Is Proportionality Limiting Your Large Gifts?
Have you ever wondered why you’re not getting larger individual donations or funder awards? It is perplexing, isn’t it?
You did your research and you knew that the donor/funder made larger gifts, but they haven’t made them to your agency! This is frustrating. You wonder, “Was it how we asked? What happened?”
IFC USA Director, Laurence Pagnoni explains all…
Generally, the reason is rooted in the principle of proportionality. When proportionality is at work, most fundraisers are not aware of it. You see, from my experience, most donors or funders usually give in proportion to your annual budget or campaign size, at no more than 10% of the goal. So, for example, if your annual organizational budget is $750,000 you can expect that the largest gifts/awards will be around $75,000. That’s the cold hard truth that’s rarely ever discussed, yet it’s an elephant in the room! There are plenty of welcome exceptions, but they’re not the norm.
In fundraising, the principle of proportionality is the understanding that a donor/funder’s giving is in proportion to the whole, a donation amount made “at the right size,” if you will.
Just last week, a major foundation funder told me privately that they would only make a $20,000 grant to one of my clients when in fact we had asked for $45,000 and really needed the full funding to hire a new staff person. When I politely inquired why they would not consider the full grant, he said it was because the small number of clients served and the overall program budget of $220,000 did not warrant it. Proportionality was at work. Further, the fact that the request was for expanded services (over and above the $220,000 budget) did not matter!
An Ancient Rule
The rule of proportionality as described here is behavior I have observed over the past 35 years of working with donor/funders. Of note, there’s also a 10% “tithing rule” adopted by many churches from the Hebrew Scriptures: “The tithes of the herd and the flock shall be determined by ceding to the Lord as sacred every tenth animal as they are counted by the herdsman’s rod.” – Leviticus 27:32. To my knowledge, there are no studies exploring the connection between the biblical guidance and my observations, yet we all know what strong effect churches have had on American culture.
Another aspect of proportionality is to consider if the donor’s expectations of what your nonprofit will deliver are in sync with the size of their gift. As you get to know donors, you develop an understanding of their motivations for giving and their expectations. According to the Council of Advancement & Support of Education, a good fundraiser will gently manage the expectations of a donor prospect during the cultivation and solicitation process, both to ensure that they are compatible with the institution’s capacity to deliver and are proportionate to the size of the proposed gift.
For example, a modest donor giving $1,000 to support scholarships cannot expect a personal dinner with the vice-chancellor and monthly meetings with the scholarship program director. However, the donor might expect an invitation to an annual scholarship awards ceremony, a written note of thanks from one of the scholars, and a yearly report on the progress of the funded scholars.
It’s important that at the point of solicitation both the fundraiser and the prospect have the same understanding of the level of stewardship appropriate to the gift. For larger gifts, written gift acceptance and recognition agreements might be appropriate. For annual fund appeals, the appeal material should state up front the level of stewardship a donor might expect.
You might also find it useful to set some internal stewardship guidelines. Start with the basic level of stewardship that donors at the entry level should expect (e.g., gift processed and receipted within five workings days, written “thank you” within seven working days, annual report via email, etc.). An agency should develop ranges of stewardship relating to different levels of giving. Naturally, these guidelines will be flexible, and many major donors will have their own ideas of how they want their relationship with your institution to develop. Having a set of guidelines will help you design appropriate stewardship strategies that you can fulfill even with limited resources.
What To Do?
Expanding your budget and/or fundraising for those big goals that seem impossible to reach is the only sure way I know to secure higher-level gifts. This is why planning is so fundamental to advanced fundraising. Planning can take the form of business plans or strategic plans or program expansion plans, but all are useful in breaking the lock that proportionality may have on your fundraising.
This blog was originally published on Lapa Fundraising.