All donors, large and small, play an important role in charitable giving, yet recent data show that about half of US families today are not giving at all, and those that do are giving less than they did 15 years ago. Research from the Lilly School of Philanthropy at Indiana University shows that this is true across the board, among all organizations.
The good news is that most nonprofit organizations are meeting fundraising goals, thanks to larger gifts from fewer donors. Pursuing the extraordinary opportunity means focusing on major gifts. But what about the “ordinary” – the small or medium-sized gift?
The stakes are high: nonprofit independence and sustainability may be jeopardized when a few very generous, very wealthy donors have all the voice and clout. Such donors usually do not want all that responsibility anyway, often urging us to “bring in more people” or “diversify our funding sources.”
As fundraisers are challenged to find more major gifts, we cannot neglect our role in seeking and engaging donors at all levels of the giving scale. While true that a campaign has to focus on the top 10-20% of prospective donors to maximize results, the broader goals are best served when we give everyone an entry ramp and help them become lifelong supporters.
I have often preached that fundraisers should treat everyone well, though it is not possible to treat everyone the same. A reasonable amount of time spent with these donors is more than justified because smaller gifts are likely to be unrestricted, providing a critical revenue source. Also, most people make their first gifts at a “test the waters” level. Make sure those new donors have a good experience by bringing them into relationship with the cause – they can become larger donors. Even if they never have the money to make a fundraiser swoon, they are great ambassadors and relationship builders.
If we take our eye off the participation goal, I fear we will miss a generation of young donors and never get a chance to worry about retaining or growing their gifts.
How do we increase the small end of the pipeline?
- Create an overall engagement plan and a calendar that defines when and how these donors are touched. Measure what matters.
- Thank donors quickly after a gift. With the IRS changes, donors are less concerned about filing taxes and more interested in knowing they helped. Look at your acknowledgement plan and imagine yourself as the donor – would you feel touched and appreciated?
- Brainstorm with your board – they may have great ideas about roles they can play with these donors.
- Have someone (board or staff) call a new donor when the first gift arrives, and yes do leave a message. Or send a very quick, very personalized email.
- Create a test batch where you write personal notes or do a thank-you volunteer phone night and track if that increases future giving.
Donor engagement still works the way it always has: one donor, one cause, showing how gifts make a difference, saying thank you. At moss+ross, our goal is to help nonprofits build strong programs that work across the entire continuum to attract, retain, and grow donor commitment and enthusiasm.
If you need assistance with your annual mailings, contact us, and we will help you.
Interesting facts from the data: Source: Indiana University Philanthropy Panel Study 2001-2015
- Giving by small and medium donors is down significantly, even though total giving and household giving have hit new records.
- Today, only about half of all households make charitable gifts, compared to 67% in 2002.
- Median gifts are down by 14% since 2000.
- Larger donors are giving more. Itemized giving by households earning $1 million+ grew from $7 billion to $66 billion over a 23-year period. This now represents 66% (up from 10%) of the total itemized deductions in the US.
- The percentage of households who can claim a charitable deduction this year is likely to be 5-10%, down from about 30% before the 2018 tax cuts.