Early in my career a mentor taught me something I never forgot: You’re not being strategic unless you diversify your sources of revenue! Even though you may be sitting pretty right now, with a preponderance of funding coming from one or two major sources that seem dependable, you can’t assume this will always be the case. It’s…
Studies show over 88% of all funds raised come from just 12% of donors.
In fact, the top tier of donors account for the lion’s share of all philanthropy. Just 3% of donors give 76% of all gifts.
If you’re not focusing your fundraising resources on these donors, this should give you pause. You’re missing a really big boat.
Plus, chances are good you’re fundraising in a manner that’s not exactly cost-effective.
You’re not alone. I run into this problem all the time.
There’s nothing wrong with any of these strategies. However, generally they won’t give you the biggest bang for your buck.
Where you do get a huge return on investment is from an individual major gifts program, which costs you roughly 10 cents on the dollar vs. 50 cents or more on the dollar for special events fundraising and actually losing money on direct mail donor acquisition.
If you know the Pareto 80/20 Rule, you might want to focus just 20% of your resources on the lower-yielding strategies and 80% on major individual and legacy fundraising.
Usually I find it’s one of the following reasons:
There’s a treasure trove of knowledge and research around major gift fundraising. What works well. What doesn’t work at all. What’s, at best, half-baked.
It’s not rocket science. But there’s definitely art, and some science, involved.
The gestalt way of thinking about the three secrets boils down to simply being:
(1) smart,
(2) systematic and
(3) passionate.
But, the devil’s in the details. I’m pretty pragmatic, so I’d like to give you something more practical.
If I had to pick the top three practical secrets to success, they would be the following:
Over the pandemic I took some time to enroll in an intensive coaching course. Over Zoom, of course. It was designed for people who don’t necessarily intend to become certified life coaches as a career path, but who want to incorporate a coaching approach into their daily life.
The heart of this approach, I believe, can be distilled into two words. And they’re extremely useful for donor conversations:
1. CURIOSITY
When you’re genuinely curious about another person you ask questions to draw them out. And questions to help them get to the place they want to go; not where you think they should go. Because what’s right for you is not always right for someone else. They’ll tell you what’s right – with you acting as their guide – but only if you’re interested enough to ask.
It happens some questions are better than others if you want to get to the core of the matter at hand. We’ll get to those in a moment.
2. LISTENING
There’s a better way to have dynamic, effective conversations than jumping in prematurely with your own opinion. I’ve always known this, but it turns out there’s more to it than adopting the old adage: “You have two ears and one mouth; use them in that proportion.” Because it’s how you approach the listening that matters.
Your donor’s philanthropic journey begins with you. Your job is to steer them down the pathway to passionate philanthropy, making them feel joy and fulfillment every step of the way. When the gift is finally made, they should experience a true sense of victory in a job well done.
The cherished philanthropic outcome generally will only happen if you do your job well.
One of my favorite fundraising experts, who specializes in major and legacy giving, is Dr. Russell James. He knows everything there is to know about what the industry calls “planned giving,” but he knows so much more than most. Because Dr. James, while a skilled technician, is also a thoughtful and strategic fundraiser. And he knows the best practitioners guide towards a goal. I recently listened to a webinar where Dr. James spoke extensively about the universal hero’s journey and how this comes into play in fundraising. It dovetails so nicely with my fundraising philosophy I thought I’d write about it!
You see, once you know where you’re going with any particular donor (be sure to pick a goal!), your job is to advance their journey towards that goal with every step you both take. You’re like a “Donor Engagement Sherpa,” who supports your donor up their trek towards the mountain’s peak. Sometimes there will be more than one way to get there. Be open to your donor’s needs, not just yours. Lead with vulnerability, but lead.
Some rules are meant to be bren. These three aren’t. Never. That is, unless you want to continue to lose donors hand over fist. If you’re the average nonprofit you’re retaining only 19% of first-time donors and 44% of all supporters. The Fundraising Effectiveness Report reveals the depressing data. It shows a pattern of donor…
There’s a lot of potential legacy giving out there in the universe. Per Giving USA, giving by bequest was an estimated $41.19 billion in 2020, and grew 10.3% from 2019 (an increase of 9.0%, adjusted for inflation). What are you doing to assure some of it will flow to your cause? First you have to identify…
TRUTH BOMB:
The key to successful fundraising is knowing your donors.
