Cultivating Donors for the Long-Term

Some advice on whether to focus more dollars on your donors, the life-blood of every organization.

by Misha Galperin

One needs to have a long-term view. There are short-term problems and issues to be overcome always, and there is the immediacy of the moment and the pressure to give out money right away. But if you’re running an organization that you think is here for the long haul – and we’ve been here for the long haul and we expect to be here for a long time – you need to be thinking beyond the horizon of the next year or the next five years.

In purely business terms, there are three considerations that argue in favor of building your donor base, even if you don’t have an immediate financial return on investment. One part of what is happening in the world is much of the wealth transfer from generation to generation, and certainly studies show that a very significant percentage of planned gifts and bequests, etc., come from people who are small givers over a long period of time. So even though they are small givers, they will pay off in the end in terms of their contributions, so it pays to have more people from among whom big gifts can come in the form of planned gifts.

Number two, we’ve actually done some studies and we’ve looked to see how long it takes and whether you can predict smaller givers becoming larger givers, and we see that on average actually, more than 50 percent of the people who recently became our major donors went from an initial gift of $235 or less to gifts over $10,000 in the space of 15 years. So you can actually see the curve, and you can see how that happens. And so I think that that pays.

Three, these days, and it’s an often repeated reference, but the whole sort of Obama experience shows that you can actually do quite well by raising a significant number of gifts in smaller amounts. And in this economic environment in particular, a lot more people seem more willing to give even though the average giving is down on a per-person basis. So I think all of these considerations are important.

Misha Galperin, is executive vice president and CEO of the Jewish Federation of Greater Washington.