My coaching work with the development directors of two community-based nonprofits in Chicago has led me to remind frontline fundraisers of the 80:20 rule (You know, 80% of a nonprofit’s gifts come from only 20% of its givers), and of the revised 90:10 version.
Some smaller nonprofits can’t relate to either ratio, because their donor pyramids don’t look like either one. Their gift tables don’t necessarily include one or two really big donors or prospective donors. Instead, their constituencies include several capable of making what other organizations might see as mid-size contributions. Rather than a single donor giving 10% of a campaign’s overall goal those organizations might need four or five donors to hit the 10% mark.
In one of my latest coaching sessions I found myself explaining it by telling the development director to look for the small number of donors who will contribute the lion’s share of your nonprofit’s gifts. Oh, and by the way, YOU are the lion, the hunter of those donors. That seemed to resonate.
As I explained to him, this means, regardless of what your gift pyramid might look like, it remains vital that you keep your eyes on those few who will have the greatest impact on your bottom line – on your institutional future. You, the fundraising professional, must become the hunter of those precious few, because when you hunt successfully the entire pride eats.
An organization large enough to pay for a wealth screening review of constituents has little trouble identifying those few who need personal attention in order to cultivate their major gifts. But an organization without the resources to pay for a wealth screening can still identify who needs personal cultivation. Here are two simple ways to do that.
Find your nonprofit’s cutoff point for major donors in four, maybe five simple steps. 1) Note the total amount given to your nonprofit over the past, let’s say, five years. 2) Next, sort your donors by the total amount given over the past five years, in descending order. Those who have given the most will be at the top. 3) Then add up the total gift amounts until you reach 90% of the total amount given. 4) Finally, count the number of donors whose support has provided that 90% of your total contributions. These become your most valued potential future major gift donors, deserving your personal attention. possible 5) If the list totals fewer than five names go through the exercise again, looking for the 80% mark; again, count the number of donors who have contributed 80% of your total gifts. If you still don’t count at least five names continue, using smaller percentage amounts, until you can identify at least five donors.
Conduct several suspect referral and rating meetings to invite your volunteer leadership to help identify the most promising suspected major donors. You might start with your governing board. If it includes a development committee, that’s who you want at your first meeting. Bring a referral/rating worksheet and share it with everyone present. You may see a sample of what a referral worksheet looks like at : http://thefrontlinefundraiser.com/resources/ under the “Forms & Templates” tab. Prime the pump – bring a list of names about whom you are already curious, hopeful that some of them might be identified as having major gift potential. Plan to introduce this form to other leadership groups to identify new names to cultivate. Get on the agenda for every board meeting to invite those present to go through this valuable exercise with you. Make it part of your institutional culture. Also identify which volunteers are willing to play helpful roles in this important work. You can even invite a recent new major donor to review the form with you.
In either case, if you haven’t already done so, this will give you the basic information you need to establish your minimum gift amount to qualify as a “major gift.” By looking for those who have given over a five year span you allow for the possible multi-year pledge to help set your threshold amount. It might be $10,000; it might be $1,000. Regardless, you can now use this threshold amount to look for and cultivate additional major gifts.
Roar, lion, roar.