As we navigate the ever-changing landscape of nonprofit fundraising, it's crucial to stay on top of the latest trends, especially when it comes to building major and planned gift pipelines.
A recent Chronicle of Philanthropy article from Ben Gose and Rasheeda Childress focused on the importance of engaging the everyday donor, how this aspect of fundraising programs has largely fallen to the wayside in the pursuit of major donors, and how doing so negatively impacts the long-term health of nonprofit organizations.
What Defines the Everyday Donor?
The everyday donor is a term that describes donors who many of us would consider an annual donor. The everyday donor is a typical person who might make a one-time gift via check or credit card, is possibly on a recurring giving program, and they are generally solicited through mass marketing, phonathon, or other high-volume fundraising campaigns.
But A Single Major Gift Could Be Worth More Than All Everyday Donors Put Together
Throughout nonprofit fundraising, strategy is set and staff is hired with revenue generation as the driver. As The Chronicle's article points out, Massachusetts General Hospital, for example, conservatively estimates that "95 percent of the revenue in a given year comes from 5 percent of the donors." There, of the 30 percent of staff members who interact directly with donors, more than 40 fundraisers focus on major gifts, 7 on leadership and mid-level gifts up to $250,000, and 3 on the annual fund and everyday donors.
A traditional look at historic giving data tells us that this makeup is a no-brainer. A CCS study that analyzes the giving history of donors between their first gift and their first major gift reveals that most major donors have no prior giving history when they make their first major gift.
However, in aggregate, twice as many donors become major donors after established multi-year giving histories – some even longer than 20 years. And, on average, a donor will have a 9+ year giving history before making a major gift. Suffice to say that organizations should strive for a strategic balance of major and everyday donors.
What Happens if Everyday Donors are Ignored?
This is where the rubber meets the road, because when everyday donors are ignored, and not cultivated for multi-year giving relationships, not only do major gift pipelines dry up, but overall revenue and financial stability can suffer severely.
Bob Guittard, an executive vice president at BWF who oversees its new unit focused on everyday donors, says he examined nearly 50 years of individual giving at a very large public university, a period in which the institution raised more than $5 billion. During that time, 620,000 donors gave to the university, and for 98 percent of them, their first gift was below $1,000 — in other words, an annual-fund gift. The people who started at that everyday level contributed 85 percent of the money over time — a sum worth nearly $4.3 billion. “I don’t know all the things that they did during that time, but they spent money, they spent energy,” Guittard says. “They spent time moving people to give a first gift, whatever that was, over four to five decades. If they hadn’t done those things, they would have lost out on 85 percent of the revenue, basically.”
Conclusion
For more information on the everyday donor, we've pulled together a guide: "The Hidden Multi-Year Giving Data That Builds Your Major Gift Pipeline." Download your free copy today.
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