How to tank your midlevel program in three easy moves
Here we go again.
A national crisis and a fork in the road for nonprofit leaders. This century we’ve seen 9/11, the 2008 economic meltdown, COVID, and now the present moment…
In each case, nonprofits faced big strategic and tactical decisions that had long-term financial implications. In each crisis, many nonprofits made poor choices that led to long-term struggles.
One of those wrong turns involved penny-wise and pound-foolish fundraising investment decisions.
Focusing on the critical tier of midlevel donors, let’s look at three decisions on the table that your organization may regret for years.
- Slashing acquisition investments. I direct you to Roger Craver’s brilliant Agitator piece entitled “Don’t Eat the Seed Corn.”
He writes:
“Now more than ever, organizations must resist the short-sighted urge to slash investments in donor acquisition and retention. Because the small donors you bring in and cultivate today? They’re the ones who’ll keep your mission alive tomorrow.”
Acquisition is expensive, and the ROI accrues over years. Conversely, the decision to slash this investment sends the pain cascading into the future. It takes years, sometimes a decade or longer, for a small-dollar donor to enter the midlevel, and more years still to become a major giver.
Cutting this investment is like planting a time bomb in your organization’s finances. And sadly, when it goes off, fundraisers are often left to shoulder the blame.
2. Cutting back retention expenses. Creating donor happiness is one key to midlevel success, but it befuddles CFOs. It’s all but impossible to directly tie each cultivation touch, phone call, event invite, or impact report to a donor’s decision to renew or increase their giving. That makes cultivation and stewardship investments easy targets during spasms of belt-tightening. Cutting these expenses is just another form of kicking the can – and the pain – down the road.
3. Expecting social media to do the fundraising heavy lifting. Definitely not for midlevel and probably not for low-dollar either. Midlevel donors have little interest in social networks for engaging with the causes they support. According to our landmark study of nearly 6,000 midlevel donors, only 16% say they want to do this. Bigger picture, there are signs that the fantasy that social media is the answer may be fading. The Chronicle of Philanthropy recently covered this well. Here’s the tl;dr:
“For years, social media has been a place for organizations, like nonprofits, to connect with their audiences, share their work, and build visibility. But lately, many nonprofits have been questioning whether these platforms truly nurture the kind of community we want to cultivate — or if they simply keep us in a loop of endless content creation, asking more and more of us while giving less in return.”
One driving factor in short-sighted decision-making may lie with CFOs and Boards, who in our experience are woefully uninformed about how fundraising works. Until they get savvier, history is bound to repeat itself.
It’s frustrating to see smart people do the wrong thing again and again. Maybe this time will be different.