Targeting Major Donors Versus a Wider Donor Base
A common dilemma for nonprofits who rely on fundraising is whether to target large contributors or aim for a wider donor base, resulting in more smaller donations. Certainly, a mix of both is ideal. However, when concentrating (often sparse) engagement resources and efforts, there are benefits and drawbacks to both objectives.
The Wider Donor Base
From the perspective of donors, smaller contributions allow them to give more freely without jeopardizing their budgets. Almost everyone can spare a little, and when a request is manageable (and to a cause they feel passionate about), a donation is happily made. Also, this makes it possible for donors to contribute to several non-profits they support, rather than having to select only one or two causes to champion.
Trent Hamm writes in an article for The Simple Dollar, “Another benefit of the small donations is that we can support a lot of organizations that we believe in. There are many, many charities and organizations out there that we believe in and agree with the concept behind, and thus there are many that we have interest in supporting financially.”
Reflecting from the non-profit’s point of view, having more, smaller contributors hedges their bets. If an organization relies on the generosity of only a few donors, and for whatever reason, these gifts get postponed or stop altogether, it could have financially devastating consequences.
Maintaining a wider donor base involves more hustle and operational overhead. There’s a greater need to continuously engage a bigger group of people, therefore requiring increased marketing to attract the giving, and administration when processing it after. But the trade off is stability and diversification.
Small Donor Fundraising Tip: Loose change adds up! Think of the Salvation Army Bell Ringing Campaign or The Royal Canadian Legion’s Poppy Fund. These drives gather micro-donations from the public that amass big support. Both allow everyone to contribute whatever they can, without pressure or complication.
The Large Contributor
The majority of seasoned philanthropists channel their giving into one or two non-profits. Their support usually comes with a larger, bulk gift of higher monetary value. This practice is typical of businesses and big corporations. These larger donors have pruned their gifting and redirect contributions, which are generally significant, to impact and back a cause they or their company care deeply about.
Patrick Johnston states in an article on Canada Helps, “With more than 85,000 registered charities in Canada, the selection of charities to support can seem overwhelming. Experienced donors have learned, however, that rather than making a large number of smaller donations, it is much more effective – and personally satisfying – to make larger donations to a smaller group of charities.”
For a non-profit, one major donor can change the entire economics of an organization. When a financial gift of significant proportions gets injected into the budget, a non-profit can immediately accomplish goals at hand, and implement a forward-thinking plan for its future. Additionally, the time spent on nurturing a few major contributors (and the administration involved) becomes minimized. Thus, the direct benefit to the organization’s purpose becomes maximized.
GCWCC illustrates one example how, for larger contributions, “More of your dollars help those in need. The GCWCC Major Donor program put more dollars into the community because fundraising costs of 15% are capped at $750 for major donor gifts of $5,000 and above. By comparison, Imagine Canada’s national average fundraising cost for charities in Canada is 26% of the donation.”
Major Donor Fundraising Tip: The non-profit must always keep control of the follow-up. By telling the major donor when they will be contacted for the next request/effort, the organization doesn’t have to wait, impatiently and wonder ‘when’ and ‘if’ the money’s coming in (or nag the giver). Also, the seed is planted, and the donor can expect when the following ‘ask’ will be. This will allow the donor to budget and keep them from possibly being unprepared (or donating to a different cause).
The gold standard for every organization is to have a balance of both major donors, as well as a healthy, wide base of smaller contributors. Think of it like fishing – you can have several lines in the water, and fill your boat with a lot of small fish, or you can try all day for the big one, and risk not getting anything at all. Finally, remember that most major donors started off as small donors that grew. Never underestimate the value of generosity in any form, or dismiss the opportunity to foster a deeper connection for the future.