A common household tool can help nonprofits gain an appreciation for a familiar fundraising template.
According to the website “Haus of Tools,” (yes, an actual website; thank you, internet!), the first hammer was created 3 million years ago when our prehistoric ancestors held rocks in their hands and slammed those rocks into other stones to create flint for starting fires and weapons for hunting. Around the year 30,000 B.C., a sore-handed someone decided to tie a bone or strong stick to the rock, creating the first hammer with a handle.
Not many tools that are 3 million years old are still used today, and yet the hammer can be taken for granted. The same fate can befall fundraising. While modern technology can map the route to our donor meeting and even write the first draft of our grant proposal, familiar fundraising tools can fall out of favor.
For example: the donor pyramid. The trustworthy triangle reportedly is obsolete, but to paraphrase Dickens, reports of the donor pyramid’s demise are greatly exaggerated.
The donor pyramid is one tool among many and is not the end but the beginning, an initial outline of a nonprofit’s eventual fundraising plan. The top of the pyramid illustrates 60 percent of the nonprofit’s charitable gifts being made by 10 percent of donors. The pyramid’s mid-section depicts another 20 percent of donations from 20 percent of contributors. The base of the pyramid contains 30 percent of charitable contributions from 70 percent of donors.
The donor pyramid is nothing more than a starting point. The percentages are neither automatic nor guaranteed. The math involved is not a magic formula. One size does not fit all. As familiar legal disclaimers proclaim at the end of commercials, your results may vary. In fact, your results will vary as you apply information from your donor database and prospect list to the template.
Your customized creation then informs a gift range chart indicating how many gifts you are developing at specific monetary amounts. The higher levels of the gift range chart names names, linking specific donors and funders to specific staff, board or other volunteers who now are assigned to develop their respective donations. The first draft of a comprehensive fundraising plan is now in sight.
The initial donor pyramid provides assurance that you do not necessarily need to rely solely on large gifts. Your annual fund or campaign can be successful with a wide range of donations from a wide range of donors. You need not focus exclusively on wealthier individuals.
This mindset strengthens diversity, equity, inclusion, and belonging when fundraising. The pyramid proclaims that all donors – regardless of economic, racial, or other demographics – are important, and all gifts – regardless of their amount – are important.
The triangle charts an initial pathway toward a comprehensive fundraising plan. Fundraisers, obviously, still must cultivate and steward relationships with donors while ethically and transparently stating a transformational fundraising case for support.
Meanwhile, just as the handle was added to the hammer, The Fund Raising School is researching if the donor pyramid’s original ratios still apply. The findings of that research will update the template. In the meantime, the donor pyramid remains a basic tool for effective fundraising.
Bill Stanczykiewicz, Ed.D., serves as director and Rosso Fellow of The Fund Raising School within the Indiana University Lilly Family School of Philanthropy.
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