Setting fundraising goals too often means the board telling staff—you did great (or not so great!) this year. Increase that next year by 10%. But that’s a little like my spouse telling me he expects that next year, Janet Levine Consulting—which is actually just me–should bring in 10% more than it did this year. Well, to do that, there are a number of things we must take into consideration:
- Are we also going to increase our resources? For a nonprofit fundraising program resources include staffing, a vetted prospect pool, money to spend on fundraising initiatives from direct mail to buying lunch for a potential donor, measurable impacts.
- Is the board willing to increase its funding giving and getting by 10%? If the board isn’t really behind this effort, why should anyone else be?
- How is the economy doing? Let’s get real here—overall, charitable giving accounts for 2% of the GDP. On rare occasions, typically when there are several headline grabbing catastrophes, it goes very slightly above that. Last year, it rose to 2.1%. Often, it goes down to 1.7 or 1.8%. We’ve got a very narrow row here. If the economy rises, your organization may very well grow also. But if it shrinks?
There are many better ways to think about where you want to go and how you are going to get there. The first is considering whether you want/need to grow, and if so, what does that look like?
Growth is not always in the best interest of your organization. Sometimes, just doing what you are doing but doing it more effectively and efficiently is a better focus. That said, increasing fundraising results is always desirable.
Before you decide how much more you must raise, consider how much more effectively you need to be. Too many nonprofits spend most of their time fundraising from afar. That is, they send out appeals, have large events, post donate now things on social media. While these techniques are important for reaching large numbers of donors and prospects, being an entry point for many donors, and a comfortable, lower level spot for many of your donors, it is also a place where donor attrition looms large.
In the United States, over 60% of all donors who make a first-time gift to a charitable organization never ever make a second gift. Each year thereafter, about 35% of these donors depart.
Relational fundraising, however, tells a different story. Here you are dealing with a far lower number of prospects—perhaps 3-5% of your donor base. As you reach out to these prospects, you not only begin to prepare them for larger gifts, you also more tightly connect them to your organization and help to develop more loyalty.
Loyal donors—those who regularly support you—are your best friends. Growing those numbers makes more than just sense; it makes a lot of dollars, too.