If you don’t know them, you can’t nurture them.
If you don’t nurture them, they won’t grow.
Simply staring at your bare patch of land waiting for flowers to sprout and blossom doesn’t work 99% of the time.
Why are you waiting to ‘get lucky’ the winds will just blow some seeds your way?
Likely, this won’t happen.
Even if it does happen, the seeds may not take root and grow.
Unless you do something to help them along.
In fundraising, the best way to nourish supporters is to know them better.
So you can give them what they explicitly need, not what you think they need.
You need to engage in “getting to know you” activities so you’re basing your work on knowledge, not just opinion.
There are all sorts of excuses.
Many come from a sense of ‘donors’ being primarily identified that way, rather than as the complex people they truly are. Staff are often afraid of, or at least uncomfortable with, ‘donors.’ Even many volunteers, who aren’t major philanthropists themselves, feel this way.
Have you ever heard (or felt):
Have you started working on your annual appeal and year-end fundraising plan?
It’s time!
I worked for 30 years in the trenches, so I know exactly what this time of year feels like.
It feels like you’re at the base of a mountain you’re about to scale.
And this particular year, you may feel you’re taking two steps forward and three steps back.
That’s to be expected during times of great uncertainty.
Expected or not, I know you’re still anxious and thinking “What if we don’t reach the top?”
Don’t worry, I’m here to help.
This year you may need the equivalent of a few extra granola bars for energy. And maybe an extra tool or two to help you get a grip.
Right now I want to give you a few specific, timely tips you might not be thinking about.
Here are some strategies I hope will give you a leg up, so to speak.
Here are 11 tips I’ve learned over the years.
You’ve got to make donor retention more of a priority to survive and thrive in today’s competitive nonprofit marketplace.
Research shows the average nonprofit in the U.S. loses 81% of donors after the first gift!!!!!
In and out a revolving door is too expensive to be sustainable.
To make matters worse, the probability a donor will make five consecutive gifts is only 10-15%. These numbers are just not sustainable for most organizations. By the time you’ve added a new donor most of your previous new donors are out the door.
And, by the way, did you know donor acquisition costs you money? Yup. On average, it will cost you $1.00 – $1.25 to bring in a new donor dollar. So… the value of a new donor to your organization is wrapped up in the concept of donor lifetime value. Once you have a new donor, the cost to renew them is much less expensive than the cost to acquire them. Just like in for profit marketing, keeping a current customer is easier than finding a new one. But… you have to actively engage in customer cultivation and renewal strategies.
If you don’t energetically renew and upgrade donors over time, you may as well never have recruited them.
Allow that to sink in a moment.
Might you effectively be wasting a lot of time, energy and money on acquisition? Could some of your resources be more effectively deployed to donor retention?
I’m going to go out on a limb and wager the answer is a resounding YES.
Do you know what your donor retention rate is? If you do, there’s hope for you to improve it. Read on.
If you don’t, you don’t even know there’s something that needs fixing! Read on.
Your organization won’t survive and thrive with only great fundraising technicians. You—and the entire social benefit sector—need organizational-development-grounded philanthropic facilitators. In fact, you need a team – maybe an entire village – filled with them!
This is what it looks like in a culture of philanthropy. And it involves more feelings than tangibles. What does it feel like where you work?
Your organization’s culture can make or break your fundraising – and just about everything else. If you don’t foster a culture in which people want to work, great professionals won’t apply for, or stick with, jobs. You have to be intentional in creating a culture that attracts, retains and grows professionals. The kind who will inevitably build sustaining relationships with supporters.
Here are some things you can do to build a true philanthropic culture.
To foster an authentic values-based organizational culture, you must first identify and write down the main beliefs that make up the culture. This can be simple – as little as a sentence or single paragraph – but this written manifestation of the culture you want to foster is critical to helping people understand the culture.
Here are some questions to ask yourself or, better yet, to do as a group exercise with a team of staff and/or board.
