Making the Case for Individual Giving
By Maureen Mahoney Hill
Most fundraisers are well aware of the fact that the majority of charitable gifts come from individuals, and yet we continue to devote a disproportionate amount of our limited resources of staff, time and budget to seeking restricted foundation grants and planning events. The future survival and sustainability of your organization rests on the support of individuals in the community.
Why Isn’t Individual Giving 72% of Your Pie?
According to the annual GivingUSA report, individual donors made 72% of the $335.17 billion in charitable gifts made in 2013. Foundations made 15% of gifts with corporations giving 5%. Total giving rose by 4.4% and the report identified the single largest influence on this increase as giving by individuals. Compare this to your organization’s sources of revenue; chances are the percentage of your annual operating budget coming from individuals is not even close to72%. Try comparing the GivingUSA percentages to the current allocation of time, effort and resources in your fundraising program. Are you investing anywhere close to 72% of your work to garnering support from individual donors?
Individual giving is by far the biggest piece of the charitable giving pie, but there are many more reasons why it should be at the top of your fundraising priority list. As opposed to foundation and corporate gifts that are typically restricted for a specific purpose, individual giving is generally unrestricted. Individual giving also creates an opportunity to build sustainability in your fundraising program. Not only is it renewable, but managed well, it also will increase over time. A strong individual giving program provides the mechanisms for acquiring new donors, renewing donor support, increasing donor giving levels, broadening your funding base and building donor loyalty. Beyond the financial impact, an effective individual giving program will help you to identify and involve leadership volunteers. A solid individual giving program is a required building block for creating a successful planned giving program and planned gifts are the lowest cost, highest value gifts nonprofits can generate.
You Have to Ask.
There are a lot of reasons why individual giving may be lower on your priority list than it should be. Asking an individual for a significant gift is personal, and because of that, it may be viewed by some as more challenging to do than a corporate or foundation solicitation. There are no RFPs to respond to, guidelines to follow or deadlines to meet for individual gifts. As a result, individual giving is easy to ignore.
While there may not be specific guidelines to follow in soliciting gifts from individual donors, there are strategies that have proven to be effective. At its most basic, individual giving is about relationships. To be successful, organizations must build relationships with their individual donors. You can’t build a relationship through the mail, so sending out a couple of letters each year is not going to cut it. The basic components of an individual giving program are simple – collecting and using good data, creating a plan with tailored approaches for specific segments of your individual donor base and making the ask.
Get to know your database and through that your donors. Remember your best donor is an existing donor so stop worrying about everyone else’s donors and start paying attention to yours. If you don’t know who your donors are and what they think of your organization, you can’t successfully solicit them.
There is a big difference between a calendar of events and a good development plan. Thoughtful and strategic planning based on data will not only ensure immediate success but also build stronger capacity for the future. Your plan should include goals, strategies for reaching those goals, an action plan and timetable for each strategy, assignment of responsibility and a budget. Communications should be an integral part of the plan. When developing your plan determine what you can do based on the resources and culture of your organization and then do it well. Consistency is critical to your success. You are much better starting small and building over time then investing in a big splash that fizzles.
The only way to get a gift is to ask for it. Start by segmenting your donors and determining the best strategy to solicit their gift. These strategies should be based on the donor’s giving history, financial capacity and level of engagement. A certain number of your donors will be best and most efficiently solicited through direct mail or electronic solicitations. These approaches are most effective with larger numbers of prospects at lower giving levels—entry level giving. Larger gifts are best solicited through personal, face-to-face meetings.
There is a great article by Katherine Swank, How to Talk to Your Donors about Planned Gifts, which provides a great framework for thinking about all individual giving. Swank calls it “Dating Your Donors,” and likens building a relationship with a donor to personal relationships – making the first move, surviving the first date, meeting the parents and finally asking for the commitment. Fundraising from individuals really isn’t that much different from dating…it is not always easy, doesn’t always end the way you hope it will, but the outcome is always worth the effort!
Identify the donors or prospects in your system that have the best capacity for a significant gift and start “dating” them. Create a cultivation, solicitation and stewardship plan tailored to each prospect. Start at a level that works for your organization – pick a number of prospects that is achievable for you given your other responsibilities. That may be one visit a month or 20. Target a gift level that is significant for your organization, $100 or $100,000 and focus on securing gifts at that level to support your mission. Once you start, keep track of your interactions and the information you gain as you move through the phases of dating your donors. Put the information in your database. Use reminders on your calendar to stay in touch and follow-up as promised. Stay connected and let them know they are appreciated.
Individual Giving is Important.
Individual giving is important for every nonprofit organization, regardless of size or mission. I have recently had conversations with several clients concerned that their organization’s mission may not resonate with individual donors. My response to that is that they need to spend some time reworking their mission and case for support. Every charitable mission is compelling if presented the right way to the right audience.
As fundraising guru, Jerry Panas likes to say, fundraising is both an art and a science. With a solid framework for fundraising from individuals, it is much more likely efforts will be successful and sustainable over the long term. Individual giving is the greatest source of opportunity for nonprofits today and in the future. It is a strategy worthy of your time and resources.
Maureen Mahoney Hill, CFRE, is an independent consultant working with nonprofit organizations to build fundraising, communications and marketing capacity. With more than 20 years of experience in fundraising, Maureen has held development positions with The Children’s Institute, The Pittsburgh Foundation, Penn State and The Women’s Center & Shelter of Greater Pittsburgh. In addition to her consulting practice, Maureen is a highly-rated instructor teaching classes on fundraising topics at the Bayer Center for Nonprofit Management at Robert Morris University and the Nonprofit Resource Center at the Carnegie Library of Pittsburgh.
Asking – A 59-Minute Guide to Everything Board Members, Volunteers, and Staff Must Know to Secure the Gift. Jerold Panas, 2002, Emerson & Church Publishers
GivingUSA 2014 Highlights. Http://www.dfwonline.org/userdata/userfiles/file/WI%20Gives/Giving%20USA%202014%20HigHighlig.pdf
The Giving Institute website: www.givinginstitute.org
How to Talk to Your Donors about Planned Gifts
Katherine Swank, J.D., Consultant, Target Analytics, a Blackbaud Company (posted 1/24/11)
Association of Fundraising Professionals (AFP) Website: www.afpnet.org