Why should you care?
The Agitator ran an article about changes in giving that ought to concern us all. While overall giving was up last year, more of the money came from wealthy donors. Smaller dollar gifts declined. Do read the article, and the study, Gilded Giving, it references.
In the article, Roger Craver points out some disturbing ways this trend can hurt the sector – and the world. One of the most dangerous is that having fewer, larger donors leads to skewed priorities. Soon, only nonprofits doing work approved of by the wealthy get funding. You can see where that leads, right? I urge you to read the article first. Then come on back for my take – focused on your fundraising program.
This is a problem – a big one. Why?
Smaller-dollar donors feed your whole program.
Most people don’t jump onto your list with a sizeable gift. Even wealthy people may choose to make a smaller gift to test the waters. You need many small donors so some of them will move on to larger gifts.
A broader base of support is stronger.
Along those lines, a donor pyramid that’s top-heavy might seem wonderful. (Fewer donors to care for and more money!) But it’s less stable.
Think about it. What happens when three of your largest donors become interested in a different organization and leave? Disaster!
Your donor base is a living, growing, changing thing. Give it a good foundation.
Smaller-dollar donors talk.
Many donors without the financial capability to make large gifts are still friendly with people who do have that capacity. They socialize with them: at religious organizations, volunteer activities, their children’s schools. If your donors have a great opinion of your organization and feel well-treated, they can introduce you to others who may have greater capacity.
If they feel ill-treated and talk about that… well, that’s not good.
What to do about it
1. Customer service counts.
Don’t let them feel like small donors. Every person who contacts your organization should feel well-treated. This doesn’t have to mean every person talks to the CEO. But every person should feel heard.
2. Good communication, even if mass, can work.
Read Lisa Sargent’s case study on the power of great communication. She’s my hero.
3. Thank them well, regardless of the size of their gift.
Resist the urge to mail out tax-receipts to some donors and real letters to more “important” donors. Thank every single donor – $1 or $1 million – with genuine, personal, gratitude. Need help with that?
4. Keep good records.
I’ve said this often, but don’t consign your database to the lowest-level staff person and forget about it. Get the information right – for everyone. Seeing your name misspelled says “you don’t matter much” loud and clear. Or, a personal example I’ve used before: I’ve asked a former employer to use my first name when they write. Using Ms. Cahalane feels COLD. Like I wasn’t part of the family for a dozen years. It gets fixed… until a new staff person is added. Then I’m back to being a stranger.
5. Don’t end the relationship.
Yes, it costs money to solicit donations. But if you begin chopping the lower-dollar donors off the list simply because of their gift amount, you’ll degrade the value of your list. Gift size alone is not enough information. Loyalty matters. Engagement matters.
And how many times have you heard about a bequest from a donor who had only given small amounts? The dollar amount of her giving wasn’t a reflection of the organization’s meaning to the donor.
6. Retention is king, but acquisition still matters.
I am a huge advocate for retention. We all talk about it a lot, but still don’t pay enough attention to it.
But even the most retention-minded organization will lose donors each year. You need to replace those donors! So pay attention to your acquisition efforts. And understand that it takes time, effort and money to acquire new donors. Plan for it, be patient. Fundraising is about growing relationships. They rarely pop up, fully grown, overnight.
7. Every donor is a hero.
Yes, I mean it. And you should, too. Don’t get so lost in the dollar signs that you forget the humanity and generosity of every donor. They don’t have to turn over their money to your organization. They choose to. They’re your partners – and that goes for the donor giving the smallest amounts, too.
8. Segment, but don’t confuse ability with passion
Yes, you need to segment. You probably can’t offer personal attention to everyone in your database. But that’s not an excuse to make some donors feel less important.
Gift size doesn’t necessarily reflect passion. Do you know the Bible story of the widow’s mite? It reminds us to look at the sacrifice the donor makes, not just the size of the gift. For some donors, that $25 gift is weighty. It means giving up something important – security, a little treat, perhaps even a meal. Another donor’s gift of $25,000 might not come at much of a cost at all to the donor.
It’s always a reminder to me not to judge a donor’s value by their gift size alone.
Your mildly interested but larger donor may have acted on a whim. Or perhaps it was a one-time gift instigated by an event or a friend. But I bet you have lower-dollar donors who have given loyally year over year.
Do you need to mail as often? Maybe not. Test and see.
9. Reward loyalty
Even $5 donors who give year after year should be recognized. Create a loyalty program. It doesn’t have to be expensive: create a group, give it a name, and set them off in your annual report. Refer to the group name often. Thank them for their loyalty – not just after a gift.
10. Offer ways to make smaller gifts more often
Some donors give lower dollar gifts because that’s what they can do right now. But next month, they might be able to give again. $100 a year might be out of reach, but $10 a month might work well.
Offer them the opportunity to become a monthly – or even quarterly – donor. Make sure when you create systems for charging their card monthly (set it and forget it!) that you don’t do likewise with your gratitude. They shouldn’t become uninteresting once they’re regular givers. They should become more interesting.
Erica Waasdorp has lots of information on monthly giving programs, including free tools.
Every donor counts
Smaller-donor dollars can be some of the nicest, most inspiring people you’ll meet. So go ahead and keep a sharp eye on growth opportunities. Give as much attention as you can to your pool of major gift prospects.
But don’t allow yourself to fall into the trap of valuing donations above donors. Small can be mighty. And you need them!