60:40 Rule For Donors?

March 8, 2011      Admin

Usually I agree wholeheartedly with the advice proffered by Canadian fundraiser Fraser Green.

But he recently wrote this article — Donors Love 60:40 — with  which I beg to differ.

Fraser argues that donors care primarily about what you do (i.e., the need you are addressing), and very little about how you do it (which he treats a sort of institutional ‘inside baseball’). These words crystallize his point:

“When I was a young fundraiser, I learned an expression that has stayed with me to this day. It remains my most important piece of philanthropic wisdom. It goes like this: “the institution has no needs”.

That’s right. Your charity has no needs. The people or trees or animals you help have great needs. Your charity is simply the organizational vehicle that gets the donor’s gift to those in need. It’s a three link chain. The donor. Your organization. The need. In this chain, your organization is very small – while the donor and the need are very big.”

He then makes this recommendation:

“Everything you write or say to your donors should follow the 60:40 rule.Sixty per cent of what you say should be about the cause. Forty per cent of what you say should be about your organization.”

Now, I accept the main thrust here. Yes, the need is uppermost in your donor’s mind. Jeff Brooks blogging in Future Fundraising Now reminds us of that in virtually every post. Got it.

But consider two further points.

First, donors are becoming far more performance-oriented. They are scrutinizing organizations much more closely on your results … and your strategies and effectiveness for achieving those results (see BayBuzz post, Fundraising Perfection). In other words, many donors do want to know how your nonprofit will meet the need they’re concerned about better than your competitor, who’s also knocking on their door. Talking about ‘how’ need not be mind-numbingly ‘institutional’; that’s merely a wordsmithing issue.

Second, I submit that for two specific types of donors, the ‘institution’ is awfully damn important — donors making bequests and donors committing to sustainer programs (i.e., monthly gifts). In both of those cases, the donor has moved beyond an immediate response triggered by perceived need, and has moved on to make an assessment about the recipient organization. They’ve decided that that specific organization is the one they trust to get the job done … even after their death in the case of a bequest. They know the need will persist; the question is … will you?!

That’s an institutional commitment. And if you’re going to try to raise that kind of money — money from genuine loyalists — you had better make sure your prospect knows why/how your nonprofit is the better bet.

That said, maybe this is a timing issue. In which case, I’d still disagree with Fraser’s 60:40 rule.

Perhaps to win that first gift, it’s all about need. In which case 90:10 (cause:organization) might be more appropriate than 60:40. But as the cultivation process moves along, make no mistake, your prospective donor begins to evaluate your organization. And your communications ‘ratio’ will need to shift to address their further questions about your effectiveness.

Other thoughts? Weigh in!

Tom


7 responses to “60:40 Rule For Donors?”

  1. Eric Pratum says:
    March 8, 2011 at 9:10 am

    In part, the argument here may come down to semantics – how you or I or Fraser Green define donors, what groups we put different types of people in.

    Regardless, at some basic level and then again at a higher level, it comes down to demonstrating value, does it not? If I donate to your organization because we have a longstanding relationship and yet you send DM pieces, emails, or whatever else to me that focus solely on telling the story of people that you’re helping, I might feel that you are not demonstrating as much value as you could be because I might want to hear now and again about the organization itself. On the other hand, someone that donates solely because you initially gave them the feeling that you were the most effective charity for XYZ cause might feel that you are later not demonstrating value if your newsletter or website has a segment that focuses on your board.

    It really really depends, and that is one of the multitude of reasons that it helps to segment, “talk” to donors about what they value, and on and on.

  2. Jay Frost says:
    March 8, 2011 at 9:46 am

    Really, it’s 100% about the donor.

  3. John Lepp says:
    March 8, 2011 at 10:20 am

    i agree with Jay. And I really think the point is, so long as the needs of your donors trump the needs of your charity – you will win. By all means offer proof or ability, or case for support – go for it. But far too often orgs think that that proof, ability or CFS though is more important than the needs of the donors, and that’s where the wheels fall off the cart.

  4. John Suart says:
    March 8, 2011 at 10:24 am

    I’m with you Tom. There’s no golden rule for this kind of thing. It depends on charity and what it’s asking for. Saying too much about the people you help can backfire. Certainly saying too much about your own charity won’t get you anything, either. It’s a balance.

  5. Steve Barnhill says:
    March 8, 2011 at 11:36 am

    I agree with Jay and John. I tell NPOs that donors are drawn to an organization by what the organization does for others, but they stay because of what the organization does for THEM (the donors). As Jay says, it’s all about donors. When I think about an NPO I support, I should properly feel good about ME. Curiously, donors are almost never mentioned in an NPO’s mission statement.

  6. Michael B. Stringer says:
    March 8, 2011 at 2:28 pm

    Really guys? I’m with Tom here. I see it as a continuum as the donor stays with the organization over the years. They start to ask more probing questions about staff/volunteer interactions, Board oversight, etc., to which we readily provide answers (on par with their giving level in the org, of course).

    Sure, there is a lot of ego involved, but with many more women writing the checks these days (and SNAGs like me), I would not say it is not all about the donor. It’s more about segmenting the DB to ensure that each person is seeing the facet that s/he appreciates most. That does not mean it’s all about the donor – that could lead to mission drift, IMHO…

  7. Fraser Green says:
    March 10, 2011 at 12:20 am

    Tom, I fully agree with you that the modern donor is more savvy and sophisticated. I believe that many donors scrutinize charities today in a way we wouldn’t have imagined a decade ago.

    Having said that, I still think the organization’s ability to stand up to that scrutiny falls within the 40. I contend that donors almost always give primarily to the cause – and that charities have to keep emphasizing the cause (to the tune of 60!) no matter how loyal, skeptical, rigorous or forensically-inclined those donors may be.

    As for differentiating more committed donors (you mentioned monthly and legacy donors) from the rest of the pack, I’m sticking to my guns here too. Here in Canada, monthly donors often don’t get anywhere near as much communications from the charities they support as single-gift donors do. I think they need constant reinforcement of the cause as the principal reason to maintain their monthly commitment. As for legacy donors, I’ve watched many focus groups of loyal donors discussing bequests. Way more often than not, the discussion really comes alive when they talk about the cause.

    To close, I want to emphasize that this isn’t an either/or issue. That’s why I suggested 60/40 in the first place.

    Thanks for my 60 seconds in the bully pulpit.

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