All you’ve got to do is ask!
Seriously. The number one reason people don’t make a major gift – or any gift for that matter – is no one asks them.
But I’m getting a bit ahead of myself.
Before you can ask, you have to know a few basics:
Let’s take these fundamentals one at a time.
Not everyone in your donor base is a major gift prospect. Even if they were, you probably don’t have the bandwidth to cultivate and solicit all of them right now. It’s just common sense to prioritize those donors with whom you’re most likely to succeed. There’s no hard and fast rule as to how to pick this priority group.
I generally advise starting with
Legacy gifts don’t fall from the sky.
Legacy donors aren’t delivered by storks.
You won’t find them hiding behind cabbage leaves.
You’ll mostly find them living in your donor database, volunteer roster, alumni mailing list, membership roll, client files and anyplace else folks connect with you and have a positive affiliation. An affiliation with you.
You see, the mere fact someone is wealthy does not make them a legacy giving prospect. Period. And the fact they’re wealthy and philanthropically inclined does not make them a legacy giving prospect for your charity.
The biggest indicator someone is a good legacy giving prospect for your organization is their affinity and loyalty. Generally this is demonstrated through affiliation (how they are connected to you) and behavior (what they do with you).
Of course, someone who simply shares the values your organization enacts can also be a viable legacy giving prospect. But they’re not likely to make a bequest or other type of legacy gift unless you first develop their affinity and loyalty — to your charity. So let’s begin with the fruit already picked and in your donor basket. We can look at the low-hanging fruit later. I do not recommend investing a lot of resources going after the fruit you’re hoping will just fall from the sky (though a little couldn’t hurt).
What do you most need to sustain your nonprofit through thick and thin?
A steady, reliable source of income – natch!
For most nonprofits this means loyal donors.
How do you get them?
Alas, too many nonprofits act as if all they need to do is acquire the donor; then, magically, that donor will stick with them forever. Sadly, the data shows otherwise. On average only 20% of first-time donors renew; only 43% of all donors renew. And there’s a very good reason this sorry state of affairs exists.
It may not happen all the time. But it happens enough. Too often, in fact. Does this look at all like the trajectory of how you handle a newly acquired gift?
Actively show donors love and trust. This is the best way to get them to love and trust you, and the two most important aspects of donor loyalty. Relationships that last are reciprocal. Penelope Burk, the queen of donor-centered fundraising, famously found through her research that donors’ number one desire is … please, please “show me that you know me.” If you want donors to trust you and be loyal to you, you have to trust them and be loyal to them. Simple, yes? Actually, no.
To earn trust and loyalty takes strategy. And it takes work. Mark Schaefer makes a brilliant analogy
No one can do it alone, sitting in their own little corner.
Not the E.D. Not the development director. Not the development committee of the board. Not the fundraising consultant.
One-person shows don’t work in fundraising.
This isn’t tennis, figure skating or golf. You’re not one person trying to be the best you can be, with all the glory accruing to you. You’re part of a team, all pulling together in the same direction, with the glory accruing not just to your team but also to your fans and your community.
Siloes don’t work in fundraising.
You aren’t saving up grain for the winter. Besides, simply hoarding won’t help enough. Development operations must figure out how to grow and harvest as much grain as possible so you can feed more and more people in need. Hoarding in siloes is a scarcity, not an abundance, mindset. A status quo, not a growth mindset.
If you have vision and big goals you need a team to see you through.
Begin with recruitment of stakeholders.
Look around you. Who do you see? You see internal and external stakeholders. People who care about your organization winning.
Generally, you’ll see:
Fundraisers report money is the number one reason they leave their jobs. While I do believe too many fundraisers are underpaid relative to their skill sets and performance, I’ve a strong hunch it’s not the real chief culprit for fundraiser dissatisfaction.
What is causing so many fundraisers to leave their jobs? Or leave the nonprofit field entirely?
Support. Culture. Infrastructure.
Or, to be specific, the lack thereof.
Alas, in interview after interview with fundraisers working in the trenches, I find these essential components of a productive and joyful work environment sorely lacking. This situation doesn’t usually arise out of malice. It’s born of a desperate lack of understanding about what it takes to manage people well. Of course, that’s a topic unto itself. But there’s something else that happens with people hired to work as development staff. And that’s what I want to address here.
