As fundraisers, we spend a lot of time on major donors–whether finding, cultivating, asking, and/or stewarding them. It seems to make sense, it’s quite difficult to meet your annual goal $50 at a time. But, that doesn’t mean that the smaller donors are not essential to your organization. In fact, they may be more valuable. That is why, this summer you should consider something different and focus on $50 donations.
Fewer people are donating money. The Chronicle of Philanthropy highlighted this shift to fewer donors giving larger amounts in a special report, The Disappearing Donor. (Note: These articles are “Premium”, you might not be able to read them unless you subscribe or visit a library.)
There is a reduction in the number of donors over the past 20+ years according to “Where Are My Donors?” At the same time Giving USA listed increased annual donations for the prior three years, the report indicated that in “2014, the latest year for which data is available, 56 percent of American households made a charitable donation. In 2000, that number was 10 percentage points higher, according to the Indiana University Lilly Family School of Philanthropy … Giving declined across every age group and every income and education level.”
How can you ensure you will have enough donors for years to come? Here are 7 reasons to focus on $50 donations.
- Smaller donors can be amazing advocates for the nonprofit. Some major donors only want to give money and not be bothered again. Smaller donors may do more – be more involved, share excitement as they learn more and, invest more over time.
- It doesn’t have to take more time to cultivate 100 $50 donors vs. a single $5,000 donor. Think about it for a minute. For the 100 donors, you have to spend time segmenting interests, writing letters, emailing, sending articles/invitations (or other stewardship touches) and encouraging deeper engagement. For an individual $5,000 donor you have to consider their interests, write a major donor letter, determine who will personalize it, find a time for that person to actually sign it, schedule times to meet with that donor throughout the year, consider personalized stewardship opportunities, and a calendar to ensure they will get done. At larger nonprofits, major donors are served by major gifts officers while other donors are often personally ignored. At small and mid-sized nonprofits, it is a matter of prioritization. Major donors cannot get all of the attention.
- $50 donors do not always stay $50 donors. Everyone has an entry level gift they give to nonprofits. Whether consciously or unconsciously, they are testing the nonprofit to see how they are treated, how their investment is used, and whether they will give again in the future. How will you treat them, how is their investment being employed and how will you encourage future giving?
- 20 years of smaller gifts can mean as much to a nonprofit as a major gift. If you have not yet started to track lifetime giving, now is the time to compile a list of 10+ year donors. Do you have some who have given for 25 years? Those are valuable donors who probably don’t get enough appreciation.
- Fewer small donations mean fewer donors in the major gifts pipeline. Ok, that brings us back to a major donor focus, but development has to have a dual strategy. You have to retain major donors and smaller contributors. It can take years of stewardship to upgrade a donor (10-15 touches) so focusing on smaller donors is not a one-time approach.
- You are laying the seeds for financial sustainability. Making your budget this year is important, but so is next year and the next year. One major donor can change their mind. All 100 of your $50 donors are less likely to shift priorities during any one year.
- Let’s take back the 80/20 rule (80% of the funding comes from 20% of donors). We have seen the 80/20 rule turn into the 90/10 rule. #7 is similar to #6, but we want it to be stressed again and again. Putting numbers to your situation will provide clarity. One donor who decides that this year they want to support their congregation’s capital campaign instead of their child’s school fundraiser can shift the stability of both. The more donors, the less the impact of any one gift.
A culture of giving to nonprofits is important for society, in general. No matter what tribe you associate with (political, religious, geographic, demographic, favorite social media, etc.), we don’t want to live as isolationists. We want to help others, that is why we work in the nonprofit sector.
Some want to raise money for a longtime church member’s grandchild in need of surgery and provide medical facilities with money for research the next day. Others understand how important it is to help religious and academic institutions cover scholarships because dues and tuitions don’t provide enough. Maybe you see that there are buildings in need of repair and cities and towns without the room in their budgets to ensure clean, safe buildings. We are a society that relies on each other but is in denial about our own part of the ecosystem. As donors decrease, the needs do not. So encourage those lower level gifts, and value each and every donor. It will make a difference now, and in twenty years.
Read more about donor retention: