Are you doubling down on a low-dollar fundraising strategy?

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Greg Warner is CEO and Founder of MarketSmart, a revolutionary marketing software and services firm that helps nonprofits raise more for less. In 2012 Greg coined the phrase “Engagement Fundraising” to encapsulate his breakthrough fundraising formula for achieving extraordinary results. Using their own innovative strategies and technologies, MarketSmart helps fundraisers around the world zero in on the donors most ready to support their organizations and institutions with major and legacy gifts.

A client recently told us she was being asked by her leadership to consider cancelling her MarketSmart subscription. 

She said that last year, during Q4, the organization decided to spend more money on Giving Tuesday and its end-of-year marketing.

They hired a consultant, invested a ton in direct mail, social media marketing/advertising, and email blasts. But, unfortunately, their year-over-year results were 13% LESS than the previous year (2017). As a result, all the senior fundraising leaders were let go last week and the CFO told the remaining staff to cut costs everywhere possible. I guess the CFO figured she’d burn down the village to try to save it.

So now, our contact is desperately trying keep MarketSmart involved in the organization’s fundraising efforts so she can more easily continue to close major and legacy gifts.

 

It’s strange because our strategy has been the only thing that was really working for them.

Last year we generated thousands of leads and hundreds of highly qualified leads for the organization. Thanks to our system, wealthy, passionate donors interested in talking about supporting their mission with major or legacy gifts were raising their hands.

But too many of the organization’s staff failed to follow-up with the donors. They were either too busy focusing on events and low-dollar fundraising communications or they just weren’t interested in one-to-one fundraising at all (and neither were their leaders). So too many opted, instead, to ignore the leads and take the easier route (spraying and praying). Our main contact did what she could but she got very little support.

As a result, the gambit focused mostly on low-dollars flopped.

Oh what a better place they’d be in if they only adjusted their focus and gave well-meaning, hi-capacity supporters the attention they deserve.

 

They are definitely feeling fundraising climate change

And they are not the only ones. More and more leaders are telling me, “Yeah Greg, our low-dollar, arms-length fundraising strategies aren’t working any more. We’re losing donors. They aren’t retaining. And the only thing holding us up is our major donors and the legacy gifts we receive seemingly out of nowhere. We should have been more focused on our 80/20 a long time ago.”

 

I call it doubling down on stupidity.

Sorry if that sounds too harsh. But, sadly, our contact’s organization ignored the data we gave them from my Fundraising Report Card. Had they looked at it, they would have seen that all their focus on low-dollar donors couldn’t possibly right their ship.

Had they looked at it carefully, they would have realized that they were letting well-meaning, hi-capacity donors slip right through their fingers as a result of poor stewardship.

They also ignored the conclusions of an Opportunity Analysis we prepared for them at no cost (which ultimately showed that a focus on their major donors with face-to-face engagement had the potential to solve all of their problems relatively quickly).

Instead, they decided to spend more money on interruptive, low-dollar, impulse-oriented fundraising initiatives while ignoring the Pareto Principle. In other words, they doubled down on stupidity.

 

Then, finally, they began to consider cancelling the one thing that was truly working— MarketSmart.

Fortunately, we were given an opportunity to talk to some of the organization’s stakeholders and decision-makers. During the call we asked, “If you cancel your MarketSmart subscription, how will you raise more money? Will you continue to double down even more on additional fundraising efforts focused on low-dollar donors?”

There was no reply.

I think deep down they know they can’t achieve their goals with such a strategy. But they just don’t want to recalibrate their operation to focus on one-to-one relationships. For them, it’s easier to just sign another purchase order letting their agency/vendor send more impersonal junk mail and spam to well-meaning supporters.

We’re still working on changing their minds.

 

Are you suffering from similar circumstances?

Were your numbers down or flat last year even though the population is increasing, the economy is growing and the rich have become richer than ever?

Were your spray and pray fundraising communications aimed mostly at low-dollar donors?

Did those communications work? Did your organization achieve its fundraising goals? Or is it cutting programs?

Do you wonder if you’d benefit from a much better, more cost-effective approach that focuses on generating major and legacy gifts?

If so, contact us or get a demo. It’s free and painless. 

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