There are two general guiding principles to keep in mind when setting your dollar goals: Eighty percent of the money you raise will come from 20 percent of your solicited base.1 On average, you will receive $0.20a"$0.25 for every $1 you ask for.
Regarding the second point, this can mean that for every person that you solicit for $1, each one gives you $0.25, or for every four solicitations you make for $1, one solicitation is successful. This pattern tends to play itself out at all levels, whether you are asking for $100 or $1,000,000.
In other words, if you are hoping to raise $500,000 this coming year, you need $2 million in solicitations.
If we continue with this hypothetical example, and bring in the first principle, then you will need to raise $400,000 from your top 20 percent, meaning that youall need $1.6 million in solicitations among that echelon, with the remaining $100,000 coming from the remaining 80 percent of your solicitable base (and yes, with $400,000 in solicitations).
Even within that top 20 percent, there will be a range of gifts. Every organization has its top donor. How that top 20 percent is divided will depend on the composition of your donor base, but it is good to recognize that even that top 20 percent is not distributed evenly. It might not be an exact microcosm of the 80/20 split that we tend to see in the overall pyramid, but you will certainly still see a range.
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1 With certain large-scale campaigns, this ratio actually becomes more skewed. You will see certain gift pyramids in which 95 percent of the money raised comes from 5 percent of the donor base. As you professionalize and your goals and ambitions get bigger, and as you continue to build a solid donor base and steward your major donors, you might find yourself tending toward a 95:5 ratioa"but when youare first starting out, go for 80:20.
On the 4:1 ratio of dollars solicited to dollars raised, why build that level of rejection into your goals? Itas a sobering but good idea to frontload that truism that 75 percent of the money you ask for will not come in.
Fundraisers need to get used to hearing no; it is part of the trade. Rejection is unavoidable. It doesnat matter how valid your mission, how talented your staff, and how urgent your need. There is such an intense compet.i.tion for a limited supply of philanthropic dollars out there, that the demand far outpaces what is actually available.
Of course, that isnat to say that you still shouldnat give each personal solicitation your best effort, or that you should slack off in your follow-up. The point is, get used to rejection; get used to that 20 to 25 percent rule.
Going too far over that 4:1 ratio can get an organization into trouble. In good times, you can see that ratio inch towards 3:1, but it isnat wise to rely on that for very long. Where I work, we got ourselves into trouble pre-fall 2008, when the economy was strong (or appeared to be strong), and people were being quite philanthropic. We did see a solicitation to gifts-in ratio that was pushing 3:1. Thatas a good thing, right? Yes, so long as you donat get too used to that notion.
My organization (and others) began forecasting 3:1 ratios three to five years out. Not only were they reporting out to the board such optimism, but there were also budgetary a.s.sumptions based on the 3:1 ratio that would, in a very short time, come back to haunt the entire organization. The overarching message: a few years of good times do not preclude a spate of bad times. It is better to err on the conservative side of a 4:1 ratio, and be able to report a surplus, than overstretch yourselves going for 3:1.
The interesting thing about this rule is that you canat necessarily predict who will offer a yes or a no; some years, your designated ago-toa donors might come up short, and other years, donors who have been reticent to give at the level you were hoping for might have had a fortuitous change in circ.u.mstances, allowing them to step up their giving. In other words, ask everyone, donat be surprised by the no"s, and be grateful for every single yes, even if itas a quarter or a fifth of what you had originally asked for.
When I first began fundraising, standing on the streets of Boston with a clipboard and a DNC t-shirt, our average yes-rate was closer to 20 percent, with the average contribution of around $20. During each shift, which ran from 11 a.m. to 4 p.m. with a quick lunch break; we would have, on average, thirty conversations. It was gritty worka"and at times, downright miserablea"but it did train me very quickly in taking no for an answer, while also instilling in me the need to ask absolutely everyone, even if I thought there was no chance that someone would make a gift.2 Some of the more pleasant surprises in that summer of 2006, came from conversations that I was pretty convinced were a waste of time. The converse is also true: some of the biggest disappointments were folks I thought I had pegged for a good gift (a good gift was $50 or more at the time).
