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.
What’s holding you back from doing something so sensible?
Usually I find it’s one of the following reasons: