What if Peter Drucker was a fundraiser?

What gets measured, gets managed

Peter Drucker was a world-class management consultant, author and professor. Born in Austria, he moved to the United States shortly before World War II. Throughout his career, he spoke and taught management techniques and ideas that are taught in business schools around the world.

In some of his works, he had a particular heart for the non-profit sector, so much so, he wrote an entire book dedicated to the sector in 1990. Perhaps it’s just me, but reading his Managing the Nonprofit Organization: Practices and Principles made me think that he knew that the non-profit world was not for the faint of heart. All sorts of levels of constituents, challenging goals and difficult problems make the for-profit sector almost seem like a walk in the park.

One of the most quoted saying of Drucker is “What gets measured, gets managed”. It’s a call to have a numerical understanding of where we are in our organizations, and one particular area of non-profit management we don’t always have that understanding is fundraising.

When I talk to colleagues in the non-profit world, and you bring up fundraising, you would have sworn I just dropped a four-letter word. It’s the thing that no one likes to do and no one wants to talk about, and it’s certainly not something we are good at managing (or measuring, for that matter).

A Tool to Use: Your Giving Ladder

For those that aren’t familiar with the tool, this is referred to as a “Giving Ladder”. What the Giving Ladder does is that it shows you where your donors are in terms of their giving levels, and it can be helpful in a number of ways.

Not only does it give you an idea of where your donors are in terms of giving levels, it can give you an idea over time of how your fundraising efforts are working, and it can lead to deeper questions, “How are we at attracting new donors?”, “How are we at keeping our current donors?”

The above chart is a hypothetical chart of a very small non-profit. At the first year, the organization secured 11 donors and raised $710; an average of $65 per donor. The second year, the organization secured just two new donors, yet grew their fundraising by 58% to $1,125. This organization saw their average donor give nearly 34% more, from $65 to $87. You might be asking yourself, what is happening?

Getting Comfortable with the Pareto Principle

The Pareto Principle is something you know, even if you don’t know it by the name. The Pareto Principle basically says that 80% of an outcome is going to come from 20% of the participants. Fundraising is no different. 80% of your funds are going to come from 20% of your donors. The key to fundraising is keeping your donors and attracting and growing new donors.

Moving Older Donors up the Ladder, Getting New People on the Ladder

The success of the fundraising effort of our fictional non-profit came from two very powerful sources. First, the non-profit was able to grow donors and move them up the giving ladder. Last year’s $250-$500 donor became this year’s $500-$1,000 donor; a $50-$100 donor became a $100-$250 donor. This success only comes about when you have consistent communications with your donor. Continue to tell your story, discuss your activities and show how the donor’s investments are making positive impacts in the community, and you can begin to grow people on the giving ladder.

Secondly, new people were added at the bottom of the giving ladder. The number of small donors who give $0-$25 and $25-$50 grew by 33%, which is a very respectable number. These small donors today can become larger donors tomorrow. Find out who these individuals are who are donating and continue to communicate with them and challenge them to give more once you have a solid relationship with these donors. You have to remember; you are not getting, primarily because you aren’t asking.

Conclusion

Some of our hesitancy with fundraising comes in the feeling that we need to land that one big donor, or maybe we are hesitant to make the big ask, or we just don’t know where to begin. Try to create a giving ladder for your own efforts and if you have past data, plug those numbers in as well and see if you are effectively getting older donors up the ladder and brining newer donors on the ladder.