There are a number of “best practice” benchmarks that organizations can use to measure their health, as well as to set goals that are useful to improving their fundraising programs.  Here are three fundraising benchmarks that are generally accepted:

1) Because 85 percent of the money given away by the private sector – foundations, corporations and individuals – comes from individuals, a healthy organization has at least 50 percent of its private sector income coming from a broad base of individual donors.

2) The breakdown of income from individual donors is usually as follows:

·  10 percent of all donors contribute 60 percent of the money

·  20 percent of the donors contribute 20 percent of the money

·  70 percent of the donors contribute 20 percent of the money

3) An organization’s development efforts are focused more on major donors than smaller donors, although all are seen as important to the overall health of the organization – and the goal of working with donors is to invite donors to give bigger and bigger gifts every year by building their loyalty to the organization. 

In the last two years, we have seen a number of challenges to these traditional best practices. Keep in mind that the vast majority of donations and the majority of money given is derived from donor income: Donors have jobs and they donate some of what they make. Most people remain employed, so most money is still available. This is why individual giving is not going down very much.

However, as we segment our donors, we see different patterns emerging, depending on where donors get the money they give and how much they care about the organization to which they give. As we look at all our donors and predict which ones are our most stable and reliable, we see that they are not always our major donors; instead, they are the donors that tend to contribute $100 to $1000: the mid-range donors. Unfortunately, these are the donors that usually get the least attention. Organizations with even a mediocre fundraising program usually deal fairly well with two types of donors: those who give small gifts of $25, $35 or $50; and those who give large gifts of $2,500 and up. But all the donors that give in the $51 to $2,499 range will rarely get the treatment that would make them want to give more.

Three different donors

Emmie Lou Barrister gives $25 a year to her local Friends of the Library. This library has a very good fundraising program in place, so Emmie Lou gets a prompt thank you (sent within 48 hours of receiving the gift), and she gets the quarterly newsletter. The library is not Emmie Lou’s favorite organization, and she doesn’t expect more than a thank you, a newsletter and another request from this organization.

Jose Vazquez loves libraries and loves this library in particular. He gives $5,000 a year. He gets a very prompt thank-you call from the Executive Director, a lovely note from the Chair of the Board, and he is invited to a donor appreciation breakfast at the library. The director calls him at least twice a year to tell him about something happening at the library, and she sets up a visit to ask him to renew his gift every year. Jose is satisfied with how he is treated as a donor and will continue to give at this level, as he is able.

Phyllis Thigpen also loves this library and actually uses it quite frequently. She brings her nieces to readings in the children’s room and often donates books to the book sale (as well as buying books at this sale). She gives $200 three times a year to the Friends of Library, basically sending $200 every time she is asked. Phyllis’ salary allows her to save money, to travel a little and to donate about $3,000 a year in total. She gives a lot of $50 and $100 gifts, but outside of her church, this is her biggest gift. She gets a lovely thank-you letter for every donation, as well as the newsletter. 

All three of these donors are important, but Emmie Lou – who is probably never going to give much to the library – and Phyllis, who was giving the library her second biggest gift, are getting treated almost exactly the same way. Fast forward to this year: Jose’s investments have gone way down, and he has to cut his gift back to $500; Emmie Lou decides to consolidate her giving into fewer, bigger gifts and cuts the library out altogether to focus on the Food Bank; and Phyllis continues to give $200 every time she is asked.

All three of these donors are typical of what we are finding in this rollercoaster economy: Individual giving is not going down significantly, but major donors, particularly those who give from their assets, have had to cut way back. As a result, the top 10 percent of donors are often not producing the same amount of income they used to. Smaller donors are also cutting back. They are cutting out organizations that they don’t care so much about and are focusing on fewer organizations. Many organizations are seeing their number of donors drop.

But people with stable jobs and steady incomes continue to give, and they will give more if they get more attention. In our example, if the development office paid attention to Phyllis’ year in and year out giving, then asked the coordinator of the book sale for a list of book donors and saw Phyllis’ name on that list, he or she would realized that the library has someone who clearly cares about it. A simple thank-you phone call would probably yield the information that Phyllis is also a library user.

So, we must add another best practice to our list:

4) Pay attention to our mid-range donors. Thank-you calls, noticing the longevity of their giving, inviting them to volunteer or help in some other way, and making sure they are invited to make planned gifts will ensure that they continue to give and, as they can, give more. Our new donor breakdown will look like this:

·  5 percent of donors contribute 25 percent of income

·  20 percent of donors contribute 40 percent of income (the mid-range donors)

·  20 percent of donors contribute 20 percent of income

·  55 percent of donors contribute 15 percent of income

Most of our development effort will now be focused on these mid-range donors – with, again, the knowledge that all donors are important.

By Kim Klein, a nonprofit consultant who provides training and consulting through Klein & Roth Consulting (www.kleinandroth.com).