If you’ve been around ten years or more, and have demonstrated you have staying power, it’s time to start thinking about promoting legacy giving. And not just a little. A lot.
Even during a pandemic. Why?
Because once you have a steady stream of legacy gifts maturing, you’ve secured your nonprofit’s future — in good times and bad. Not 100% of course. You’ll still need to continue with annual fundraising. But you’ll be confident in the knowledge that every year or so unanticipated income will flow into your nonprofit’s coffers, like a windfall from heaven. In fact, after a while you’ll even be able to conservatively budget for a certain amount of bequest income (based on your averages) each year.
Legacy gifts can be quite transformative for the financial trajectory of your nonprofit. Think about this for a minute. While not every bequest will be six or seven figures, it’s rare to see a two or three figure bequest. They’re all major gifts!
Except… legacy gifts won’t usually fall from the sky unless you seed the clouds.
So let’s take a look at how to do that.
If you’re like most nonprofits, you probably wish you had more major donors.
Guess what?
You can have them!
Today we’re going to look at a great tool for building those important relationships with top prospects over time.
And we all know that is what will result in the big gift.
You know how important it is to put a plan in place to build relationships, right?
It’s super-de-duper important if you want to secure major gifts.
And there’s a name for the strategic process of building meaningful relationships with potential major gift donors.
I’m talking about “Moves Management.”
Every nonprofit should have a major gifts program.
That’s where the lion’s share of the money is.
It’s a rare organization that has a mailing list large enough to raise a million dollars from a million different $1 donors. But most nonprofits do have major donor prospects hiding in plain sight.
It’s up to you to find them; then move them along a cultivation path that prepares them – and you – to make an ask that results in a win/win values-based exchange.
Let’s review 7 secrets that will guarantee your major gifts program is a success, whatever your size.
Believe it or not, this guest post appeared originally on my blog 3 1/2 years ago. I happened on it today, and thought it was still appropriate so wanted to share. One of my Clairification School students, Matt Patchell, had begun an important discussion in our online Subscriber Forum about what he termed the current “digital divide.”
He was referring to the chasm between nonprofits who are facing the digital revolution head-on, adapting their strategies to embrace its’ opportunities, vs. those sticking their heads in the sand and hoping it will go away.
Folks, digital engagement is not going away. Rather, it’s exploding.
As of late last year, one study found 43% of U.S. adults get political news online, rather than via television, radio or print media. A report from the Pew Research Center found one in five Americans get their news from Facebook. For the first time in the Center’s surveys, more than half (55%) of Americans age 50 or older report getting news on social media sites. That is 10 percentage points higher than the 45% who said so in the previous year. And that report is now three years old!
If you continue to ignore the channels your supporters frequent, and the ways they prefer to receive their information, the only thing that will be going bye-bye are your supporters.
It’s a sea change in how your marketing and fundraising team(s) operate and cooperate. Adopting is a far cry from adapting.
What does this have to do with Trump?
Everyone is saying it.
Just about daily.
“These aren’t ordinary times.”
We’re living in the face of a firehose of breaking news, and most of it is pretty difficult to digest. Let alone know how to face, handle and get through it with safety and sanity intact.
We can either retreat, live in limbo or figure out a way to navigate through this reality and find opportunities to do our work in new and better ways.
It’s a difficult assignment, because it’s not easy to know where to begin.
We want to come from a donor-centered and community-centered place, but… what exactly might that be in this extraordinary time?
“We’re not only longing for the normal that was – we’re grieving losses yet unaddressed and ignoring some of the most obvious. I know for sure: if we don’t find a way to consciously engage with our losses, when this pandemic is finally over, the soul of our country will still be locked down”
– Oprah Winfrey
I think it’s humanity and trust.
Usually we have to guess at what will feel relevant to our supporters. Today, we pretty much know. Because we hear it all the time. On the news. On social media. When we zoom with colleagues. When we talk to our friends. When we’re sheltering in place with our family.