Again, pursue each conversation until it has unequivocally expired, in your favor or otherwise.
Letas return to the goal of $500,000 and break it down into a hypothetical gift pyramid.
Here is a look at the top of the pyramid: In this particular instance, I set up the pyramid and took into account the 4:1 rule in such a way that I a.s.sume that each solicitation will result in a yes, but those yes-results will come in only at 25 percent of my original ask.
I could have just as easily altered the pyramid in a way that a.s.sumed a 25 percent yes rate, but at 100 percent of the original ask. That is to say, I could have made the first column aNumber of Asksa instead.
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2 The amount of daily rejection also taught me to sniff out the differences between a hard no and a soft no. A hard no, in the street canva.s.sing scene, is one in which the person says anoa and walks away. A soft no is someone who hesitates, stays put, but says the amount youare asking for is a bit much. Weall cover more on how to deal with soft noas later in Chapter 10.
Such a pyramid would look something like this: One way is not necessarily superior to the other, so long as you build in, somehow, the two basic a.s.sumptions of the 80/20 ratio for gift size and a 4:1 ratio for dollars solicited to dollars received.
Returning to the first mode of a.s.sumptions, in which we have a 100 percent yes rate, but at a quarter of the original ask, a hypothetical remainder of the pyramid would look like this: Granted, this is a hypothetical pyramid, and the math is such that the top 20 percent in dollars is slightly less than 20 percent of all the gifts in; in addition, I didnat provide a breakdown of smaller partic.i.p.ation gifts of $1 to $249. Granted, each pyramid, from year to year, from project to project, will vary. It will be largely dependent on your solicitable base; you canat raise more than your baseas capacity. If you have a small donor pool, you will have to start with modest goals.
Each year, you should set overall goals, such as the ones above. Also, each project should have its own, specific pyramid to make it more manageable. When I say aproject,a I could mean anything from constructing a new building for your organization or renovating a current one (a acapital campaign,a in the industryas parlance). It could mean launching a short-term, concerted effort to lobby for or against certain legislation at the state level. Any undertaking that merits special attention beyond the ordinary level of engagement merits its own goal-setting session, the outcome of which should be a gift pyramid.
Of course, each of those gifts (or solicitations, depending on how you structure your pyramid) should correspond to individuals. Itas no good dreaming up figures if you donat have donors to back them up. It might be a good exercise, as you read this, to think about who your top 20 percent is, and what the individual and combined philanthropic capacity of that top of the pyramid is.
So, when drawing up goals annually, be sure to consult with your frontline fundraisers, your executive director, and anyone who has donor contact to ask them about antic.i.p.ated solicitations in the coming year.
Partic.i.p.ation Goals: Building the Movement, Investing in the Big Donors of the Future.
Dollar goals are the first ones youall want to seta"they have the biggest implications for your programming, your budget, and, as you expand your fundraising operations, your staffing requests.
Dollar goals are not the only goals that your organization should focus on, however. You also need to take some time to set partic.i.p.ation goals. Partic.i.p.ation can be measured in different, non-exclusive ways. You can either measure partic.i.p.ation as a percentage increase (or decrease) over last yearas partic.i.p.ation (as measured in the total number of gifts in), or you can measure it as a percentage of your entire solicitable base. If you are a small non-profit looking to expand your visibility, but you have a distinctly limited number of people to solicit, it might make more sense to take the first approach of percentage increase in gifts, as your potential solicitable base is much less defined than that of a college or university.
I made the case for annual fund gifts when we talked about staffing, but letas revisit why we need to focus on partic.i.p.ation at all. Partic.i.p.ation is important for many reasons. Here is a short list of them: It empowers smaller donors to feel like they are part of something bigger.
