It’s always been a big piece of our practice to work with organizations that are trying to start individual giving programs. As most of you fundraisers out there know, individuals is really where the money is. If you add in family foundations and bequests, individual donors give more than 80% of the philanthropic dollars year after year.
Sounds like a no-brainer fundraising strategy, right?
But a real individual program takes time. A long time. Just like your strongest friendships, real and lasting donor relationships are built on years of trust and experience. No matter what you do, you cannot rush that process.
What takes so long? Well, first you need to attract their attention and get them in the door to experience the great work your organization and the donor can do together (acquisition).
Then, you need to get that donor to make a second gift which is really not as easy as it sounds. In fact, our entire philanthropic sector could benefit from an improvement of second gifts. Currently only a little more than 2 out of 10 new donors give a second gift.
Once you get them past the second gift, renewal rates improve, but they still aren’t great. Across sectors and channels the overall retention rate is not even 50%. Remember that most people still think about philanthropic giving as annual, so you may be waiting a minimum of two full years to get a third gift.
The powerful return on investment for fundraising is in the higher levels of giving. Sometimes a “major donor” may come in as a large donor, but often even the most generous philanthropists start out with a “test” gift to get a closer look at the organization and its work. So, our work is to build relationships over time that lead to a higher level of financial commitment.
And then, of course, after the donor falls totally in love with the organization over many years and views it like family, they may leave the organization in their will or estate plan.
Are you doing the math? This is going to take years.
Whether you are starting with your first direct mail piece or building a planned giving program, progress will indeed seem incredibly slow and, depending on the communication channel, expensive at first. But for most organizations, it’s really worth the effort.
Individual giving is the long haul. It’s building a stake and diversified pyramid of donors that you can depend on. Foundations change their guidelines, corporations look for a fit with their marketing goals, and few-to-none of either foundations or corporations give in a down economy.
Also, depending on your organization’s mission, having a group of individuals that support your work and will advocate for your vision can be an incredible extra asset that is often left untapped in good times and bad.
If you’re thinking about building giving from individuals, don’t wait to get started. We’ve had people call us when their government or foundation grant doesn’t come through, looking to fill the gap in this fiscal year with gifts from individuals. While there are things that can be done immediately to raise revenue, it’s not going to be an immediate fix.
Creating an individual giving program takes longer to germinate and bloom. And it takes consistent care and feeding.
Start now! We have a two-part blog post on making the case for fundraising investment that could help you get going: Spotting Fundraising Opportunities and What to Put in Your Case for Fundraising Investment .
For those of you who already have an individual giving program, take heart. You’re in it for the long-haul, but it will be worth it!