Breaking the (Glass) Ceiling
Have a fundraising challenge you want to crack? Weary of doing the same old, same old, yet hoping for different outcomes? Do you want the over-the-top results that come from superior strategy?
Email me with your particular problem and I'll arrange a quick consultation offering you a practical solution you can implement. I may even use your situation to share with my readers. Names are changed, of course!
You've got good cash flow and a typical mix of donors by giving-capacity. You're getting good outcomes. You've got stable financials. Giving moves toward your all-time annual high of $5 million. It's poised to go over. Then it stalls or drops.
You've been close to breaking the barrier of $5 million several times, then you lose a high-cash donor—or two. They leave for good reasons. Someone dies. Another shifts the focus of their giving. Still another suffers a family crisis or financial setback. The cycle repeats.
This is the situation of the faith-based organization for which Susan serves as executive director.
There are many nonprofits that would enjoy stable incoming revenue, much less break an arbitrary benchmark in fundraising.
Susan attributed her organization's situation to a small potential donor base. I don't necessarily see it that way.
In the few minutes we spoke on the phone, I wasn't able to do a thorough analysis, but I did pick up a few clues.
First, although Susan's organization has a good mix of donors relative to their giving capacity, the overall base is small. The loss of cash gifts from one or two fairly sizable donors will be felt.
I'm not convinced that the size of her potential donor base is as small as she thinks, however.
She did tell me about the appreciation events they have for their middle and upper-level donors. I didn't hear much about her strategies to grow the more modest ones. Nor did I hear a description of an organized donor acquisition program.
Principle 7 of The Eight PrinciplesTM is Renew & RefreshTM. Renewing your donors should be an equal partner with refreshing—or expanding—your base.
Susan's situation is atypical in one respect. Most of the nonprofits I see are heavily focused on acquisition. Donor retention at these charities is in the tank, as there's barely any energy or resources left for tending to their stalwarts.
The result? A continual struggle to generate anything but modest entry-level gifts—even from those who are capable of much more.
The key is a balanced effort. Seek to retain as many donors as possible, while at the same time working to build your base. In this way, there is a solid donor progression. Losing mature donors—although not something you're looking for—becomes a lot less problematic.
I recommended that she take another look. Begin by considering Principle 4 of The Eight PrinciplesTM, Learn & PlanTM. Learn who would naturally support you by affinity and relationship then plan how to reach them.
Susan's organization is clear enough as to their mission. No fuzziness there. My question to her was, "Has there been a thorough vetting of how that mission is received—meaning interpreted and understood?"
This is where I believe Susan's organization could make real leaps in the size of their base. I encouraged her to examine the general demographic profile of their donors. Look beyond the organization's mission. What are attitudes and interests of donors beyond the reasons they give to her organization? Look at generational differences.
The future is in millennial giving. We didn't really talk about the age distribution of her donors but I suspect they are older, established individuals with traditional outlooks. Millennials use their faith to guide their giving, but in a dramatically different way than my generation or the generation of my parents.
For the millennial, it's not about doctrinal confession or alignment. It's about outcomes and a broader acceptance and effectiveness. Faith-based ministries that have grasped this are doing quite well—all the while without compromising their core message.
I thanked Susan for reaching out. I encouraged her to consider what I had said, to take a stab at building a stronger donor acquisition program and then circle back and let me know how she's doing—say, in six months or so.
I certainly wish Susan and her worthy organization well. I'm convinced that the donors are there for them.
Let me hear from you. Please share your situation and the challenges you face in developing sustainable revenue streams. Email me and I'll arrange a brief consult providing you with practical guidance. I'll choose some of these thorny obstacles to share, along with my insights, in upcoming columns.
Larry believes in the power of relationships and the power of philanthropy to create a better place and transform lives.
Larry is the founder of The Eight Principles. His mission is to give nonprofits and philanthropists alike the opportunity to achieve their shared visions. With more than 25 years of experience in charitable fundraising and philanthropy, Larry knows that financial sustainability and scalability is possible for any nonprofit organization or charitable cause and is dependent on neither size nor resources but instead with the commitment to create a shared vision.
Larry is the author of the award-wining book, "The Eight Principles of Sustainable Fundraising." He is the Association of Fundraising Professionals' 2010 Outstanding Development Executive and has ranked in the Top 15 Fundraising Consultants in the United States by the Wall Street Business Network.
Larry is the creator of the revolutionary online fundraising training platform, The Oracle League.
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