The Two Best Methods To Avoid A Downfall In Your Nonprofit’s Annual Fundraising

One of my favorite volunteer activities in the nonprofit sector is serving on the Fundraising Effectiveness Project’s Growth in Giving Steering Committee. 

The face-to-face meetings and conference calls are always insightful and thought provoking. This is especially true when those insights are cutting edge and timely in nature. This week’s gathering was certainly not an exception.

The reason for the existence of FEP is the following:

The goal of the Fundraising Effectiveness Project (FEP) is to help nonprofit organizations increase giving at a faster pace. FEP pursues this goal by providing nonprofits with tools for tracking and evaluating their annual growth in giving. Growth in giving is the net of gains in giving minus losses in giving. Nonprofits raise more money by investing more money in growth-oriented fundraising strategies that both increase gains and reduce losses. The FEP is focused on “effectiveness” (maximizing growth in giving) rather than “efficiency” (minimizing costs). FEP conducts an annual survey, provides useful growth in giving performance measurement tools and publishes gain(loss) statistics in a yearly report through a partnership between AFP, The Urban Institute and participating donor software firms. The FEP resources support growth-oriented fundraising programs.

Notice the focus on helping nonprofits increase their giving by being more effective in their actions.  

Current Quarterly Report

The most recent quarterly report summary can be found here, which includes a link to obtain the full report. 

The drop in giving outlined in the most recent quarterly report was a key part of our discussion this week. This decline though was either not felt nearly as much or was reversed by organizations focusing on two methods of fundraising.

Although related let’s take a closer look at each one.

Major Gift Fundraising

The first method of fundraising may be obvious to larger nonprofits, however small to medium size nonprofits may not realize how this method of fundraising can impact the overall level of giving to them. The organizations successfully engaged in major gift fundraising, for the most part, avoided the most recent declines.

What is considered a major gift will vary from $1,000 for small or new charities, up to $5,000 or $10,000 for mid size charities, and $25,000 or more for larger charities. Implementing a major gift focus or strategy requires moving beyond direct mail and events, although both of those fundraising methods can be excellent feeder systems for a major gift program.  

Major gift fundraising requires a commitment to relationship building and time to enable that to occur. This type of fundraising can be achieved by any size nonprofit willing to undertake those steps. The most effective group within your database of constituents to begin these steps with are individuals who are already supporting your organization, even at smaller levels of giving.  

If you have tools like Bloomerang’s Generosity Score or Engagement Meter, much of the guesswork of who among your current donors to focus on can be eliminated.

Please keep in mind the results of a major gift effort will grow over time so be prepared to invest a year or two before seeing significant results.

Legacy Giving Fundraising

The second method utilized to thwart the decline in giving we saw last quarter is similar to major gift fundraising in many areas.  

Establishing a focus on legacy giving via wills and trusts also requires a commitment of time as relationship building is enabled. In this case, building relationships provides the avenue for introducing the concept of giving as part of your donor’s estate planning.  This often provides a direct path to gifts equal in size or even larger than mentioned in the major gift section above.

Legacy giving once again is best achieved with a focus on individuals and families who have been donors to your mission before. In this case, multiple years of giving is even more crucial to knowing that there is a strong passion for your mission.

This method of giving is a completely natural extension of your major gift focus. It is also very natural to introduce the concept of legacy giving to those giving multiple years because individuals and families with a philanthropic spirit will be creating their estate planning documents with charities in mind.

You certainly do not want a donor, who has exhibited a passion for your mission, to name other charities in their estate planning documents because your organization has never mentioned how you can help with legacy giving.

Summary

Now, as you peruse the FEP Quarterly Growth in Giving Report and compare your organization’s results to the national average, you have two methods of fundraising to consider and implement to ensure the avoidance of most future declines in giving. Since both major gift fundraising and legacy giving fundraising show the greatest results over the course of time, the sooner you begin the better!