How can you reduce dependence on major donors?

Here are a few strategies that comes to mind; -Develop Sustainable Income-Generating Activities: NGOs can create income-generating activities that align with their mission. For example, they can offer training programs or workshops and charge a fee for participation. This way, they can generate their own revenue to fund their projects. - Empower Local Communities: NGOs can focus on empowering local communities to take charge of their own development. This can involve implementing projects that promote self-sufficiency, such as vocational training programs, micro finance initiatives, or community-led projects that address local challenges.

I suggest refocusing your efforts on a complex, diversified revenue plan. Go make money by pursuing several earned and contributed revenue streams. Exude a mindset of prosperity and remove the feelings of reliance on donors and funders of all kinds. Demonstrate your uniqueness within your niche through program results. Promote your relevancy through white papers, presentations, and advocacy work. Ultimately replicate your model program that solves the problem that your NPO set out to solve. Instead of following your major donors; give them reasons to follow you.

An example, for donors motivated by a passion for a particular cause, you can create a journey that includes regular updates on the impact of their contributions to that cause, invitations to participate in related events or volunteer opportunities, and personalized thank-you messages highlighting their role in driving change. On the other hand, for donors who are more interested in networking and social engagement, you can design a journey that focuses on exclusive donor events, opportunities to connect with like-minded individuals, and tailored updates on the organization's social activities.

To reduce reliance on large donors, it is crucial to explore alternative funding avenues such as grants, partnerships, and individual donations. Maintaining transparency about your organization's objectives and finances is essential to establish trust with potential supporters. Furthermore, demonstrating the impact of your work and seeking feedback can help attract a broader range of supporters. Providing regular updates on specific projects, sharing how goals are achieved, and exceeding them can help build trust and credibility with supporters. It is also vital to collaborate with qualified providers and the community. Gain approval and demonstrate how funds are used. Provide actual figures when you are successful.

Reach many more people with an example of what makes you distinctive--free, online. This gives you a much bigger pool at the top of your funnel. For example, at a Catholic non-profit serving the poor, we offered a free coloring book about a saint who exemplified our work. We added over 3000 new names with email addresses and mailing addresses--and 4 months later one of the responders donated $150,000 (I'm not kidding!). Another: at a Benedictine College we offered for only the cost of postage a copy of the Rule of Saint Benedict--online, simple link to order and the thousands who responded became a new pool to cultivate. Key: make the responders pay at least a little bit to cut out those looking for nothing but freebies.

Rather than reduce dependency, why not improve the cost income ration of time spent on Major Donors solicitation by extending the time horizon on return to also include legacy gifts? Blended giving asks in the US and a better understanding of the disproportionate impact of gifts over ￡100k here in the UK have seen a renewed focus on Major Donors as a potential source of legacy gifts. Although there are may challeneges, Dr Russell James' (Texas Tec) work has demonstrated the potential uplift in subsequent lifetime gifts (up to 75%) if a planned gift/legacy can be secured. So, it can be 'jam today' and tomorrow if we can get the approach and stewardship right.

It is quite demanding in the present time to have a long horizoned perspectives and approaches towards development. From my past experience there were multiple innovative development interventions ideas but those had been aborted due to political will and the elongated dependence of NGOs on aid. Now an entrepreneurship mind set has to be cultivated both on the implementing organ and what we call beneficiaries. A profit oriented, action oriented proposals need to be encouraged, instead of making community members aid recipients rather use the findings as a seed money and they venture on creative problem solving interventions. .

Data from Giving USA tells us that the vast majority of philanthropic resources come from individuals, much to the surprise of most. If your revenue mix is largely from foundations, corporations or a special event, you're missing out on the greatest piece of the philanthropic pie. The challenge: managing relationships with individual donors takes time and resources. Most organizations are underleveraged in their capacity to execute a robust individual donor development strategy.

In order to not rely too heavily on major gifts, it’s important to have funds coming in from a wide range of sources at any given time. One of the most effective ways for organizations looking to supplement existing revenue streams involves taking a proactive approach to matching gifts. Already, your team likely qualifies for a significant amount of match funding that’s being left on the table due to unrequested gifts. By informing your nonprofit audience about the opportunity, you can drive more matches to completion as individual donors of any level are able to stretch their contributions even further for your cause.

Nonprofits can also generate income from social enterprises by leveraging their mission and expertise to create and run business ventures that address social or environmental issues while generating revenue. Uplift Northwest is a Seattle non-profit temporary staffing organization that utilizes a social enterprise model by providing hundreds of workers to various commercial and residential employers in the Puget Sound Region. For over 100 years, ULNW has been serving the community by providing job training, dignified work opportunities, and support services to men and women experiencing poverty and homelessness.

Another suggestion is to invest time and effort in managing existing donor funded projects very well so that the donors are pleased with how 'their' funds are being utilized. When donors are happy with your performance, they won't hesitate to entrust you with additional resources if an opportunity for a follow-on project arises. That, in my experience is one of the best ways to retain a donor.

Ask for more. When donors give more, they are literally "more bought-in". Once they give at a level that matters to them, they will start using language like "we" when talking about your mission. I tell my clients "We're not coming for their money, we're coming for their whole life!" Ask for more and then engage them as a whole human being. You'll have partners for life.

Another suggestion to enhance donor retention and increase lifetime value is implementing a comprehensive donor stewardship program. This program can include regular check-ins, exclusive updates, and events specifically tailored to your loyal donors. Additionally, you can consider offering them special privileges, like early access to events or behind-the-scenes experiences related to your organization's work. By making your existing donors feel valued partners in your mission, you can strengthen their commitment and encourage continued support.

You cannot land the big fish if you don't feed the little fish. Donor retention and development is a key component of successful fundraising. It is not enough to have a relationship, you must maintain it, grow it, and connect satisfied donors to potential new donors who don't yet know they want to support your endeavors.

Retention is easier and more cost-effective than acquisition! So, offer options like monthly giving or matching gifts to increase lifetime value. Encourage donors to champion your cause and refer new contributors. By nurturing existing relationships, tailoring engagement, and demonstrating impact, you can secure ongoing support.

Another suggestion to strengthen your case for support is to leverage storytelling as a powerful tool. Share compelling narratives that illustrate the real-life impact of your organization's work. Highlight stories of individuals or communities whose lives have been positively transformed by your initiatives. Personalize these stories to resonate with your donors, showcasing the tangible difference their contributions make. Additionally, consider using multimedia formats such as videos, testimonials, or interactive presentations to engage donors emotionally and visually in your cause, making your value proposition even more impactful and relatable.

Some VERY BASIC examples to consider in strengthening case for support on 'project case by case'. 1. Baseline survey-Proof of needs. 2. Clear proposal, workplan & budget. 3. Inclusivity: Partner with local actor(s) such as government, LNGO & Institutions (Educational, Training, Youth...). As well as the minority (Women,...). 4. Timely & quality reporting. Clearly highlight outcomes against approved plans/ proposal. Justify deviations and refund unspent funds. 5. Capacity to manage risk (external/ internal). Show case risk appetite (Identify, Mitigate and Reporting tools) and estimated value. 6. Justify organizational structure. Capacity to deliver. 7. Provide governance documents, annual management & audit reports. 8. VISIBILITY=Proof!

Resist the urge in a case for support to tell an extensive history of your organization. A case for support should be mostly forward-looking, inspiring the donor to be part of the solution to an existing problem.

There are a ton of ways for an organization to secure revenue needed to sustain its operations. For example, corporate matching gifts provide a type of income that can even out your funding sources and reduce dependency on any one channel. It’s also a type of engagement that can be easily automated to identify opportunities using innovative fundraising technology. The automation of such a strategy allows nonprofit teams to raise more through matching gifts without having to devote additional time and effort to doing so!

