Donors vs. dollars is over: in fundraising, participation and pipeline are actually the same thing

There are two “P words” that constantly come up in fundraising work: ‘participation’ and ‘pipeline.’ Our industry sometimes comes down to two groups. Some fundraisers are focused on growing a donor base, total donor count, or in higher education, “alumni participation.” And there are of course fundraisers who say, well, that’s nice, but it’s really about big gifts, so how effectively can we build a pipeline of people who will make a transformative gift, soon?

These two viewpoints are often in opposition, and the two goals (donors vs. dollars) unfortunately fight for resources. It’s understandable. Participation in formal giving has declined, dropping by an estimated 20 million US households between 2000-2016 . And giving to alma mater has been cut in half over the past three decades, and now totals just 8 percent of US alumni. Growing a large, loyal donor base in a formal charity has never been more challenging.

So, it’s not crazy for fundraising leaders to observe: our fundraising campaign success has always been driven by a small number of very generous big givers, and we should go after big gifts. It’s quite accurate to say that if you put more money into people who connect personally with your best mega-giver prospects, you’ll raise more money.

But that’s for today. When we look at real fundraising data, short-term thinking could be disastrous. Consider these facts:

• CASE tells us that it takes an average of 19.6 months from initial gift officer contact to final booking of a principal gift of $1M+ with a donor. (P.S. the average gift officer has been in the job less than two years, anyone see a potential issue here?)
• For most organizations, three quarters of our major givers have given 6 times or more annually before they make a major gift.
• “Donor acquisition” isn’t actually a sunk cost. Sure, it’s expensive, you could lose most donors for year two, but 20 years later, your initial givers have likely donated 17-18 times their initial gift . In part, because a percentage of them become major givers.

If you’re just focused on the quick big wins, you’re not only ignoring the data, you’re treating major donors like a vending machine. And they are not. They are real people, who you are building trust with, co-writing an impact story with, and engaging.

When we asked fundraisers what one word describes their major and planned giving donors, they said things like: engaged, aware, educated. These things take time, and giving is a big part of the engagement process.

The results of the next Advancement Leaders Speak survey will be out in a few weeks, and what fundraisers want is more time engaging their biggest givers.

So, when we realize that participation and pipeline aren’t in opposition, it’s time to change some of the basic cultures of advancement work. As I said in a webinar today , we largely operate donor engagement efforts in silos. We have digital giving teams, we have giving day teams, we have annual giving, we have major gifts, we have planned giving. And they don't always talk real well.

That’s not a smart strategy, and it’s time to start breaking down silos, and instead, start operating like a symphony that works together, that provides an integrated, melodious story to donors.

Fundraising shouldn't be about operating donor outreach in silos. It should be about providing a symphony of engagement to donors. (I've heard that a symphony requires communication and integration.)

Key steps to make participation and pipeline part of your core donor engagement strategy

Here are a few immediate things we can all do to bring participation and pipeline together:

• Stop removing your major donors from communications because they are in a prospect pool, or “owned” by major gifts. No one “owns” a donor, and excluding major and planned giving prospects from communications cuts off vital engagement.
• Offer tools to gift officers to make participation part of the conversation. A great option: asking major gift prospects for a leadership gift to be a named challenge/match donor for a giving day or crowdfunding campaign. These mid-level options allow for participation and are a great trust and relationship building tool.
• Actually listen to what your identified, high-capacity donors are doing by tracking who opens, reads, watches and responds to communications. Send gift officers to talk with the donors who both seem to have capacity and are engaging. (This data is in most of your digital tools like email, video messaging, texting platforms and it needs to be collected centrally).
• Expand your definition of participation to include all the ways that donors give and engage, including events, volunteering, advocacy, and even keeping their information updated with you. For example, The Alumni Engagement Metrics revolution outlines this, and it’s exciting. Charities outside higher education should take a look at these metrics because there is a lot in here for you, as well.
• Don’t forget, that giving matters, in any amount. An ever-giver, even if it’s been a bit, or the gift is small, is different than a never-giver. If you have any never-givers in your major gift prospect pools, think critically about how they should also be engaged by annual giving. It's probably good to go chase rainbows that you actually know exist.

It's time to change the way we think about donor engagement

These are some tactical tips, but it might come down to how we actually think about advancement work. It’s time to stop creating either/or scenarios that are just not based in data. It’s time to get smarter about donor count vs. major gifts. To pull the famous quote from one of my favorite authors, F. Scott Fitzgerald , “…the test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.” ?

It’s time to do both participation and pipeline. Because donors and dollars are the same thing. And they always have been.

The data-based fundraising reality is that ‘participation’ and ‘major gifts pipeline’ are not opposed. They’re part of the same donor journey. We all need to carefully use our scarce resources. However, operating these two key fundraising goals in silos or viewing them in opposition is just plain destructive. It also makes a crappy donor experience.

They key point: Investing in participation, when done smartly and with an expansive definition, is the basis of an effective major gifts pipeline strategy. Also, major gifts can fuel the impact, community-building and transformation stories that help drive participation. These two "P"s work together, and it’s time to stop treating them as if they are in competition.

How are you managing donors vs. dollars? Have you come up with smart ways to meet these two key goals? Drop a comment here or get in touch, I’d love to hear your perspective.