Tag: focus

Who – exactly – makes or breaks your fundraising goals?

Jim Shapiro  |  Major Donor Fundraising

We’re going to spend this month blogging about major donor fundraising, and teaching you to get better at it quickly.

And I’ll start with an educated guess about your organization: a majority of your fundraising revenue (from individuals) comes from a small percentage of your donors.

Most of our clients have at least 80% of their fundraising revenue coming from about 20% of their donors. For a couple of organizations it’s as high as 95% of the fundraising revenue coming from 5% of their donors.

Most organizations we start working with would say they ‘pretty much know that our top donors bring in most of our revenue.’ But it’s the organizations who ‘know exactly which donors bring in most of the revenue and have a plan to help them give even more’ who raise a LOT more money.

If you don’t know your ‘major donor revenue ratio,’ stop what you are doing right now and figure it out!

Once you know your ratio, you’ll instantly have a game-changing realization: you need to focus more of your efforts on cultivating those relationships.

I am constantly amazed at how many organizations don’t know their ratio. One look at your ratio is all it’ll take to know how important it is to build relationships with your top donors, and to do all you can to retain them.

And listen – I am the first one to say that major donor fundraising is not easy work. It takes time and real effort. But in my opinion it’s the most important work you can do to sustain and increase your fundraising revenue.

Consider this: if a majority of your fundraising revenue comes from a small number of donors, then you should spend a majority of your time working to keep those donors actively giving and (if possible) giving more.

Let me hit this point home for you with a short story.

Recently I was asked by our local fundraising association to talk to a group of fundraising directors. After my talk, I was approached by one of the directors in attendance. She asked me how I expected fundraising directors like her, from small organizations, to do all that I was teaching them to do. She felt overwhelmed with all of her fundraising responsibilities, and it was common for her to feel paralyzed by her workload.

My response to her question was simple and direct.

I encouraged her to figure out which fundraising activities produced the most revenue for her organization, and spend her time maximizing those activities. I also told her it was okay not to do some of the fundraising tasks on her list, especially those tasks that produce very little revenue.

She looked so relieved to know that she didn’t need to do it all!

This story illustrates two things:

  1. You are one person, and you can’t do it all. So it’s important for you to focus on the fundraising activities that produce the most revenue.
  2. In order to focus on the fundraising activities that raise the most money, you must say no to some of the tasks on your fundraising list that don’t produce revenue.

Over my 20 years of fundraising, I have seen this kind of thinking and prioritization turn overwhelmed fundraising staff into focused, energized and driven fundraising professionals. And they start raising more money immediately!

So here are your next steps:

  • Figure out what percentage of your income is coming from your major donors
  • Identify exactly who those donors are
  • Shift your thinking to prioritize everything to you do to retain and upgrade those donors
  • Make a plan for each one of those donors for the rest of the year. After all – if you make a plan for the donors who provide 20% of your income, isn’t it more important to make customized plans for your donors who provide 80% of your income?

As this month goes on, we’ll talk more about how to make your plan for each donor, how to ask them, and how to increase their giving!

Focus on Just a Small Slice of What You Do

Steven Screen  |  Ask
Focus on a small slice.

I keep a list of the ideas that are most helpful to the small nonprofits we coach and consult. Here’s one of the most important:

Be comfortable focusing a fundraising impact (letter, newsletter, event, etc.) on only a small slice of what your organization does.

Here’s why . . .

Don’t Accidentally Create a Barrier

Smaller organizations (and even some big ones) often accidentally put a barrier between donors and their gift. The barrier: they try to make the donor understand all of the things that the organization does (and even how the organization does them) before asking the donor for a gift.

You’ve seen this before. Really long appeal letters that describe everything the organization does. Or Events where the organization makes sure that all the organization’s programs get air time.

Fundraising like that is created when organizations have a mistaken impression that “if only donors understood all that we do, and how good we are at doing it, then they would give more gifts.”

I can’t begin to count how many meetings I’ve been in where I’ve heard some version of that sentence.

