August 26, 2022
The magic fundraising bullet and eight other takeaways from the latest Network Fundraising Performance Report
By Rebecca Painter, Vice President of Development at State Policy Network
Hot off the presses! American Philanthropic’s 2021 Fundraising Performance Report, sponsored by State Policy Network, is complete and the results are in!
This survey collects data from our Network partners in all 50 states about their fundraising strategies and results so we can monitor trends, share stories, and all improve our ability to connect our work to philanthropists who want to have an impact. Here’s the big takeaway we have all been waiting for: Everything that has always worked in fundraising…
Still works.
It is hard work. It takes a long time. Relationships matter. There is no magic bullet.
It’s a hard pill to swallow. But once you accept it and get down to the tough work of connecting people to your mission to change the country, that’s when you realize the most exciting and empowering truth about fundraising: You are the magic bullet.
There is ton of interesting, helpful information in American Philanthropic’s 2021 Fundraising Performance Report. Just like all surveys, it’s best to use this one as a datapoint among other factors when weighing decisions about your strategy. Everyone reading this is in a different phase of growth, so be sure to consider which takeaways will best serve your organization. There’s no one-size-fits-all here!
With that in mind, here are eight more juicy takeaways worth noting from the latest Fundraising Performance Report. If you would like to get your own copy of the full report, you can access it here.
One of the most positive Network trends has been board development and participation. On average 82% of Network groups have board members giving charitably to their organizations, with 12% total revenue coming from their board. Even better, 95% of boards are giving referrals to their organizations, 69% are hosting donor events, and 60% are participating in donor visits. This is something to be extremely proud of.
While our board members are doing a great job cultivating donors, direct mail is still an effective way to bring in new donors. According to the survey, an average direct mail gift is $177. If you are reading this and thinking “that’s small potatoes,” remember most of these gifts grow over time or become ripe for legacy asks into the future. They can be a foundation for your pipeline, presenting you with every fundraiser’s dream opportunity to turn a $177 gift into $5,000, $100,000 or even a $1 million+ gift.
If you are running direct mail and frustrated by the results, it might be because you need to take the next step in cultivating those donors. Make sure you are thanking them after they give. Don’t forget to update them on what their gifts are making possible—in person for your largest donors.
Network digital fundraising increased from 0.4 percent in 2017 to 2.2 percent in 2021, but it still makes up a tiny sliver of the total fundraising pie for SPN organizations. The bottom line: Digital fundraising is a great strategy to reinforce an organization’s mission, but it is not our best stand-alone tool to raise money. While it runs counter to everything I want to see in my mailbox, generally, our target audience still loves long letters full of news about what we are up against, how things could be different, and how our donor can be the hero to save the country.
I’m not saying digital is a waste of time. It’s smart to spend some time investing in digital strategies. It’s an important way to bring in young donors who will make a small gift and fill a pipeline for later years. But it’s important to recognize that digital is a low-dollar pipeline, not a major donor strategy, and apply your time and energy appropriately. In most cases, digital should account for a smaller amount of your time and energy.
Now, there are always exceptions—shout out to the Libertas Institute in Utah who has found a way to blow digital out of the water by using their Tuttle Twins series as a hook! There are others in our Network also doing digital fundraising well. If you are interested in this area and believe it could be beneficial for your organization’s donor strategy and pipeline, start learning from them and testing digital for yourself. The key to experimenting and not making yourself crazy is to start small and see if something works before scaling up.
As your organization grows, think about expanding your prospecting program into other areas. Get referrals from current donors. Go to events where you know your biggest prospects will be—even if those events have nothing to do with policy work. Ask your board to help you get meetings with specific prospects. The more targeted you are in your prospecting, the bigger the return will be.
If you can dedicate one person on your development team to spend their time strategizing and fine-tuning your prospect program, you will see bigger results. If you are a one man/woman shop, put time on your calendar a few hours every week to develop a strategic plan for prospecting. It’s incredibly important.