‘Philanthropy’ means ‘love of humanity’. Yet today it sometimes seems all we’re hearing and seeing is hatred of humanity. Us and them. Insiders and outsiders. Democrats and Republicans. Left and right. Young and old. Good and evil. I could go on…
There’s a better way.
I often say “If you want gifts, you must give them.”
I’ve written about this multiple times, suggesting little gifts of useful or inspirational content – things that cost you virtually nothing – you can ‘gift’ to your constituents.
What information do you have they might find helpful, thought-provoking, inspiring or fun?
Rather than guess, why not ask?
1. You can survey your constituents directly using a simple format like Survey Monkey, or
2. You can ask your staff who work with your clients and/or supporters on a regular basis. For example:
You’re in crisis. You need contributions now, just to stay afloat. Surely your donors understand and won’t mind if you tell them to just send money. Now! While they may understand on some level, no one likes to be scolded. Not even in a crisis situation. Yet most nonprofits make a practice of regularly admonishing supporters…
Generally, I enjoy nothing than writing, writing and writing to share with you everything I’ve been learning from my clients… my coaching… my teaching… my reading…my research and studying… just what I’m absorbing from the ether. I absolutely crafting articles for you filled with strategic fundraising tips, advice gleaned from years of in-the-trenches…
These days you’re likely communicating with constituents digitally more than ever before.
That’s terrific, but… I want you to remember one important thing, especially if you’re a small to medium-sized, local nonprofit.
Philanthropy, translated from the Greek, literally means ‘love of humanity.’
Whatever you do that gets in the way of your humanity?
Stop doing it!
I really mean it.
Why?
Sure, sometimes the ‘cause’ alone is enough to drive donations. But generally this holds true only for first-time gifts, emergency response gifts, and gifts to national and international charities with large name recognition. Even in these cases, repeat gifts and major gifts are driven by human interaction.
When it comes to your current supporter base, they tend to want to engage with real human beings.
Want to know what’s not a real human being?
Every day this virus haunts us. It reminds us of what is truly important. Coming together. Helping each other. Giving. Receiving. Finding balance. Finding meaning. Being grateful for tiny beautiful things. Acting with purpose. Helping others act with purpose. Bringing joy. Experiencing joy. Feeling what it is to be human. To support. And to lean.…
Do you have some major donor prospects you’re trying to woo?
Of course, you want to start with your overall donor love program. You know, the one where you plan to communicate regularly with all your supporters – 4 to 7 purely grateful, meaningful touches for every 1 inspiring ask. You do that, right?
Good!
However… just the basic stuff won’t do it with major donor prospects.
You need something extra.
Something to really grab folks’ attention.
Something unexpected.
Something personal.
Without a little something, you’re left with just a dumb thing… like automated group mailings. Or really big ‘moves’ you never quite get around to. Or stuff, let’s face it, which just isn’t particularly thoughtful.
If you’re not retaining as many donors as you’d like, you’ve no one to blame but yourself. And I’m here to tell you why.
You’re not thanking donors properly.
I’m serious. How you handle donor acknowledgements is that important.
Sadly, most nonprofits do an absolutely rotten job of showing donors how much they are appreciated.
Part of the problem is due to focusing on acquisition at the expense of retention. Most executive and development directors don’t even know their retention rates without looking them up. According to Jay Love, founder of Bloomerang, less than 45% of fundraising offices know this answer!
So, you’re not alone. But you can do better.
DUDES! Your retention rates should be on the tips of your tongues! If you don’t know how you’re doing, how can you improve?
I hate jargon. With a passion.
Hate it. Hate it. Hate it.
Just. Can’t. Stand. It!
Yes, I guess you could call it a pet peeve.
But, really, why would you ever use jargon if you wanted to truly communicate with someone?
Just check out the definition:
“language used by a particular group of people, especially in their work, and which most other people do not understand”
— Cambridge dictionary.
When you talk to people in words they don’t understand, really, what’s the point?
Are you just trying to make yourself look smart?
Because, trust me, that’s not how it comes across.
Fighting the good fight for your nonprofit’s cause is what you do best.