The problem is, most donors are usually just scanning for who (or what) needs help and how the donor can help. Those are the Two Main Questions donors are asking. So all the information about all of the programs, and how your organization does its thing, are not answering the question that the donor is asking.

The ‘accidental barrier’ I mention above happens when donors have to wade through all the information about the organization to get to what they want: a simple answer to ‘who needs help right now’ and ‘how can I help them?’

There’s one very nice bright spot in this scenario: as soon as I hear an organization talking about their whole organization I know that they can immediately raise more money. Because here’s one of the secrets of Better Fundraising’s success over the years; we work with organizations to identify powerful parts of what they do, then focus our fundraising on those parts, and begin to raise more money immediately.

Focus on Easy-to-Understand and Powerful

Instead of trying to communicate about your whole organization, what you want to do is focus on some small slice of what you do that is a) easy to understand, and b) powerful.

Let me give you some examples:

  • Parent-Teacher-Student Associations that focus on how they pay the salary of the ‘math and reading specialist’ – and what a big impact that specialist makes – when they could be talking about the 20+ other ways the PTSA supports the school’s students.
  • The overseas adoption agency that does an appeal letter focused on the travel and legal fees needed to adopt a child from a place like China. Donors in this sector know that fees and travel costs are an incredible barrier for some families. “Fees and travel costs” are a small slice of a complex program – but an easy to understand problem.
  • Rescue missions that focus on meals. They may have multiple other programs, but they focus on the meal (cost: $1.92) which is often the beginning of their impact on a person’s life.

Side note: this is one of the reasons having a fundraising offer is so important and works so well.

Your Organization’s Barrier to this approach is called “Organizational IQ”

A few years ago we invented the term “Organizational IQ” to help nonprofits realize that not every person knows the same amount about their organization.

The people who have a high Organizational IQ for your organization are: your E.D. or CEO, your ‘program’ staff, your Board, and some (but only some) major donors.

People with high organizational IQs have what’s called ‘the curse of expertise.’ They know so much about your organization that they can’t imagine that just a small part of your organization could be compelling to a donor. For your internal experts, the whole is much greater than the parts.

To be clear, having a high organizational IQ is a good thing – it’s just not helpful for most fundraising.

Why? Because most of your donors don’t understand (and usually aren’t interested in) your approach or how all of your programs work together. Most donors just want to help someone, in a powerful way, and they don’t want to have to think too much about it!

Think about your own charitable giving for a moment. For most of your own donations, how much time to you spend thinking about them? Maybe several seconds?

But most organizations try to educate their donors about their programs and their organization. They assume that if donors had a higher Organizational IQ (just like the people creating the fundraising) then donors would give more. Problem is, when you try to educate most donors as to how it all works … they begin to get bored, their attention wanders, they are more likely to recycle your letter, and your revenue goes down.

Again – you’ve received letters like this. You’ve recycled letters like this!

Because remember: learning about your organization is not what the donor is in it for. Donors are more interested in helping someone than they are interested in how your organization does the helping.

As always, there are exceptions. If you’re talking to a major donor who loves your organization and knows quite a bit about it, then by all means talk about the whole. If you’re talking to a foundation for a grant, then by all means share the whole.

But most of the time, to most of your donors, you only want to be sharing the most attractive, understandable part.

Try It!

If you have an email list, you have the cheapest way ever to try something like this. Here’s what to do: go identify some small powerful slice or part of how you help people. Then write an email to your list, share about how there is a real need right now for that slice of your organization, and ask them to fund that one thing. If the cost of that ‘slice’ is less than $100 I predict you will be surprised by how many people write in with gifts!

My guess: you’ll raise more money than a normal e-appeal. And if it works, then try it in the mail. And try it again in email.

For small- to medium-sized nonprofits, the concept of focusing your fundraising on an easy-to-understand and powerful slice of what the organization does is the surest path to raising more money immediately.

And if you’d like help identifying the compelling parts of your organization, get in touch!