Are you reading this and rolling your eyes because you’ve mastered these things? Great. You can still do more. I challenge you to take a page out of the playbooks of some of the best fundraisers in the country (and kudos to several Network CEOs who already do this). They have figured out how to build relationships with some of the wealthiest Americans in the country—people with real capacity and genuine affinity for our missions but who don’t know much about our organizations. These leaders are getting invited to functions with these philanthropists overseas, in their homes, at exclusive clubs and institutions they’re part of. And sometimes these leaders and fundraisers are waiting more than a year to make asks because they are getting to know these philanthropists, finding common ground, and building substantive relationships. This personal, relationship-focused work of connecting your mission to the impact a prospective donor wants to have in the world is the pinnacle of fundraising.
Many of these prospects, as well as current Network donors, are giving through Donor Advised Funds (DAFs). DAFs are a tax-friendly, private way for donors to invest in causes they care about. According to the survey, 10 percent of total Network revenue is coming from DAFs on average. That number will grow.
While many DAF donors let us know who they are, we all die a little inside when we get the call that we’ve received a generous $100,000 gift and have no idea who it came from. It feels daunting to steward the gift of a faceless person. How in the world are we supposed to extend our gratitude and let them know about all that they are making possible with their gift?
According to Peter Lipsett at DonorsTrust, we shouldn’t just shrug our shoulders and move on: “Send a note to the DAF provider and ask they forward your thanks to the anonymous donor. A thank-you email will be much easier to send than a note in most cases. Include your contact information so the donor has a singular point-of-contact should they choose to follow up. Not all DAF providers will be willing or able to pass a note on, but that doesn’t mean you shouldn’t try.”
We have talked about mail, prospecting, stewarding gifts, and all those things takes time. So much time! According to the survey, Network development professionals are prioritizing their time mostly by major gifts first, and planned giving consistently falls to the bottom of the list. I get it. Who has time to think about a gift that might come 10 or 20 years from now when you have mail to get out, a CEO to prep for a visit, seven donors to call, a donor visit of your own in two hours, a junior staffer to coach through a problem, and—oh no!—a program staffer just called to see if you are available for an hour-long urgent meeting?!
I understand how this feels, and it is not good. Take three deep breaths, and know that it’s okay not to get everything done in a day. Be sure to always call or see your donors that day—nothing is more important—and then move planned giving toward the top of your list, right under major gifts.
Here’s why: Planned giving is a major gift. If you don’t make it a priority, it will never get done, and you are leaving millions of dollars on the table by not moving it towards the top. Think about it this way: If the person who had your job 10 years ago made it a priority, your organization would likely be getting more than a million dollars a year in additional revenue. Likely a lot more. Start your planned giving strategy now. You can start small by simply letting donors know you have one. I challenge us all to not only change the survey results from 50% of SPN organizations that have a Planned Giving program in place to 100%, but to also personally show a jump in reporting commitments in legacy gifts the next time we conduct a survey.
The survey also shows that, overall, only 38% of us are doing a pipeline analysis (i.e., an analysis of donors and what their giving levels they are). This sounds boring, and some of you may be napping just reading the words “pipeline analysis.” Lord knows I yawned when I saw it in the survey. I got into this business to connect with people, not to stare at data! But then I slapped myself awake, and you should, too. The data matters as much as the people. If we don’t know who and how donors are moving from one tier of giving to the next, then how do we know what is working and when to do more of it? This information is incredibly important to take your organization to the next level. Make time to do it at least once a year. Twice would be even better.
One of the most inspiring characteristics of this Network is that every state and organization is unique. Everyone is in a different phase of growth. We all have different and creative ways of working toward our shared vision of a freer, more prosperous, and more peaceful America. It’s good to learn from each other and from tools like this Fundraising Performance Survey, but remember that you get to decide what’s most beneficial to your organization’s fundraising goals and strategy.
The most important piece of success is for your CEO and board to have a vision that can overcome political cycles and inspire people beyond political tribes. You must be working closely with your CEO to break down silos within your organization so that your development people are talking with your policy people and communications people, and everyone is on the same page, ready to win. You must be able to balance inspiring your donors with managing back-end data analysis—the nuts and bolts of a healthy development shop.
At the end of every day, remember this: YOU are the magic in your organization’s fundraising. No single strategy or new trend is going to outshine you. Spend your time engaging with donors as much as you can and have fun doing it.
And please lean on me or any of your friends at SPN and your peers in this Network along the way. We are in this together.
There are several more insights in the full report, and I would love to send you a copy for your organization’s planning and benchmarking. Click the button to request a copy, and I’ll send it directly to your inbox.