It helps you to abuild your movement.a Foundations that might be considering giving to you will want to see how broad a base of support you have, as measured both in dollars raised, as well as absolute number of gifts.
It does, at the end of the day, help your organization (consider that all gifts to my organization that were $50 or less last year added up to $250,000).
It gets people on your radar for informational updates and stewardship opportunities (including newsletters, thank you phone calls or face-to-face visits).
You are creating your pipeline: most major donors today were small, annual donors in the years leading up to their big gifts.
Letas focus for a minute on the notion of the pipeline, as it validates the importance of celebrating partic.i.p.ation gifts. In fundraising lingo, the pipeline refers to the donors who are currently giving partic.i.p.ation gifts, but who will later be major donors to your organization (with proper cultivation and stewardship, of course).
If you look at the majority of major donors to a given organization, you will notice that before they were supporting the inst.i.tution at the major gift level, they were making partic.i.p.ation gifts in the years previous to their becoming major prospects.
Granted, there are exceptions to the rule. You will get the rare unsolicited gift of $10,000, which will cue you to do some homework on that donor.3 __________.
3 Remember: If you do get a large unsolicited gift, follow up immediately with a personal phone call to that donor, or visit to say thanks. Turn the thank you into a conversation as to why and how they decided to amp up their giving unannounced, with an ear toward developing the philanthropic relationship further.
For the most part, though, your major donors will be discovered through sifting through the $25a"$100 donors and finding the diamonds in the rough.
This philosophy holds true at inst.i.tutions where the fundraising operations are quite developed. Partic.i.p.ation gifts are an investment for major gift operations down the road; or at least, re-solicitation.
Iall let you in on a little secret to prove my point. When you see a canva.s.ser, like me in 2006, standing on the street corner with a clipboard, a smile, and a tragic amount of enthusiasm, or when you get that knock on your door on a weeknight around dinnertime, and you make a gift to that canva.s.ser, it might pain you to know that the canva.s.sing operation, on the whole, loses money.
Unless a canva.s.sing operation is extremely well run, it loses money. It simply costs more to pay those canva.s.sers to stand on the streets with their clipboards, or send them into the suburbs to knock on doors until 9 in the evening than the average amount that the operation brings in.
So why do so many non-profits invest in it? Because by canva.s.sing, by getting those $5a"$50 gifts every day, they are building their base. It is a glorified data mining expedition. Canva.s.sers are encouraged to get a donoras contact information, including mailing address, phone number, and e-mail. Why? So that they can be re-solicited by the far more efficient means of phone, snail mail, and e-mail. Canva.s.sers are building the lists from which organizations can then most efficiently micro-target. Those lists are then converted into e-mail lists and phone rosters for follow up solicitations, which do make moneya"and lots of it.
Canva.s.sers who hustle day in and day out to meet their daily quotas might not appreciate this bitter truth, but they can go home happy knowing that their toils have helped set up a number of donors to get re-solicited. Itas a little less glorious than the picture we have of canva.s.sing operations: the n.o.ble young people spending their summers raising support for some worthy causes, but it is important to recognize their indisputable utility. The fact that canva.s.sing operations are standard practice for large, nationally recognized non-profits is a testament to the importance of encouraging partic.i.p.ation gifts, regardless of the amount.
Not all partic.i.p.ation gift efforts lose money, of course. The canva.s.sing example is simply one way of ill.u.s.trating how important partic.i.p.ation is; how much well-established non-profits invest in it because of its value in building the movement, if not immediately helping the bottom line.
Setting partic.i.p.ation goals, as with most things in fundraising, is a combination of science and art. Take a look at last yearas level of partic.i.p.ationa"how many gifts did your organization bring in? As you professionalize your fundraising operations, you should see distinct increases in partic.i.p.ation levels, as measured by the percentage increase over the number of gifts from last year. How much your partic.i.p.ation increases will depend on a variety of factors, including the following: The reach of your organization: Are you locally or regionally based, or state or nationwide?