I also believe in running a lean team. This is not just with your development team but also managing up and explaining your case to the ED and Ops the reason for keeping costs down. Of course everyone wants to expand their ability to fulfill their mission, but you also have to keep a pragmatic approach on what is actually a "want" versus a "need."

It is very easy to picture programme beneficiaries as passive and waiting for handouts. On the contrary, they could be potential allies in sustainable fund raising. For example, targeted beneficiaries who graduate from NGO support (through successful programming and exit strategy) could constitute potential sources of funding in the future. They could make contributions or help find those who can.

Donors contribute to organizations that align with their views. If you're doing good and ethical things, the money will folllow. Conversely.......

Storytelling that conveys impact is a must in this case! Donors need to know they are valued and that they make a difference. Fundraising is about relationships as much as money, and it should be a win-win: donors fulfill a desire to support a cause they care about, and your mission satisfies that desire. Meeting donors where they are in terms of donations vehicles (mail, email, social media) is one thing, but if they think you only see dollar signs when you look at them, they’ll be quick to move on.

Collaborations can take various forms, such as co-hosting events, co-funding projects, or running joint campaigns. By pooling resources, you can expand your donor reach and tap into new networks. This approach not only diversifies your fundraising channels but also enhances your credibility and reputation as donors see you actively working with like-minded organizations to achieve common goals.

An example, which I think demonstrates good collaboration with other non-profits is when you establish well though-out "value adding consortiums" and develop project concepts that can be pitched to donors. When funders see a great collaborative idea, they are willing to fund it even without soliciting more applications from other competitors.

Collaborating with like-minded nonprofits not only multiplies impact but also amplifies the WORD OF MOUTH. Just as these organizations share and support each other's stories, you can benefit by joining forces to spread their message and gain support.

Instead of asking how to become less dependent on Major Donors, CEOs should ask whether or not their fundraising teams have the skillset to lead donors to their best gifts. I find that too many fundraisers don't know how to have investment-level conversations, let alone solicit major donors outside of a written proposal. Before you consider diversifying away from major donors, make sure you're securing their best gift annually. If you're not, there's work to be done. I find there's often 7-figures left on the table based upon the fact that the team hasn't had proper skills training.

Matching gift programs have the potential to turn mid-level donations into major gifts—broadening your network of prospective major donors. Consider this: Your nonprofit strives to collect 10+ $50,000 gifts each year. Now, let’s say your team is having a difficult time sourcing a few of those major gifts. Looking into the match-eligible gifts at a lower tier (which are generally more readily available) can help make up for the missed revenue! For example, let’s say a donor contributes $25,000, which is doubled by Disney Corporation?—allowing it to reach the “major donor” threshold. At the same time, a Soros Fund Management employee might make a $20,000 gift that is tripled by their company?—bringing the total gift value even higher.

Relying on a small handful of major donors is not a good idea. It’s risky, for sure. But doubling, tripling, or quadrupling down on finding more major donors isn’t risky at all. Plus, according to the Fundraising Report Card, major donors retain at twice the rate of low dollar donors. That makes them less expensive to retain. Meanwhile, they’re much less expensive to acquire too. So, before you put on your entrepreneur hat and start working hard on new (costly) ways to generate more diversified revenue, seriously consider expanding your major donor base instead. Diversity your major donor cohort. It’s easier and less expensive.

Strengthen your financial management. Diversifying usually means more donors or income streams to manage. Without adequate financial management and reporting you might jeopardize donor retention.

I have been a major gift fundraising exec for 25 + years, globally. Fundraising is an art, not a science. Every organization must be viewed strategically through a it’s own lens . Some NGO’s rely on mega donors only and will never need an acquisition of lower entry donors . However, in every single instance, a keen experienced eye must review donor records to determine patterns on all levels. A small donor to a university foundation may be the university’s next legacy gift. For small to midsize enterprises, the diversified marketing method is best - relationship and digital - always seeking donor loyalty, as well as advanced gifting. It’s not rocket science, but it is the experience of your fund development officer that will matter.