Funding your mission, however, is always challenging. The planning, the lists, the headaches, the inevitable snafus that arise at any given moment… it’s a lot of effort to solicit a single donation.
And while seeking out new donors is vital to raising money for your cause, what if you could double your donations with your current donor list?
With the 3 E’s—education, ease, and encouragement—you can maximize your donations by getting more of your donors to match their gifts.
Ready to help your donors make the most of their gifts to your cause?
Let’s dive into what makes matching gift fundraising such a powerful way to tap into the hidden potential of your supporters.
You want a smokin’ major gifts program, don’t you?
Of course you do. You want to light those babies on fire!
Better put, you want to ignite your donor’s passions, light the fire in their bellies, and help facilitate the type of philanthropy that will be a win/win/win – for you, your donors and the vision your organization seeks to attain.
You can’t do this without nurturing a pipeline that lights your donors’ sparks of interest, fans the flames and patiently waits until ignition happens.
Sure, you could just light little fires. Fires that self-extinguish pretty quickly. But these aren’t the fires that will sustain you and keep you warm over the long haul.
That’s why every nonprofit, no matter your size, cause or longevity, needs to build a major gifts pipeline.
Otherwise, you’ll have nothing to smoke!
Want to learn how to stop running on fumes?
If you’re like most nonprofits, you probably wish you had more major donors.
Guess what?
You can have them!
Today we’re going to look at a great tool for building those important relationships with top prospects over time.
And we all know that is what will result in the big gift.
You know how important it is to put a plan in place to build relationships, right?
It’s super-de-duper important if you want to secure major gifts.
And there’s a name for the strategic process of building meaningful relationships with potential major gift donors.
I’m talking about “Moves Management.”
The late Jerold Panas*, fundraising guru and author of a bunch of books (two of which, Asking and The Fundraising Habits of Supremely Successful Boards, I frequently use with boards to inspire philanthropy), left us with a gem of a final article published on the Guidestar blog: Nurturing Your Potential as a Fundraiser.
It got me thinking.
All of the traits Panas lists (he calls them “verities” that distinguish consummate fundraisers from those who, I presume, just dial it in) are important. I encourage you to read the full list (or even the full book from which they’re excerpted: Born to Raise: What Makes a Great Fundraiser Great).
Today I want to focus on one trait that particularly struck me.
Impatience.
The use of Donor Advised Funds (DAFs) as a means for individuals to make philanthropic gifts continues to rise. So much so, in fact, I felt it imperative to help you understand how they work and how they may be of benefit to your charity.
Why?
Today we’re going to take a look at:
Let’s begin at the beginning.
To a large extent, they think about it the same way as anyone else. They just have more money.
It’s good to remember that major donors are, first and foremost, just people.
And like all human beings, they are on a continual quest for meaning. It’s the existential search to be all that one can be. To feel self-actualized.
And you can help them!
In fact, this is your job. This is part and parcel of your organization’s mission.
You (as executive management, development staff or board member) are a facilitator of philanthropy. Your organization exists, in part, to facilitate your donor’s quest for meaning and teach the joy of giving. To do this effectively, you must be attuned to your donors. And, since the wealthy have the ability to make a larger impact when it comes to furthering your mission, you especially must be attuned to these folks.
In the past I’ve looked at five major donor philanthropic triggers. You need to know about these things, because if you can key into any of them you’ll have a strong basis for pursuing a major gift from the prospect whom you’re approaching:
Today I’d like to review six more things you should be on the lookout for; then I’ll suggest four strategies to help you enter into your prospective donors’ worlds so you can make a win/win match – one that will help your major donors simultaneously help your cause and themselves.
Coincidentally, I found a back issue of Lifestyles Magazine from 2008 (yes, I’m a bit of a hoarder) and was struck by some of what the publication had to say—a veritable peek inside the minds of major donors. There’s a clue right in the way Lifestyles (now out of publication) describes their mission (highlights are mine):
When the new Tax Bill passed, I wrote How Worried Should Your Nonprofit Be? That was back in January, when the impacts of the new law on philanthropic giving may have seemed remote. Now the end of the calendar year is closing in, so it’s worth taking a look at some of the ways you can help your major donors get the biggest bang for their donation.
