The More You Raise The Better You Raise

With the publication of the 2015 Fundraising Effectiveness Project (FEP), many of us have reflected on the continued bad news about donor retention rates and what to be done about those. I notice within the FEP report, a really interesting fact that I think we, as fundraisers, should unpack.  The more you raise, the more you raise.

This might sound tautological.  Maybe it is.  But maybe it isn’t.

The report notes:

  • Those organizations that raise less than $100,000/year actually lose money (when their donor losses are reflected): - 7.8%
  • Those organizations that raise more than $100,000 but less than $500,000 actually have a growth rate of 3.1%.
  • Those organizations that raise more than $500,000 are the most efficient fundraisers. Their growth rate is 10.4%.

The finding is not surprising.  You would expect those organizations that raise more money to be more effective fundraisers (hence, they raise more money). The interesting question, of course, is why.

  • Is it that you become more efficient as you raise more money?
  • Or that if you are more efficient you raise more money?
  • Is it that if your organization is larger, has a larger budget (from raising more money in the past, perhaps) that you are likely to have more resources with which to raise more money in the present (like a development director)?
  • Is it that if you’ve raise more money in the past (and therefore have a larger fundraising budget) that there is learning that results in higher fundraising effectiveness rates?
  • Is it simply a matter of economies of scale?

And, for those new organizations out there, the start-ups trying to raise their first $100,000, the report’s findings and implications are especially discouraging. They’re not even running in place. They’re losing ground by trying. Again, there are some important questions there to be explored such as:

  • Is that because smaller organizations aren’t aware of and aren’t following best practices?
  • How can they overcome the negative growth rate?
  • Could collaborative fundraising efforts assist them in getting off the ground?
  • Is there a role for nonprofit incubators (or others to assist)?

The Fundraising Effectiveness Project makes important contributions each year to our understandings of our profession. I love to see its release each year. But even as it takes us forward and gives us new insight, it also raises important new questions, areas for us to explore to further understand to help us become better practitioners. 

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