Fundraising Pipeline

I was taught very early in my career that sales and fundraising is a numbers game.  The more qualified prospects you talk to, the more successful you'll be.  Bloomberg reported on two studies this week that, to me, make increasing the number of prospects going into your fundraising pipeline a top priority.

The first study, from the research group the Conference Board, says that 45 percent of corporations will reduce their philanthropy budget in 2009.  Another 19 percent have philanthropy cuts under considerations.  Support for the arts and culture led the list of causes for which cuts were expected.

Bank of America and the Center on Philanthropy originated the second study.  The 2008 Study of High Net Worth Philanthropy shows that individual giving among wealthier Americans, those with household incomes over 200K and net worth over $1 million, has decreased over the last few years.  The study monitored charitable giving for the calendar year 2007, which included the starting period of the housing decline.  They report overall charitable giving was down from '05 to '07 by 9.7%.

More importantly, for arts organizations this same study showed in 2005 that the group's annual support for the arts was $16,465 per household.  In 2007 the figure dropped to $4,792.  That's a pullback of over 70% among those most likely to make charitable donations.

Both these reports tell us clearly that you  cannot expect current donor bases to support your organization at the same level they have in the past.  The logical conclusion is that to offset those losses you'll need a larger overall pool of donors.  That's easier to say than to do, but it brings me back to my initial point, it's a numbers game. 

If you look at your development plans and it took 8 proposals to secure one funder two years ago.  Count on having to approach 15-20 to get the same funding level this year.  If your membership program went to 10,000 addresses before, it's probably going to take 20,000 this year just to stay even.  

It's hard work to find twice as many qualified prospects.  It takes more time and effort, but the alternative is most certainly further cuts to staff and programming that we all want to avoid.  I'm guessing that if you look around you'll find plenty of people in your organization that will pitch in to help fill the pipeline.

A final note, there is interesting information on why donors leave from that same report on High Wealth Philanthropy that you may find useful.  I'll share that in a future post.