Keep in mind, of course, the primary reason people give is not to get a tax deduction. It’s to see themselves reflected in a mirror as the person, deep down, they really want to be.
That being said, if you want gifts you must give them. Help more than you sell.
And one gift you can offer is a little bit of wisdom about ways donors can maximize the impact of their gift and minimize the cost to themselves. Especially when you’re talking to major donors. Because, for most of them, the impact of the new tax law will truly be icing on their philanthropy cake.
Today I want to pique your interest in taking some time to reflect and truly consider what you’re doing and how you do it.
It’s easy to get stuck, literally and figuratively.
Stuck at your desk. Stuck doing what you’ve always done. Stuck in patterns without considering whether they still makes sense. Stuck using ingrained habits and skills that once worked, but don’t work so well anymore. Stuck working in places that drain your energy. Stuck working for causes that don’t ignite your passions.
How do you break out?
Sometimes I look to thinkers from other disciplines to help me think outside the box. To pull me away from the routine. The ‘just going along to get along.’ The following, rather than leading. The ordinary, rather than extraordinary.
Studies show over 88% of all funds raised come from just 12% of donors.
In fact, the top tier of donors account for the lion’s share of all philanthropy. Just 3% of donors give 76% of all gifts.
If you’re not focusing your fundraising resources on these donors, this should give you pause. You’re missing a really big boat.
Plus, chances are good you’re fundraising in a manner that’s not exactly cost-effective.
You’re not alone. I run into this problem all the time. Board members want to do events. E.D.s want to focus on grants. New staff think the future is all in digital fundraising. Existing staff are wedded to increasingly less productive direct mail fundraising. There’s nothing wrong with any of these strategies. However, generally they won’t give you the biggest bang for your buck. You get a huge return on investment from an individual major gifts program, which costs you roughly 10 cents on the dollar vs. 50 cents or more on the dollar for special events fundraising and actually losing money on direct mail donor acquisition.
If you know the Pareto 80/20 Rule, you might want to focus just 20% of your resources on the lower-yielding strategies and 80% on major individual and legacy fundraising.
Usually I find it’s one of the following reasons:
If you’re coming at fundraising from the perspective of “no pain, no gain,” I’d like to suggest you reframe your approach.
Especially when it comes to asking individuals, one-to-one, for passionate gifts.
As long as you hate it, you’re never going to be effective.
In fact, if anyone in your organization feels this way, you’re shooting yourself in the foot.
Why?
Because… (I really hate to break this to you)…
Donors can tell.
When donors can sense you’d rather be doing anything else than asking them for a gift, guess what happens? They follow your lead! In other words, they feel like they’d rather be doing anything else than making a gift.
Uh, oh. How can you change this equation?
“If done correctly, I would say the most donor-centric thing a fundraiser can do is ask a donor for a gift. Why? Because you are allowing the donor to change the world. You can’t get more donor-centric than that.”
— Jeff Schreifels, Veritus Group
Jeff made the comment above in response to an article by Roger Craver on the Agitator blog: Donor-Centric or Faux Donor-Centric? Check the Plumbing. It has a terrific checklist of ways to tell whether or not your organization is donor-centric (I’ve summarized the list at the bottom of this article).
Everything on the list applies to donors of all stripes. If you’re going to do major gift fundraising (and you really, truly should because 88% of dollars raised comes from 12% of donors), these tips apply in SPADES.
Jeff was offering the ultimate donor-centric item to add to this checklist, and I could not agree more.
Are you aware one of the hottest things in for-profit management over the past five years or so is “customer service,” otherwise known as “customer experience” or CX? There’s an entire industry that’s grown up around it. If you want to learn , I highly recommend Strategic Customer Service and Customer Experience 3.0 by customer…
More than ever before nonprofit leaders must lead from vision, not mission.
Why? The world is moving really, really fast. Blame it on the digital revolution if you wish. But why waste time laying blame? It is what it is. Instead, get into the 21st century. Now.
The present (what you’re doing) is nothing more than a springboard to the future.
Never lose sight of the change you’re endeavoring to bring about. That’s what folks want to invest in. Positive, transformative change.