The specificity of your mission: Does your inst.i.tution focus on a single issue (reproductive rights, environmental justice, filling judgeships with conservatives, etc.), or are there multiple items on your agenda that your organization is seeking to advance?
The target audience: Does your inst.i.tution have universal appeal to a wide demographic of potential donors, or are you more likely to garner support from very specific segments of the population?
At some point, you will see the partic.i.p.ation curve line flatten out, or at least see a decrease in the level of the slope. This just means that you are maxing out your donor base (which is good), and there are fewer and fewer stones left unturned (which is also good). You should still strive to bring in more gifts each year than the previous year. Just be aware that you will hit saturation points along the way. If you find that your curve is flattening out, it will become a matter of maintaining that level of support. Pushing that curve back up will probably require a combination of expanding your staff, automating or systematizing certain operations within your shop, and altering your message to attract a larger, broader audience.
One very important thing to keep in mind as you set goals and come up with annual plans is that you cannota"cannota"take any donor for granted. At the beginning of each fiscal year, you are back at zero, and you have to get out there and raise those partic.i.p.ation gifts all over again. Just because a donor has given for five years in a row does not mean that he or she will give six years in a row. Or that he or she will always give at the level he or she historically has. Granted, with each year that a donor gives, he or she is increasingly likely to give again, but you cannot afford to make the a.s.sumption that a 10-year donor is automatically an 11-year donor.
I donat mean to make partic.i.p.ation sound like a Sisyphean task, but you do need to appreciate this hard truth. Just because you received 5,000 gifts last year does not mean that you can rely on those 5,000 gifts this year. To put it another way: if last year you brought in 5,000 gifts, and this year, your goal is to bring in 5 percent more, as measured by the crude number of gifts, you are not just bringing in 250 new gifts. You have to bring in all 5,250, starting from zero.
Another cautionary word: If you have had a professional shop for a few years, if you see a year in which you donat meet your partic.i.p.ation goal, and partic.i.p.ation actually decreases from the year before, donat be discouraged. If there has been a ton of bad news on the economy, unemployment skyrockets, or if any number of factors beyond your control have had unfavorable effects on the philanthropic climate, know that, try as you might, partic.i.p.ation rates will sometimes flag.
The flipside, of course, is that sometimes partic.i.p.ation increases can be achieved even amid bad news. In fact, during economic crises, the message of partic.i.p.ating, of throwing whatever you can into the bucket, will resonate across gift levelsa"from the major donors all the way down to your $5 donors. Furthermore, during economic crises, the urgency of your message is already implicit. In other words, donat throw your hands up when the Wall Street Journal is predicting Armageddon. Forge onward.
Planning, Planning, Planning: Charting Your Course to Goal Achievement.
So youave done some data a.n.a.lysis on last yearas partic.i.p.ation. Youave taken a look at your inst.i.tutionas goals, and spoken with the appropriate fundraisers and other staff to calculate your dollar goals, and figured out whom you will target as your top- and middle-range donors. Now comes the fun parta"planning it all out.
As noted in the above section, I do think it is good, when coming up with goals, to think big. However, be flexible with those goals as you enter the planning process; a rigid dedication to goals when certain aspects are unattainable does you no good. It is a good idea to defend the goals you have come up with, but remember that this planning stage is about considering your organizationas capacity and your solicitable baseas capacity, and the goals must be in alignment with these factors.
Retreat for a Day or Two.
When planning your year, it makes sense to set aside a day (or two) away from the office, away from the internet and phone, so that you can discuss your coming year without interruption.
