“The juice is not worth the squeeze.” I’ve heard that expression (which, I confess, I hate) several times this year from nonprofit CEOs. They’ve said it referring to a number of fundraising tactics. In different conversations with different CEO’s this past year, I’ve heard variations on the juice versus squeeze refrain about direct mail appeals, soliciting churches, the Combined Federal Campaign, and #GivingTuesday. More and more long-time nonprofit leaders are seeing that the fruits of strategies from prior years just aren’t delivering the results that they had come to count on in years past. In addition, for many, the efforts to ramp-up some new[er] strategies in the hopes of attracting a new generation of donors is going slowly. The result: disappearing donors and fewer donor dollars.
Now, hear me out: those who are getting good results from any of the strategies I just listed should continue to do them! I’m not advocating for abandoning any specific strategy. And I can’t remember when I have ever suggested that someone cease doing what’s working. What I am saying is that more and more organizations are finding that the list of what works is getting smaller.
The past strategies that are being complained about, typically, have one thing in common: they tend to bring in small(er) and mid-size donors. If you are like many organizations, you may be seeing that whatever fundraising initiatives your organization has used in the past to bring in smaller gifts may be having a diminished ROI.
This is a problem. Most first-time donors don’t arrive on your doorstep with a $1M check in-hand. Rather, most give a series of smaller gifts as their passion for and commitment to an organization grows. They generally give smaller donations as they get to know an organization. For that reason, it’s critical for the fundraising profession to address the diminished ROI of small and mid-level donor tactics.
In addition, as we see a greater and greater portion of donor dollars coming from a smaller number of people, it’s essential that nonprofit organizations develop strong major gifts programs. According to Giving USA 2019, while charitable dollars were up slightly last year (but down when adjusted for inflation), the percent of Americans that are donating to a registered charity is down 10% since 2000. Donor dollars are coming from a smaller pool of people. As Steve Dubb reports in the Nonprofit Quarterly this week, almost one-third of all donations this year may come from the top one-half of the top 1% (in terms of wealth) of the U.S.
Having been a fundraising professional for decades, I recall days when people used to assume that only large nonprofit organizations with multiple development professionals—like hospitals and universities—had major gifts programs. Small nonprofits tended to venture into major gifts only for the purposes of a capital campaign.
Today, everyone needs to have a major gifts program. While a major gifts program might not look the same at a large, multi-staff organization as it does at a small nonprofit organization, the smaller organizations (less than $1M or $2M in budget size) should also have a major gifts program – even if they don’t have a development professional on staff. This means deputizing non-development professionals as “gift officers” and investing in training for non-development professionals to know what a “gift officer” is and does. It also means getting clear about who your prospects are which, of course, means wrangling the donor data and employing some analysis—perhaps also some wealth screening. And, of course it means learning to tell your story effectively. None of these things are easy for small organizations with limited resources, but if philanthropy is part of the funding mix—or if philanthropy needs to be part of the funding mix—small nonprofits are going to have to engage and get better at these essential components of a major gifts program. Otherwise, with the disappearing middle and the growing number of things on the juice not worth the squeeze list, they are going to find themselves without philanthropic support.
If you’re a small nonprofit organization with limited resources including limited staff, knowing what to do and where to begin can be challenging, but we’re here to help. We have experience helping small organizations launch major gifts programming. Book a free, no-obligation 30-minute consultation to talk with us about where your organization is and where you want to go. We’ll offer suggestions and talk with you about next steps to help you get going as quickly as possible.
Are you a resolution maker? Do you set professional goals for yourself and your organization? If so, make it your #1 resolution for 2020 to begin a major gifts program to move the support for your organization forward.