Sunday, December 9, 2007

Does (gift) size matter?

Thanks to Unfair Park, GiftHub and The Chronicle of Philanthropy for linking to my last post: Would you rather have one $100,000 donor or 2,000 $50 donors?

There are some interesting comments on those three blogs, and I encourage you to visit them for some perspective on what I hope will become an ongoing discussion in fundraising offices around the country:

"Are we pursuing the right donors?"

On the The Chronicle of Philanthropy blog, there was a comment from Susan Racanelli that stated the obvious: "healthy nonprofit needs both types of donors in the appropriate measure." I agree fully, and don't think that either I or the anonymous donor at
Don't Tell the Donor.org -- whose blog initially started this discussion -- intended to imply that an organization should intentionally choose between the two.

In reality, very few of us would turn down a six-figure gift or turn away 2,000 small donors. This was not the debate.

(Although I did enjoy finding the images of "Giants among us" at Worth1000.com).

What the aforementioned blogs were trying to portray were the considerations that fundraisers must make when pursuing either. There are some unique differences between how you sustain a relationship with a single, six-figure donor vs. a swarm of two-figure donors.

The real strength of any development program is, of course, its ability to sustain both.

I am currently working on my department's 2008 Strategic Plan as well as our 2008 Annual Operations Plan (AOP). One of the most crucial elements of these plans is that they work together: activities that are not tied to a broader strategy will not help a development department to achieve its goals, and strategies that are unrelated to the daily operations of a fundraising program are worth less than the ink they take up on the paper.

Here are some of the broad goals that I am considering including in this Strategic Plan:

  • Decrease the lapsed donors rate (by comparing the percentage of 2007 donors who lapse in 2008 to the percentage of 2006 donors who lapsed in 2007)

  • Increase renewal rate of lapsed donors (by comparing the percentage of donors who gave in 2005, lapsed in 2006 and came back in 2007 to the percentage of donors who gave in 2006, lapsed in 2007 and came back in 2008)

  • Increase average gifts from existing donors (by comparing the average gifts of donors who gave in both 2007 and 2008)

  • Increase number of new donors acquired in 2008 compared to 2007
These are goals that apply to both our $50 donors as well as our $100,000 donors. The AOP will likely include significantly different activities for these two types of donors, but the fundamental goal remains the same.

Regardless of the size of your organization's budget, you should have a clearly outlined strategy for soliciting donors. Even if you are part of a smaller organization that does not have a full-time development officer, you should try to set up a clear set of expectations for revenue generation that are not purely financial (i.e. "raise $_____ from individuals."). By focusing on outcomes such as those mentioned above, you will almost invariably achieve better financial results for your organization than if you simply focused on dollars raised.

It is also critical that any development program have a plan for its annual activities; again, this is regardless of an organization's size. Even if it is nothing more than a calendar of the various print and electronic communications that you will send in 2008, this plan will enable you to look at your overall activities costs related to sustaining donor relationships.

This will help you to be a good stewards of your own time and the resources that your organization dedicates to fundraising.

QUESTION: What are the additional goals that should be a part of any fundraising program?