If the best type of fundraising is one where we create a meaningful and long-lasting relationship with our donors, how can we do that when we’re physically disconnected from each other? Furthermore, how can we do that for any type and size of gift, not just so-called major gifts?
According to the Fundraising Effectiveness Project, giving from the first quarter of 2020 was 6% behind first quarter giving in 2019, and many charities were worried that the data didn’t even show the impact of the pandemic because COVID-19 had not spread significantly by the end of March. But a 19.2% increase in donations of less than $250 was the key driver in the turnaround. The overall number of donors increased by 7.2% with new donors increasing by 12.6%.
This should be celebrated! Let’s focus our attention on the so-called “Small Donor” bucket of under $250 gifts and see how we can treat these donors like the rockstars that they are.
The Myth of the Mysterious Magical Million Dollar Donation
A quiet legal clerk who rides the subway to work suddenly leaves a nonprofit millions of dollars upon her death and no one knows where she came from or who she is. How often do we hear stories like Sylvia Bloom’s? These stories create a myth that these types of mega donations just appear overnight.
The reality is that small donations lead a bread crumb trail toward legacy gifts like this. In fact, monthly recurring donors are seven times more likely to leave a legacy gift. Organizations should be paying attention to smaller amounts in combination with the number of years or times given as an indication of overall affinity for your mission.
Some signs that a small gift may be much bigger than you realize are:
- Scheduled recurring donations on a continual basis
- Yearly donations made directly to your organization or on a community giving day
- Donation sizes creep up by 10% to 20% on each subsequent gift
Creating A Small Gift Analysis Engine
In early 2018, the Society for Human Resource Management released an article: “Understanding and Developing Organizational Culture”. While the article speaks to an organization’s overall culture, many of the advantages highlighted relate to establishing a data-driven culture at your organization:
“A strong culture can bring benefits such as enhanced trust and cooperation, fewer disagreements, and more efficient decision-making.”
According to Michael Buckley of The Killoe Group, nonprofit leaders should work diligently to ascertain important data metrics and analyze the results. Two of the most powerful tools you can use are the Fundraising Effectiveness Project and the Fundraising Report Card. Both of these tools provide the user with both beginner and advanced metrics and allows for transparency and trust.
This is why it is important for your organization to invest time and resources into developing key performance indicators that focus on items like average gift size, recurring donations and donors, and growth in giving percentages relating to specific channels. These metrics in particular will help drive small gift growth when coupled with a strong stewardship strategy.
Rockstar Treatment Without The Smashed Hotel Room
The key to growing a small donation into a major donor is simple – stewardship. The data is overwhelming on this point. According to research by The Philanthropy Centre, the focus should be on sharing with the donor the difference their gift has made. When a donor has made an above average number of gifts, a more nuanced approach can be adopted, thanking the donor for being the special kind of person that they are and talking about how much the donor means to the charity. Getting this right increases the wellbeing that the individual experiences and their subsequent giving, the study says.
There are key tactics that your organization can put into place to create a stewardship program that ensures these entry level donors are feeling like the most important part of your mission’s support system.
- Establishing a personalized series of automated emails that address the importance of the donor’s contribution to your mission
- Creating a welcome series to new donors that centers on the role of so-called small gifts driving big change
- Hosting virtual events for segments of your audience, such as a VIP dinner for your recurring donors
- Dedicating resources toward video thank yous and social media shout outs to donors
The pandemic has made it clear that small donors are stepping up in a big way to help make up for larger gifts and events that have disappeared for nonprofits across the sector. Focusing your organization’s efforts on creating a sustainable and predictable recurring gifts program from small gifts will then allow you to focus your most personalized efforts on individuals with the most obvious affinity for your organization. The key is to never assume that the size of the gift is indicative of long term impact of a donor for your organization.
Resource: listen to my new podcast episode with Whole Whale on if the idea of a donation thank you service makes any practical sense – you’ll be surprised by the answer!
Guest Author: Tim Sarrantonio
Tim Sarrantonio is a team member at Neon One and has more than 10 years of experience working for and volunteering with nonprofits.
Tim has raised over $3 million for various causes, engaged and enhanced databases of all sizes, procured multiple successful grants, and formulated engaging communications and fundraising campaigns for several nonprofits. He has presented at international conferences and is a TEDx speaker on technology and philanthropy and was recently named NonprofitPRO’s Technology Professional of the Year. He volunteers heavily in his home Niskayuna, NY.