The 80-20 Rule is dead!
76/10, not 80/20!
Last year the Congressional Budget Office released a report about wealth in the United States. Here are some points to consider:
- The top 10% of families held 76% of total wealth in the U.S.
- The average was $4 million net among the top 10% of families after paying off debts
- The bottom 51st% to 90th% accounted for only 23% of total wealth
- The entire bottom 50% of the U.S. population holds just 1% of the wealth in the U.S.
This backs up another report that found that 44% of Americans live in “asset poverty” with just 3 months worth of savings. In other words, you can stop targeting almost half of the people in America with your fundraising efforts.
It also means that the 80-20 Rule is dead. I guess now it should be called the 76-10 Rule.
Where are you focusing your acquisition and retention efforts?
If your plan is to move people up the pyramid, you’ll have a hell of a hard time doing that with people in the bottom 50% (with no liquidity or assets).
Here’s an idea: Aim to acquire people with wealth!
Then, once you acquire those new WEALTHY donors, survey them to determine:
- If they really have assets (and wealth)
- How old they are
- If they are highly educated
- Whether or not they have a donor-advised fund or family foundation
- Why they care
- Who inspired them to be concerned about your mission
- What assets would they like to give
- How would they like to give them away
- And more
It ain’t rocket science.
The amazing thing is that the wealthy want to build a relationship with you and your organization. They want to give. But you have to understand who they are and what motivates them first. Then you need to cultivate the relationship with personalized, relevant, highly contextual communications.