We’re doing a series of short posts called Mastermind Lessons.
Today’s post is the second top-level lesson we’ve found that every organization in the Mastermind needs to learn…
Your Major Donors are Remarkably Important and You aren’t Spending Enough Time or Money on Them
An organization usually knows that a small percentage of donors (your “major donors”) provide a significant percentage of your total revenue.
But an organization is usually shocked when they discover how small that number of donors is, and how large the percentage of income is.
In our experience, it’s usually around 85% of an organization’s revenue from individuals that comes from 10% of their donors.
And because the organization hasn’t sat with the numbers and really faced what they mean, the organization does not spend enough time and money on their major donors.
Here’s the example I use that helps organizations see:
Say you have a business that has 100 customers. And 10 of those customers are responsible for 90% of your revenue. You would give those customers the “white glove” treatment. They would be greeted by name at the door. They would have a special, shorter line to wait in. They would get a phone call the next day to see if their purchase worked out.
That’s common sense. But too many nonprofits don’t apply it to fundraising.
Your major donors should get the “white glove” treatment:
- Hand-written thank you cards
- Appeal letters
writtenspecifically to them, about what they care about
- Newsletters sent in large envelopes, with a hand-signed cover letter
- A call from the Executive Director after every gift
There are lots of possible treatments. You can and should be doing them.
To Keep Your Major Donors, and to Lift Them to Higher Giving, You Need a SYSTEM
Special treatment is great. Start doing it now.
But what you really need is a major donor fundraising system.
In a nutshell, here’s what your system should do:
- Identify your major donors
- Rank them so you know who to focus on first
- Build relationships with them (with the ones who are open to this)
- Make a revenue goal for each major donor
- Make an annual plan to lead each major donor to reach the goa
It’s the organizations that have major donor systems in place, and then are disciplined about running the system, that see major revenue growth. They keep more of their major donors, and lift their major donors to higher and higher levels of giving.
Does Your Organization Need This?
The good thing about this is that almost every organization I’ve spoken with recently says they know they need to spend more time and money on their major donors.
The tough thing is that very few of them know what to do next.
My suggestion: take a class like this one from Jim Shapiro, the co-founder of Better Fundraising. (And if you can’t make those dates, apply anyway because there will be another class later this spring.) And follow the Veritus Group blog.
It will take time to get great at major donor fundraising. But it’s worth your time and investment!