Future Fundraising Now

Invisible trouble in your donor file

—

by

Jeff Brooks
in

Is your fundraising program in more trouble than it seems to be?

It could be. Programs in decline often disguise their woes: as the file shrinks, average gift goes up, making up for the shrinkage.

Analytical Ones blog looks at this scary phenomenon at Unsustainable Trends, and notes that this trend of shrinking files (caused by weaker donor retention and less successful donor acquisition) is widespread across our industry.

… it’s unsustainable. We all know at some point the decreases in active donor counts will be too much for average gift sizes to mitigate.

Often, organizations in decline don’t realize it. Because when your file shrinks (because you’re not getting and keeping donors well enough), the people you lose first are your least loyal, least connected, and often lower-dollar givers.

The remaining donors are your best donors. So average gift goes way up. Commonly, gift frequency per donor improves too. Campaign results look great — creating the illusion that all is well, maybe even getting better.

Eventually, though, the house of cards collapses. The fundamental shrinkage of the file overcomes the improvements in performance.

This is why smart fundraisers look at all the file-health indicators. You’ll see the problem before it starts hitting your bottom line. And takes steps to fix it.

    Comments

    6 responses to “Invisible trouble in your donor file”

    1. Scott Huch Avatar
      Scott Huch

      Very well stated, thank you! I hope you will expand on the advice in your final paragraph in an upcoming post — specifically, “look at all the file-health indicators.” What else do you recommend watching, please? Thanks again!

    2. Scott Huch Avatar
      Scott Huch

      Very well stated, thank you! I hope you will expand on the advice in your final paragraph in an upcoming post — specifically, “look at all the file-health indicators.” What else do you recommend watching, please? Thanks again!

    3. Burnt by financial window-dressers Avatar
      Burnt by financial window-dressers

      Thanks Jeff. Have seen this happen for the past few years where I’m working – disinvestment in acquisition to make the numbers look good, failure to really involve donors in stories of success (donor journey), and a focus on squeezing more out of less. To compound the matter, someone initiated a rebrand while fee for service income has been under huge pressure. Fundraising – the real source of independent, untied funding – has been neglected to the extent that the organisation can no longer innovate, grow and prove its worth beyond performing to government specification. Superficial leadership has exacted an extraordinary toll on the organisation.

    4. Burnt by financial window-dressers Avatar
      Burnt by financial window-dressers

      Thanks Jeff. Have seen this happen for the past few years where I’m working – disinvestment in acquisition to make the numbers look good, failure to really involve donors in stories of success (donor journey), and a focus on squeezing more out of less. To compound the matter, someone initiated a rebrand while fee for service income has been under huge pressure. Fundraising – the real source of independent, untied funding – has been neglected to the extent that the organisation can no longer innovate, grow and prove its worth beyond performing to government specification. Superficial leadership has exacted an extraordinary toll on the organisation.

    5. Jack Jezreel Avatar
      Jack Jezreel

      But isn’t this a symptom of decades of middle class hemorrhaging — fewer and fewer people have disposable income to donate. The gap between rich and poor grows, the consequence of which is that we are NECESSARILY dependent on fewer and fewer very wealthy people. So, all nonprofits are working the same small constituency who can help. Sure, improved fundraising technique can always help us do our work better, but there are significant limits to “file-health indicators,” don’t you think? In other words, is this a problem with non-profits or with government and a flawed economic system?

    6. Jack Jezreel Avatar
      Jack Jezreel

      But isn’t this a symptom of decades of middle class hemorrhaging — fewer and fewer people have disposable income to donate. The gap between rich and poor grows, the consequence of which is that we are NECESSARILY dependent on fewer and fewer very wealthy people. So, all nonprofits are working the same small constituency who can help. Sure, improved fundraising technique can always help us do our work better, but there are significant limits to “file-health indicators,” don’t you think? In other words, is this a problem with non-profits or with government and a flawed economic system?

    Leave a Reply

    What this blog is about

    The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

    Blog policies

    Subscribe

    Get new posts by email:

    About the blogger

    Jeff BrooksJeff Brooks has been serving the nonprofit community for more than 35 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com. More.

    Archives

    Blogroll

    Categories

    Search the blog

    The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

    Recent Comments

    About the blogger

    Jeff Brooks has been serving the nonprofit community for more than 30 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com.