Nonprofits have tended to forget their visions in order to justify continued existence.
Sometimes founders and other leaders become too wedded to the status quo. They can’t let their babies grow up. This is wrong. Nonprofits are founded to meet needs and resolve problems. Needs change. Problems get resolved (or they should). Nonprofits should strive to go out of business, or
In Part 1 of this two-part series I reviewed the ways nonprofit marketing and fundraising have significantly changed in recent years, and what this means for your ability to succeed in raising awareness and money.
I talked about how easy it is for leaders to blame staff, and vice-versa. It’s also easy to get sidetracked, because we’re operating in something of a Wild West frontier. And no one really is clear on the rules of the game.
Within the current zeitgeist, the job of the development professional becomes critical. Your organization needs you to lead. They need you to be an expert strategist, even if they don’t always know this.
If you’re just put into a corner and told to “go forth and raise money” or “go forth and make our name known,” you’re in for a bumpy ride. But you have the power to smooth the way!
If a monthly giving program is not one of your key strategic annual fundraising strategies, this is the year you should add it to your development work plan.
Why?
It’s your secret to being sustainable, short-and long-term. Because recurring donors give more and stay more loyal over time.
These donors can become a reliable source of predictable annual revenue that minimizes stress and uncertainty.
This is something you should seriously consider, don’t you think?
And it’s really not rocket science. It’s something you can and should do. And I’m about to give you a step-by-step process to help you maximize your annual contribution revenues.
Should you have any doubt that this will yield impressive results, take a look at
In Part 1 of this two-article series I walked you through some steps to create a rough draft of a marketing communications plan that will serve you in the current digitally-revolutionized and highly networked world. Not what you’ve been doing every year for the past decade, but something that will really serve you in today’s…
Do you think of your nonprofit event as a “fund raiser” or a “donor cultivation experience?”
The simple, obvious answer, of course, is that a good event is both.
In practice, however, successful event fundraising – galas and sport events and auctions that are worth the effort — is not this simple.
So let me ask this question another way:
What is your number one goal with your special event?
Think about this carefully for a moment. There can be a lot of reasons, good and not-so-good, for embarking on this admittedly resource-intensive strategy. Do your ends justify your means?
I’ve collected bountiful gifts for you this month — because it’s a good time to curl up next to a warm fire with your laptop and get in some inspirational reading. Remember, my motto is: “If I know it, I want you to know it!” I’m dedicated to paying it forward after 30 years of…
How Do Major Donors Think About Philanthropy?
In my last article we looked at six major donor philanthropic triggers. Today let’s look at a few more; then I’ll suggest some strategies to help you enter into your prospective donor’s world so you can make a win/win match – one that will help your major donors simultaneously help your cause and themselves.
I recently found a back issue of Lifestyles Magazine from 2008 (yes, I’m a bit of a hoarder) and was struck by some of what the publication had to say—a veritable peek inside the minds of major donors. There’s a clue right in the way they describe their mission (highlights are mine):
Are you aware that one of the hottest things in for-profit management over the past 5 – 10 years or so is “customer experience?” There’s an entire industry that’s grown up around it.
It’s something that goes beyond customer service.
Customer service is to an outbound marketing world what customer experience is to an inbound marketing world. The former you do to your constituents; the latter you do with them.
You may be asking why this is important.
Post digital revolution, nonprofits must adapt to the realities of inbound marketing. The way people find and engage with you in a constantly connected, networked marketplace has changed. Your constituencies crave interaction. And meaning. And, gosh darn it, they want you to make them feel good!
They want a full-bore, positive experience with you.
Fail to deliver? They’ll go elsewhere.
If you’ve got donors, then you have the raw material for a major donor program – and it’s easier than you think.
Begin with your own database.
Most organizations have plenty of donor prospects, without having to go outside and look for prospects who aren’t connected to you.
You know who I mean. The people your board members tend to suggest to you. Folks who may be rich, and may even be philanthropic elsewhere, but don’t have any interest in what you do. And no one knows them or can make an introduction to them.
Don’t start with the most out-of-reach prospects. You can be a major donor prospect rainmaker without having to go outside or reach too far.