06 May The Maths of Mid Value Donors
(OR The Math of Mid Level Donors for my American friends)
Firstly, well done for reading past the title. The word Math can scare many fundraisers away.
But I know that any serious fundraiser knows they need to understand more about the actual numbers behind fundraising.
That’s why I am writing a series of blogs and running a webinar with Roger Craver on this topic.
In the years I have been working in fundraising, I have noticed that many Major Donor programs fail. Most charities struggle to make them work.
You have probably noticed that most mega donations go to universities, hospitals, schools, zoos etc. Rarely do ‘classic’ charities like Make A Wish, Cancer Research, WWF and Save the Children get these mega gifts. Usually only if they are running a capital campaign.
Yet generally when we start a revenue major donor program, we think big! Maybe not $5m from Dick Smith, Richard Branson or Bill Gates BIG, but certainly aiming for over $100,000. And mostly our aim misses. Badly.
Of 75* Australian charities, including most of the top thirty fundraising charities, we see little income from $100,000 plus donations. Even drilling down to $25,000 plus we don’t find a growing pot of gold.
Note the chart below showing these charities raised about $30m from donors giving more than$25,000 in 2007. And it was about the same in 2015.
In the same time frame, total revenue from individuals went grew from $800m to $1.4bn: Clearly we are under performing in the higher value areas.
When a charity has a major donor strategy, most are aimed at donations above $25,000. But there’s a lot of benefit in working with donors who give less than that.
Some charities have done so much better by setting up systems and processes to grow the donations of people around $1,000 to $25,000 through a combination of better direct mail, stewardship and visiting.
The growth in this area is much better.
The chart below shows growth from about $45m to nearly $75m:
I don’t think we should ignore the potential from the group of donors giving at levels above $25,000 but we certainly should think about the group a little below that first.
There are more of them. It is easier to reach. You can get results very, very quickly.
In my next article, I will look at where these people come from.
* A load of Kiwi and Aussie charities come together and share analysis of donations every year in the Pareto Benchmarking study.