Iam not a huge fan of team-building exercises, as we seem to do them at every planning retreat where I currently work. Iam simply not convinced that they do much to add to a productive conversation. This could be narrow-minded of me, but I donat think you need to spend half the day doing the Myers-Briggs test, DiSC training, trust falls, or similar exercises. The point of these exercises, in my understanding, is to give everyone a better understanding of one another, but Iam not sure that these time-consuming exercises cannot produce similar results as honest, one- to three-minute narratives from people at the planning session that include the following information: What they hope to accomplish in this session Their style of interacting with others What theyare afraid of What they bring to the table During your planning retreat, a.s.sign the following tasks: The mediator/facilitator keeps conversation on track, mitigates disagreements and defuses tension (by acknowledging that there is tension!).
The scribe, logs the plan, either on paper (think: butcher block!) or on a computer.
The planning session is an exercise in dividing up the many chunks of work that go into fundraising. Each staff member and each division within your department should come to the table with tasks that they are happy to take on, tasks that they are willing to take on, and tasks that they would prefer to delegate (knowing that they might get stuck with it anyway). The goal of planning is to have a solid idea of the division of labor and the pace at which it happens.
Letas take a look at some of the areas you will likely be discussing.
Retreat Topic #1: Direct Mail.
Letas start with the most basic form of soliciting: direct mail. As electronic as communication is becoming, direct mail is not dead. There are trade-offs, yes, but they exist with any form of solicitation.
The advantages are as follows: Letter appeals wonat get caught in spam filters, like e-mail.
Itas easy to code your return vehiclea"envelope, form, etc.a"to gauge the efficacy of each appeal (that is, if you include a return vehicle).
Longer form narratives do resonate with some people.
Itas the only way to reach certain audiences (i.e., our silver-haired const.i.tuents).
The disadvantages: People move, and donat always update their information, whereas e-mails remain pretty constant.
There are the a.s.sociated costs of printing and mailing. A note on this: if you include a return vehicle, do not pay for postage. It often backfires on you when you do so, as donors will raise the complaint that their gift is going towards paying for the postage.
When thinking about your direct mail campaign, and really, all aspects of your direct solicitation methods, you need to give some thought to segmenting your appeals. What I mean by this is that it behooves you to have more than a aone size fits alla mentality when crafting your written appeals. This allows you to think creatively about your donor base, and give serious thought to its composition.
You will need, of course, to find a balance between segmenting and standardization. It is easy to go overboard when dividing up your donor pool into smaller pieces.
Here are some examples of how to segment your population: Age groups Giving levels Giving consistency Affinity within your organization, if appropriate (that is to say, if people give to a specific aspect of your programming) Here are other questions that you will want to have in mind when planning your mail campaign: How many general appeals will we be mailing this year?
How many segmented appeals will we be mailing this year?
Will they all be letters, or will some be postcards?
What other, non-solicitation mailings will our donors be receiving from our organization (newsletters, event invitations, etc.)?
When will these appeals be mailed?
Who will write the appeals? (Executive Director, Director of Development, Staff Members)?
Who will edit the appeals once drafts are written?
Who will the appeals be signed by (Executive Director, Director of Development, Staff Members, Volunteers)?
What is the turnaround time needed to go from finalized draft copy to ready to mail?
Who is responsible for doing the mail merge, for pulling the mailing data?
Whoas folding the paper and stuffing the envelopes? In other words, are you handling these appeals in-house or outsourcing the mailing operations?
What type of paper are you printing on?
What type of postage will you use? First cla.s.s? Third cla.s.s? First cla.s.s is faster and will forward to a new address.
Are you including any information other than the appeal and a return vehicle (e.g., giving history, information about the organization, etc.)?
You should also, as noted, be sure to track the success of each appeal by coding the return vehicle with an appeal code, so you know which appeals did better than others. You donat have to get fancy. It can be as simple as W11 for Winter 2011, S12 for Spring 2012, etc. Either way, you want to be able to collect data to help design your future solicitations.
In the next chapter, weall focus on how to write a good appeal; the focus here is more on the logistics of things.