The Donor Pyrmaid: A Big Lie & An Unfulfilled Promise

I won't repeat the content here - the authors did a great job on their own.  I recommend you check them out.  Mark Rovner at Sea Change Strategies says "the donor pyramid is a lie".  And I think he's right.  Steve McLaughlin at Blackbaud takes a different approach and calls it "an unfulfilled promise".

I think they're both right.  The reality is - a good many major gifts come from friends "nudging" friends and not from within the mass market donor pool.  These people definitely care about the charities they support, but they are also extracting personal benefits from supporting the influential friend who asked them to contribute.  It's a very real, very successful formula for major gift fundraising.  However, it also presents sustainability challenges.

Charities have managed to succeed for decades by mailing heartfelt letters and blasting them out hoping for a return.  It's the equivalent of an impersonal cold call.  Guess what?  Cold calling is dead in the corporate world.  Professional salespeople today rarely use cold calls to connect. The ROI is horrendous and it's an horrible waste of an organization's resources. Generating and following up warm leads is where time and effort is better spent. Warm leads can come from a variety of sources.  They can come to you from referrals (usually happy customers - i.e. your board members & donors), people who have come to your website, attend an event, subscribe to your newsletter, participate in advocacy, or any other opportunity you create that allows people to express their interest in your organization (or product). 

Warm leads come to you from all parts of your organization and to identify them, your organization needs to have an integrated infrastructure and strong communications across departments... and it needs to make their idenfication a priority.

When you have a warm lead, you meet with the person, you identify their interests, needs, concerns... some might say you identify their pain.  You may give them samples of your product (or service) and have them use it for months (a "pilot"), you invite them to conferences you put on, you take them to lunch; you demonstrate your ability to solve the problem that causes their pain and make them happy.  In some industries you may spend 1 - 2 years (depending on the size and scope fo the sale) before you ask for their business. 

I don't know many charities who will do that with the contacts in their database?  Does your organization have someone dedicated to visiting your donors - of all sizes?  The "data driven" people will tell you that they have ways to help you find those folks who are most capable of making larger gifts, and they can certainly help.  However, there are many people out there that won't show up using traditional data mining techniques and it's going to take more time and money than most charities are willing to spend to find and communicate with those donors.

Charities do a great job of identifying problems and helping people feel the pains of the world.  Unfortunately, they are horrible at selling their solutions to those problems.  In many charities, the entire organizational infrastructure works against doing that successfully.  Fundraising is the ugly redheaded stepchild - tossed scraps now and then, but expected to perform. It is underfunded and is often kept in a silo, separate from programs, communications and other key areas of the charity.  Until charities prioritize fundraising on an equal footing with their charitable mission, they will continue to fail at connecting with donors and making them feel like they are an important part of the solutions that the charity offers.  And they will fail at moving people up the donor pyramid. 

The donor pyramid works in theory and in those precious few organizations who implement cultivation well.  Unfortunately, the donor pyramid can't work without proper funding, infrastructure and an organization with a culture that views fundraising and donors as a priority.  Most people who talk about the donor pyramid, neglect to mention that most organizations won't be willing to prioritize their culture and infrastructure in a way that makes the donor pyramid work... and that's where we find the Big Lie.  

Comments

[Sylvie (SylvieinToronto on Twitter)]

Laurie,

Much of your post echos what I'm I have thought for some time now.

The donor pyramid is a tool, however you hit it on the nail - without the structure and commitment to fundraising and donors as a priority, it's not going to work.

To many organizations think that fundraising professionals are the answer to all their problems. We as fundraising professionals can only do our jobs well if there is a culture of fundraising that comes from the highest level of the organizations and throughout.

Thank you for sharing your thoughts.

[Pam McAllister]

In my years as a staff communications person supporting the fundraising team, I often saw the destructive effects of this silo mentality.

Almost always, program staff would plan everything out and simply hand it off to communications and fundraising to "sell" ... no matter how unattractive it might in fact be to constituents.

Hey, it doesn't work that way, folks! Especially now, people want to be genuinely engaged in what they're supporting -- part of the solution. A culture of collaboration and engagement is what's called for (even more than a "culture of fundraising," IMHO). And that's a real change, and challenge, for most organizations.

Thanks for a provocative article.

Best,
Pam