How to Lose Your Major Donors

Let’s pretend for a moment that you are the proud owner of five franchise fast-food restaurants around town. All five of your restaurants — let’s call them Uncle Jeff’s Greaseburgers — faithfully follow the famous Uncle Jeff’s formula. The menu, marketing and décor are exactly the same.

For reasons you haven’t yet figured out, Uncle Jeff’s No. 3 generates twice the revenue of any of the others. Month in and month out, restaurant No. 3 is pouring revenue onto your bottom line.

What does a smart franchisee do? One thing I’m sure you won’t do is make big changes to Uncle Jeff’s No. 3. It’s the one where the formula works best.

If you have the mind-set of many nonprofit fundraisers, however, changing Uncle Jeff’s Greaseburgers No. 3 would be your top priority. You’d hurry down to the restaurant, remodel it, take down the signs, create a more expensive menu and convert the parking lot into a sculpture garden.

Crazy? Yes. But that’s what a lot of fundraisers do: They hand-pick the donors who are most responsive to their fundraising programs — and put them in a radically different program. And it’s probably costing them significant revenue.

Why do they do it? It’s usually because they have very strong ideas about what major donors are like. They believe these donors are smarter than the others, more sophisticated and deserving of more respect.

Here’s what the communication program for these cherished donors tends to look like:

* Fewer impacts — sometimes dramatically fewer, on the belief that these donors shouldn’t be “bothered.”

* More “businesslike” style — closed-face envelopes, fancy stationery design, fewer images, less color. This is thought to be more appealing to these donors.

* Softer fundraising style — toned-down urgency, less emotion, more facts. It’s meant to be a better match for these left-brained and businesslike donors.

All this is deemed by many fundraisers to be more effective than the hyped-up, urgent style of typical fundraising. They might be correct. Or not.

The problem is, you don’t know. Putting any upgraded donor into a different fundraising program amounts to a risky and high-stakes crapshoot.

Ask yourself: How did these higher-end donors rise to that level? They responded to your regular fundraising program. That stuff worked for them. So you know one thing about them for sure: Your normal material motivates them to give. Any change in communication style is a switch away from something that works. Why would you do that?

Now, I’m not saying the style of fundraising I’ve described above is a big loser. It’s not — except the part about communicating less; that’s a nearly guaranteed revenue-buster. But you can raise a ton of revenue by properly applying a high-touch approach. Problems only arise when you uncritically make a wholesale change to the way you reach your best donors.

Because fundamentally, where it matters most, your best donors put their pants on one leg at a time like everyone else. What works, works.

There are a number of ways these major donors are meaningfully different from others. And paying attention to these differences gives you the opportunity to use different strategies to increase involvement and revenue from them. Here are some key ways they’re different:

* They give more money. Duh. But this fact should inform what you ask them for. Are you asking folks who routinely write you checks for $500 to give you $20? If you are, you’re not only leaving money on the table, you’re saying loud and clear, “We don’t really know you!” If you are basing your ask amounts on donors’ giving, are you making sure what you ask for makes sense? Suppose you’re raising funds for vaccinations that cost 22 cents each. A $20 gift provides a robust 91 vaccinations. Nice. A $500 gift covers more than 2,000 — a number that’s hard to visualize. Maybe you should change the scale: $500 is enough to vaccinate an entire village.

* They tend to give less frequently. While typical donors average between two and three gifts a year, major donors are usually in the one- to two-gifts-per-year range. This doesn’t mean go silent on them, but it might tell you to communicate with them occasionally in ways other than asking for money.

* Their giving is more seasonal, concentrated toward the end of the year. You don’t have to space your communications equally throughout the year. Ask them more often in the fourth quarter and less in other quarters.

* They are a more valuable asset to your organization. It helps to approach them with investment thinking. The dollars you spend on them can trigger a much better return. Something as simple as First Class postage can be a good investment with these donors. If nothing else, the delivery rate of First Class mail (approaching 100 percent) sure beats that of bulk postage, which, by some estimates, has a loss rate as high as 20 percent. And by all means, you can afford to affirm, thank, praise and report back to your major donors more often and in more personal ways.

Given those facts, your ideal fundraising program for your major donors probably looks a lot like your regular program, with these differences:

* They get one, maybe two high-end, businesslike appeals a year.

* You spend a little more on postage.

* They get more personal touches, like thank-you phone calls or handwritten cards, birthday cards, special reports on your work, invitations to see your work firsthand, and other appreciative touches.

But don’t take my word for it. I’ve described a typical program for most donor files. Yours could be different. Test everything you do. Know for sure whether the changes you make help or hurt.

When you’ve discovered the right treatment for your major donors, you can turn your attention to your lowest-performing Uncle Jeff’s Greaseburgers. That’s the one where the formula doesn’t work. That’s where you need to make the big changes! FS