95/5 is No Way to Live

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It was only 10 to 15 years ago institutions followed the Paretto principle closely, securing 80% of their gifts from 20% of their donors. Then things began to shift.

Many institutions now exist in a world where 5% of their gifts come from 95% of their donors.

One reason for this shift has been the increase in mega campaigns and a hyper-focus on transformational gifts. Inspiring seven, eight, and even nine-figure investments can be truly game changing: transforming programs, departments, and even the universities themselves and ushering in enormous positive societal impact. These gifts can enable institutions to fulfill their missions in rich and powerful new ways.

Another reason for the shift is a decline in the engagement of alumni and “friends.” This is mainly due to insufficient resources for annual fund programs and a continued devotion to solicitation methods that generations of alumni no longer respond to. Traditional strategies and tactics for engaging donors continue to lessen in effectiveness, and the population of alumni that engage via phones and direct mail continues to shrink.

Being bound by the conventions of the past is taking a toll on those building major gift pipelines, and it’s spiraling institutions toward a precipice of instability as they lose engaged donors thinking of big investments.  Additionally, a generational gap is building as studies indicate that millennials are becoming a disenfranchised donor population for universities.

All of this is taking place in the shadows of the greatest transfer of wealth from baby boomers to millennials.

The question is: do you really want to risk not engaging the new generation?

The importance of the first gifts on the path to becoming substantial institutional investors should not be taken lightly. Michael Bloomberg fondly recalls his first gift of $5 a year after graduating from John Hopkins, where his total investment now stands at $1.1 billion.

Furthermore, the ability of institutions to develop sound measurements and goals, project revenue, and build quality pools of faithful donors will become a much more difficult proposition without the aid of digital technologies.

Today’s perspective donor is hungry for meaningful communication received in the way they desire. Crowdfunding and a hosted Day of Giving through a centralized platform provides this communication. A centralized hub of fundraising provides numerous ways to grow engagement and build the pipeline:

 

1. Connecting Younger Generations Through the Appropriate Medium or Channels

Online access, multimedia content, social media engagement, and peer-to-peer asks to give are the primary ways millennials engage. Running a campaign is empowering, increasing volunteerism and deepening affiliation.

 

2. Demonstrating Impact, Transparency, and Vision for All Generations

A centralized platform has content that is rich. Storytelling is powerful, and seeing and hearing it in real-time through updates, images, and video means delivering impactful messages. Budgets can be clearly provided, and donors see progress and others investing in campaigns, compelling them to participate. This is a personal experience as told through the eyes of campaign creators, and participating in a campaign can be very connective.

 

3. Empowering Donors to Self-Identify Their Passion

With a centralized platform, donors can view many opportunities for investment. They self-select and invest in specific campaigns demonstrating their passion for specific areas, as opposed to being pigeon-holed into giving to specific funds that might relate to the college they graduated from, but no longer pertain to their relevant interests.

 

4. Integrating Development Efforts and Opportunities

Donors get connected through several levels of communications and many opportunities are laid out in a compelling fabric of amazing stories taking place at the institution. Marketing and awareness of the positive societal impact taking place throughout the institution is brought to the forefront, and in a humanizing way.

 

5. Harnessing a New Level of Stewardship

Making a direct connection to where the donor invested can keep them engaged throughout the campaign. The ability to thank donors is immediate, it’s online through email or video – in the way they engaged with the campaign and is done by the person or team of people running the campaign.

 

The bottom line is: embrace crowdfunding as a key avenue for increasing your major gift pipeline, and don’t let your future ‘Michael Bloomberg type’ donors pass you by because of out of touch engagement strategies.