By Mary P. Walker, Petrus Blog Contributor & Local Charity Board Member
March Madness and Fundraising
March Madness is upon us! I love basketball and I love this time of year. Winning teams have different strategies, and I can’t help comparing them to fundraising practices.
Big Star Strategy in Basketball
Over the past two years, a team I followed recruited a REALLY GREAT player. The coaches designed their game strategy around this player. Other players tried to get him the ball and let him score. The team enjoyed a level of success for a while. Then the players who wanted a more active role transferred to other teams. Also, at times, the star player had an off game, or got injured. The rest of the team had trouble stepping up to win.
Big Star Strategy in Fundraising
What can this teach us about fundraising? Big Stars in fundraising have the means and interest in making gifts that can jumpstart or transform your ministry. Focusing on them is a great strategy when you need to raise a lot of money quickly, such as in a capital campaign. However, like a full court press, the Big Star strategy may turn the game around, but it can’t be sustained over the long-term. Eventually the capital campaign will end, and while we hope these stars won’t go away, their intensity will wane and they will not be giving at that level into the future.
Balanced Team Strategy in Basketball AND Fundraising
A team I really love has a more balanced approached to the game. Of course, all the starters are good, but none of them are SO much better or get SO much more playing time than the rest of their teammates. The bench is solid too. One or two players can have a mediocre game and the team still wins.
Fundraising for capital campaigns has a different dynamic than fundraising to pay the bills. You should be concerned when a few “stars” give a disproportionate amount to your annual fund, especially if you are beyond start up mode. While I would never suggest that you turn away their help, if your ministry relies on just two or three benefactors, you need to recruit new benefactors and “up the game” of current ones.
What happens if your star benefactors have a reversal of fortune, die, become incapacitated, or transfer their loyalty to another organization?
One grassroots organization that I worked with had a wonderful benefactor. He had received help in the past, was grateful, and wanted the organization to grow and be there for others. Every December, he matched all gifts that came in throughout the year. The New Year got off to a great start with this money in the bank!
One December, he did not contact the organization to ask about how much he should match. He had some health setbacks and a relative took over his personal finances. There was no gift that year.
That next year was VERY TOUGH for the organization. They had to scale back, and almost had to close their offices and operate out of employees’ homes (this was way before COVID!). Fortunately, they took stock and made a conscious effort to grow their donor base. Today, paying the bills is not a problem, and there is a plan for growth in outreach and services. This experience led me to my own version of the 10% rule.
If 10% of your annual fund depends on a single source (e.g. donor, foundation grant, etc.) you need to get that percentage down! That doesn’t mean you ask that person to give less, rather you work hard in getting new benefactors and growing the gifts from the ones you have.
Why 10%? It’s been my experience in nonprofit work and life that you can “budget around” a 10% shortfall or unexpected expense--without drastically reducing programs and services. You may have to cut back here or there and not grow as much as you’d like, but you can still operate and pay for the necessities of your ministry.
Think about this in your personal life too. Unless you are truly poor or have extraordinary expenses for necessities, such as medical care, your family would probably be okay if it lost 10% of its income. You’d figure out a way. Our ministries are just as creative and resilient. However, a cut bigger than that would force most of us to have to make really hard decisions, such as laying off employees or cancelling programs.
Spring is a great time to look at the giving profiles of your annual fund donors. Do any of them give more than 10% of what it costs to operate? What would happen if such donors “went away?” How can you grow your entire benefactor list to ensure a more balanced team?
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