tenure
• Planned Giving
• Principal Giving
• Major Giving
• Leadership Annual Giving
• Associate
• Director
• Executive
Capacity
• Leadership Annual Giving
• Mid-Level
• Upper Mid-Level
• Evergreens
• Top 100
Miscellaneous
• Location/Region
• Active Stewardship
• Permanent Stewardship
• Life Stage
• Philanthropic Interests
Portfolio Coverage
THE ATTENTION
Visit to Prospect Ratio
Community Network Officer Visits in 2018
83
Potential is High for Better Coverage: Visits in FY2018
Assigned Prospects
Not Visited55%
Assigned Prospects
Visited45%
High Value, Assigned Portfolio
Prospects33%High Value,
Unassigned Portfolio
Prospects66%
Typical Coverage: Visits
Top Quartile in percentage of assigned prospects
contacted in the last year
Median: 55%
77%
Top Quartile in percentage of assigned prospect visited
in the past year
Median: 22%
36%
Proposal Coverage
Potential: Proposals Submitted
Top Quartile in percentage of proposals submitted to
portfolio assignments in the last year
Median: 10%
18%
On average, increase in number of proposals
submitted by a Stage 4 school compared to Stage 1
school*
33%
*After taking number of FT officers into consideration
PARTNERSHIP &
ACCOUNTABILITY
Portfolio Review & Churn
THE EVALUATION & SHAKE UP
Portfolio Churn
Is the officer meeting with the right people and following the right processes to facilitate a donation?
How long should it take to contact and qualify a newly assigned prospect?
How long should a prospect be in a portfolio until a solicitation plan is in place?
Are there prospects who have gone too long without contact?
Are any prospects in permanent stewardship?
Who has been disqualified?
Prospect Moves
Initial Contact
Newly assigned prospect should be contacted within
3 months and qualified within 6 months
Meaningful Contacts
The Ask & Follow Up
The 3 to 6-month period when an ask is made, and a
proposal is under consideration by the
prospect
Multiple meaningful contacts should continue after initial
contact to move the relationship towards a donation
within 6 to 18 months
Future Contacts
Once a prospect has made a gift, discuss whether
they should be in active or permanent stewardship
Portfolio Management Best Practices
A SUMMARY
Hygiene Do’s
Pay attention to the number of assignments in an officer’s portfolio
Have a policy outlining how prospects are assigned to a portfolio
Develop a commonly agreed upon system to identify and classify prospects
Create a way to tag or classify your suspects for future assignments
Get input from officers on prospects that may not be found through data mining via a clear clearance policy
Composition Do’s
Ensure there is a healthy mix of new, developing, and existing relationships in overall assignments
Consider an officer’s tenure, role, and overall goals when assigning prospects
Ensure a prospect’s location, their life-stage, and philanthropic journey are considered
Coverage Do’s
Ensure goals around visit, proposal asks and granted numbers are realistic and appropriate for portfolio
Track contact and visit dates
Track Target Ask Dates/Amounts, Expected Granted Dates/Amount in addition to Ask Date/Amount and Granted Date/Amount
Track percentage of those in portfolios that are being contacted/visited in a year
Keep officers accountable for documenting activities
Churn & Review Do’s
Schedule monthly check-in meeting with officers to determine if portfolios are healthy and no one is being missed
Reassess prospects currently assigned to officers and remove anyone that has been disqualified or moved to permanent stewardship
What can happen when an institution has strong portfolio management
practices in place?
The Possibilities
Creation of a standard and agreed upon method of assigning, tracking, and reviewing of portfolios
Fundraisers are more focused and can develop more effective strategies for cultivating and soliciting donors
An increase in the number of quality visits, asks, and overall commitments per officer
Reduction in donor fatigue
Stronger and more sustainable pipeline
To learn more about what was included in this agenda, visit:
How to Streamline your Major Gifts Portfolio in 5 Steps
5 important Higher Ed Fundraising Truths for FY2020
Your 4-Step Recipe for Donor Prospecting Success
Tell us in a session survey on the mobile app, and you’ll be entered to win a complimentary pass to bbcon 2020 in Seattle, WA!
