Climbing the Fundraising Ladder

Learning about Giving Ladders

For leaders of small non-profit organizations, fundraising can often feel like a daunting challenge, a topic frequently avoided or poorly managed. Yet, as the renowned management consultant Peter Drucker wisely stated, “What gets measured, gets managed”. Drucker, who dedicated an entire book to the non-profit sector, understood that this world is "not for the faint of heart," filled with diverse constituents and complex problems. His insight underscores a critical gap in many non-profits: the lack of a clear, numerical understanding of their fundraising efforts.

It's time to demystify fundraising and transform it from a feared necessity into a strategic driver of your mission. A powerful, yet underutilized, tool for achieving this clarity is the "Giving Ladder".

This simple framework visually represents where your donors stand in terms of their giving levels over time. It offers invaluable insights, helping you answer crucial questions like: "How effectively are we attracting new donors?" and "How well are we retaining our current supporters?". By providing a snapshot of your donor base and tracking progress over time, the Giving Ladder reveals the efficacy of your fundraising strategies.

Consider the example of a small, hypothetical non-profit. In its first year, it secured 11 donors and raised $710, averaging $65 per donor. By the second year, despite adding only two new donors, fundraising grew by a remarkable 58% to $1,125, with the average donor contribution increasing by nearly 34% to $87. This significant growth, with minimal new donors, highlights a fundamental principle in fundraising: the Pareto Principle. You likely know it even if you don't recognize the name: it states that approximately 80% of an outcome comes from 20% of the participants. In fundraising, this means roughly 80% of your funds will typically come from just 20% of your donors. The success of the fictional non-profit illustrates this perfectly, emphasizing that the key to sustained fundraising lies in diligently keeping your existing donors and strategically attracting and growing new ones.

The impressive growth of this non-profit stemmed from two powerful strategies. First, they successfully moved existing donors up the Giving Ladder. A donor giving $250-$500 one year became a $500-$1,000 donor the next, and a $50-$100 donor ascended to the $100-$250 tier. This upward movement is not accidental; it's the direct result of consistent, meaningful communication with your donors. To achieve this, you must continually share your organization's story, detail your activities, and, crucially, demonstrate how your donors’ investments are making tangible, positive impacts in the community. When donors understand the difference their contributions make, they are inspired to give more and increase their commitment.

Secondly, the non-profit actively added new people at the bottom of the Giving Ladder. The number of small donors, those contributing $0-$25 and $25-$50, grew by a respectable 33%. These seemingly modest contributions are vital, as today's small donors can evolve into tomorrow's larger supporters. Identify these new individuals, continue to communicate with them, and cultivate solid relationships. Once a strong connection is established, don't hesitate to challenge them to increase their giving. A critical truth often overlooked in fundraising is that you aren't primarily failing to receive because people don't want to give; you're not getting contributions because you aren't asking.

Many non-profit leaders hesitate when it comes to fundraising, often feeling an overwhelming pressure to secure a single, large donor, or simply not knowing where to start. Others are hesitant to make "the big ask". The Giving Ladder offers a practical antidote to this anxiety. Begin by creating a Giving Ladder for your own organization. If you have past data, plug in those numbers to instantly visualize your donor base and assess whether you are effectively encouraging older donors to increase their giving and successfully bringing new donors onto the ladder. This simple, measurable approach empowers you to manage your fundraising efforts with clarity, confidence, and compelling results.