When we conduct our Vital Signs Assessment, looking for indicators of fundraising success or struggle ahead, one data point stands out far more than any others – the number of donors who have given 20 years or more.
The greater the number of donors in that cohort, the more probable it is that that organization will:
- Secure their largest gifts in any given year from them (gifts of $1 million or more are most likely to come from those who have given 17 years or more)
- Benefit from their estate plans (the most likely significant estate givers are ones who have given for 20 years or more)
- Be the beneficiary of the Great Wealth Transfer; the greatest philanthropic wave that any of us will witness in our lifetimes
- Build endowment because loyal donors are the least likely to place restrictions on their gifts
- Withstand donor loss; while the number of giving households has declined by one-third in the last 30 years, those organizations that have a larger volume of 20-year+ donors experience much lower attrition rates
- Be able to predict gift revenue for years ahead because these loyalists are acting like living endowments (a $1000 gift given every year is equivalent to the payout for a $25,000 endowment)
- Be the beneficiary of positive word of mouth generated by these loyalists in their families, communities, churches, businesses, and spheres of influence.
So how many organizations have established this as a benchmark? I know of none but I hope some of you will reassure me that you are pointed in this direction.
Why is this metric so sorely missing? Well, you tell me.
Is it because:
- So few organizations have attracted and inspired people dedicated to the perpetuation and relevance of those organizations so that future generations may benefit?
- Boards and bosses put so much emphasis on short-term fundraising results that they never came to understand annual yields are produced by the healthiest orchards not the most aggressive harvesting techniques?
- Short-term fundraising expectations have created or attracted leaders who use institutions to build their credentials so they can move on to more lucrative jobs?
But here’s the problem. Organizations are now losing 4 out of 5 first time donors. The vast majority of those we analyze lose donors retained after the first year within the next two years. Philanthropic seeds are not taking in their soil because it is so thin and nutrient deficient. The obsession with money has leached mission from it. The short-term metrics they have been using have proven damaging to the most important metric of all.
Oh, and as many of you know, that 20 year donor usually starts with small gifts. With each passing year they are more likely to give generously within their means and/or steadily lay in store a much greater contribution that will be realized at their life’s end.
We’ve lost complete sight of the ratio of sowing to reaping.
Jim Langley is the president of Langley Innovations. Langley Innovations provides a range of services to its clients to help them understand the cultural underpinnings of philanthropy and the psychology of donors and, with that knowledge, to develop the most effective strategies and tactics to build broader and more lasting communities of support. Jim has authored numerous books including his most recent book, The Future of Fundraising: Adapting to New Philanthropic Realities, published by Academic Impressions in 2020.