What’s Behind the Loss of Small Gift Donors?
For some time now, we’ve been seeing the signs of steady decline in small gifts.
If you’re a fundraiser for an organization that relies heavily on gifts under $250 through direct mail, you need to be thinking seriously about this. Very seriously.
How has this come to be? According to the Institute of Policy Studies, American households earning $100,000+ increased their donation budgets by 40% between 2003 and 2013 while households earning less than $100,000 decreased their donation budgets by 34%.
If you’re saying to yourself, “So what? Year after year Americans give more money. What’s the big deal?” Here’s what this 34% drop in small gifts should mean to you: attracting donors means work and investment. As a consequence, nonprofits seek to maximize income while minimizing what it takes to raise the funds.
What happens is the reliance on major gifts increases every year as the base of givers under $250 is replaced in favor of major gifts.
The problem with this is that major giving is a hit and miss proposition depending on the economy and its up and down swings. Inevitably then, the time comes when the proportion of restricted major gifts begins to cause problems if the nonprofit – perhaps your nonprofit—has neglected small gift fundraising. Bills still have to be paid, salaries still have to be met. Unrestricted income is badly needed. When one thinks of the potential damage to local nonprofits like food banks, schools, and local cultural organizations, this is a trend that’s truly worrisome.
The loss of small gift donors dries up the impetus for mid-level and some major donor giving, it limits the growth of loyal donors, depletes vital unrestricted income, and plays real havoc with the values of diversity and community building so essential to healthy organizations.
So what’s the solution?
Rescigno’s believes it’s time for nonprofits to pay attention to this disturbing trend. We’ve come up with a plan to retain donors, build loyalty and commitment, and ensure the future by building greater value in your base of small donors.
Need a retention plan? We’ve got one.