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Structured Fundraising

At its best, fundraising is a structured process. Like all processes, it is most effective when it is guided by quantitative measures.

Many people, and especially finance committees, feel the only quantitative measure that matters is money. However, when other measures are given greater significance and money is treated as a collateral benefit, fundraising is more effective and efficient.

From the perspective of Mission Enablers, the definition of effective fundraising is:

Attaining the annual fundraising goal while increasing donor generosity, growing the number of donors, and creating a sustainable funding stream

Every structured process has defined steps. The major steps in fundraising are:

1 Profiling the Ideal Donor

2 Identifying Suspects (creating a pool of potential donors)

3 Qualifying Potential Donors (determining the interest of the suspects)

4 Cultivating Prospects

5 Receiving an Initial Gift from Prospects

6 Cultivating a Second Gift from First Time Donors

7 Cultivating Increased Generosity from All Donors

8 Cultivating a Multi-Year Pledge from All Donors

9 Cultivating a Bequest from All Donors

How your organization performs each step, depends on the sector your mission is in, your community’s culture, and the skills of your staff. In addition, there are multiple ways to perform each step. For instance, some of the ways (sub-steps) nonprofits identify suspects are mass mailings, events, personal introductions, encouraging donors to introduce others to the fundraising team, and talking with alumni and their families.

The ideal quantitative measures use the number of individuals or the percentage of individuals who move from one-step to the next and the time it takes to move the average individual from one-step to the next. If you know that for every 100 individuals at Step 2 there are 10 individuals who reach Step 6 in 6 months, you know how many suspects are needed every month to reach your new donor goal this year. You can also look at the attrition rate for each intervening step and determine how to raise your success rate at step 6.

If you apply the same measurement process to the sub-steps for each major step, you will immediately know where to focus your attention as you optimize your process. The quantitative measures will also tell you where your efforts were successful and whether pursuing additional efficiency (shortened time) or effectiveness (more individuals moving from one step to the next) is a realistic expectation or worth the effort.

The measurement process may also point out flaws in less immediate preceding steps. It is generally accepted that it is relatively easy to receive a small one-time gift from an individual (Step 5). Which implies it is significantly more difficult to receive a recurring gift from individuals (Step 6). When you can quantitatively demonstrate what is generally accepted you have the opportunity to decide whether a tighter filtering process might be justified in one or more of the preceding steps. In other words, is it cost effective to try to move every individual from Step 2 to Step 6 or which individuals should be released from the process to reduce costs (time, postage, emails, phone calls, invitations, etc.) before reaching Step 5?

It takes work and time to cultivate even a one-time donor. Some one-time donors become major donors. Therefore, many fundraisers are reluctant to release any individual for fear of losing a big fish. However, by releasing those you feel have a low probability of become repeat donors (even if you are wrong), you provide yourself with more time to cultivate the remaining donors. Effective early cultivation lays the foundation you need to have more major donors, multi-year pledges, and bequests.

Next Step:

Define all of the sub-steps your fundraising process employs between each of the major steps listed above

Analyze your fundraising history to determine the attrition rate between steps and sub-steps

Map your fundraising goals onto your attrition rates and determine where you need to significantly increase efficiency, effectiveness, or both

Set annual goals for increasing efficiency and effective for each step and sub-step

Trusting any new process is difficult. The more one feels that something significant is at risk (the sustainability of your mission in this case), the harder it is to trust a process you have never used. Paradoxically, the more that is at risk the more necessary it is to have a strong well-structured process.

Without a strong, proven, and well-structure process it is easy for fundraising to falter when a key individual leaves the organization. In other words, your mission has a higher level of sustainability with a strong, proven, and well-structure process regardless of how well your current informal methodology is working.

Take It Further:

Is there a way to do a side-by-side comparison of the preceding process with your current system to demonstrate to yourself and others that the preceding is more efficient, effective, and results in more successful fundraising at a lower cost?

What software or other tools could you employ to help you track and report the quantitative measures for each step and sub-step?

What process will you use to shift your board’s and senior management’s attention away from dollars raised and onto efficiency and effectiveness measures?

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