By Brent Hafele of NewDay Nonprofit Solutions
The first mistake I see people make in campaigns is expecting uniform gifts. If their goal is a million dollars, they say, “Let’s get a thousand donors to give $1,000 each.”
In practice, this strategy is extremely impractical and rarely works. It’s everyone’s instinct to spread the dollar amount equally among all donors. I think this comes down to our desire for fairness and equality. However, there are two major problems with this fundraising plan.
First, you need to match the gift amount to the donor’s capacity and interest in giving. You might have a donor who is really interested in the project, but only has the capacity for a $50 gift. Because they can’t give $1,000, they don’t give at all. Or you have an interested donor who has the capacity for a $150,000 gift, but you’ve short-changed yourself by only asking for $1,000. When fundraising, you need to focus on BOTH the donor’s interest and capacity.
The second problem is that you’re asking for many, many gifts from many, many people. It’s less work to cultivate and solicit one donor to give $100,000 than to find a hundred people to give $1,000 each. So, when raising $1 million, you’re putting in an incredible amount of work to find a thousand people to give $1,000 each.
Before you despair, let me introduce a better model: our friend the donor pyramid.
As you can see, there are many “regular donors” at the bottom of the pyramid who make small gifts. At the top, there are only a handful of “lead” donors who give substantial gifts. What is interesting is that donor giving is actually an inverse pyramid. It looks like this:
When you’re looking at the dollars, the few donors at the top give the majority of the money. At the bottom, you have a ton of donors giving the $25, $50, and $100 gifts. It’s called the Pareto Principle—that 20% of the donors give 80% of the money. This pyramid will help you design a gift range chart to arrange how many top gifts, middle gifts, and lower gifts you need.
So, rather than looking for uniform gifts, break down your goal into top, middle, and lower gifts. It will make your fundraising easier and more effective.
This is just one of four major mistakes that nonprofits fall victim to during capital campaigns. Register for a free webinar on July 22nd to learn about the other three and ways you can easily avoid them!