Many of the columns here at Philanthropy Daily focus on practical steps to help your organization improve in different areas of development. But before you can focus on how to improve your fundraising, you first have to decide what areas you need to focus on.
Where are you weakest? Are your areas of strength getting the best results? Where are the easiest opportunities for growth, and what are the difficult areas that you must nevertheless invest in to reach your goals? Are you even asking the right questions of your development staff?
One way to get answers is to take American Philanthropic’s fundraising survey, which provides nonprofits with relevant benchmarks to compare yourself to other nonprofits in a similar stage of growth.
Without solid evidence informing your strategic decision-making, it’s easy to fall into the trap of going with the crowd. Every time I speak with nonprofit leaders, I hear the same questions over and over again. Many of the questions are asked repeatedly because they are good ones, raising questions common to all nonprofits.
But others come up over and over again out of their own momentum merely because there’s an inordinate amount of ink spilled over them, despite the lack of evidence that focusing on them will improve your fundraising program. Like cats on the internet, these can be fun questions to toss around, but are ultimately a distraction.
For most organizations, focusing too much on the following questions can actually harm your organization by fixating on lower return strategies, implicitly endorsing false premises, or misallocating precious development resources.
1. How do I reach millennials?
There’s something in the American national character that fetishizes youth, and this disease seems to have struck the nonprofit sector very hard in the past few years. Development directors everywhere are waking up at 3am, sweating and out of breath, having nightmares about how all of their donors are of advanced age.
But I have news: millennials aren’t donating to your cause at a significant level because they aren’t donating to almost anyone’s cause at a significant, sustained level. And at this stage of their life they never will, because younger people are more transient, have fewer assets to give, and lack long established relationships to groups that older donors have.
Millenials now outnumber Baby Boomers in America, but their contributions to nonprofits are only 11% of the total. Millenials control only 4% of the household wealth in America, while Baby Boomers alone control 50%. This isn’t a crisis, it’s just the nature of our economy and nonprofit fundraising. Unless you are a school that needs to strategically connect with young alumni, getting new millennial donors probably isn’t even in the top 5 things you need to be worrying about. In fact, they aren’t even the most important generation to focus on.
2. What about internet fundraising?
Closely related to the millennial question is the question of how to “leverage” new technologies to increase your fundraising. It’s easy to get excited about online fundraising because it is a growing avenue of donations, and because it promises to take your message to the four corners of the globe at a cheap price. And for many nonprofits, there are some simple steps to take to increase the donations you see through online sources.
But the reality of online fundraising has never matched the prophecies that have gleefully celebrated its coming for over a decade now. In 2016, online giving made up only 7.2% of total fundraising revenue. And a high portion of those online donations were in response to other prompts, such as direct mail appeals or event-based solicitations. Not to mention the fact that online donors give less on average and are more likely to lapse than donors acquired through other means.
Companies or organizations that have an interest in selling you “solutions” to the problem of how to raise money online are so embarrassed by these raw facts that solid statistics are harder to find. Instead, you’ll find mostly grandiose claims like “online fundraising grew by an amazing 10% last year!” They don’t want you to be able to do the math: even if online fundraising did grow 10% annually for the next decade, over 81% of donations would still be coming from offline sources in 2027.
3. How do I pursue this strategy at the lowest cost possible?
Nonprofit leaders are understandably a risk-averse lot. They feel the weight of responsibility when donors entrust their funds to the leadership of an organization, and they want to do the most for the world at the lowest cost.
But responsible spending isn’t always the same as cheapness, and too often nonprofit executives are paralyzed by the inability to spend the resources that it would take to properly execute a strategy, whether through hiring additional fundraising staff, paying for additional mailings that might increase returns, or investing in a database or research tool subscription that would make their operations more efficient.
I once spoke to a board member of a local nonprofit who told me that while he often got lunch or coffee with the Executive Director, the Executive Director had never once offered to pay for the meal. It’s not that the board member wanted the nonprofit to spend $8 on his sandwich in return for his much more substantial contributions, he just thought it was normal human decency to reciprocate from time to time.
Investing in donor relations by meeting with board members was in fact a good strategy, but the leadership of that organization was shooting itself in the foot by failing to dedicate the comparatively small resources it would take to make the strategy more successful. Always think about the long-term return and the message excessive frugality might send, and not simply the upfront costs.
For most organizations, focusing too much on these questions can harm the organization by fixating on lower return strategies, implicitly endorsing false premises, or misallocating precious development resources. Before you look for answers, make sure you aren’t asking the wrong questions.
It is my goal to help purpose-driven organizations achieve their fundraising goals, craft clear and compelling communications, and achieve greater influence. Please let me know if and how I can be of help to you, shoot me an email at firstname.lastname@example.org or check out our consulting services online at AmericanPhilanthropic.com and ongoing fundraising seminars throughout the year.