10/04/2024 | News release | Distributed by Public on 10/04/2024 14:49
For many years, the overarching narrative for annual giving in higher education fundraising has been the same: We're getting bigger gifts from fewer donors.
I hear myself repeating something similar when I host an annual webinar on emerging data trends for higher ed annual giving programs. With my co-host, Brian Kish, we pour over data from Blackbaud's donorCentrics® and Fundraiser Performance Management™. And it seems that no matter what we do, there are fewer donors year over year. This monotonous narrative is causing fundraisers to be uninspired (a little dejected, even) which is not serving our programs.
This year, we felt it was important for us to start a conversation with fundraisers-especially annual giving professionals-about how we tell our annual giving story to stakeholders, and in particular to our bosses. Here's what we suggest: We need to start rethinking annual giving metrics to create a new storyline about fundraising for higher education.
If the specific data is only subtly different year-over-year, maybe that's not the full story. Maybe the story lies in how we measure success, how we improve the health of our annual giving programs. Maybe we need to focus our attention on narrower metrics. This will show better results in our current reporting and it will drive healthier results as we move forward.
This isn't about making ourselves (and our bosses) feel better by weaving a rosier account than the numbers support. This is about looking at the numbers in a new way. It's about reshaping the redundant tale of "fewer donors" into a compelling account of how a scrappy higher ed annual giving team can turn the tide on status quo fundraising.
Instead of assuming that lower donor counts are always bad, let's consider a different possibility: Higher donor counts in years past might have been historically padded with "fluff" donors who might be artificially inflating donor counts. Here are two explanations.
If we allow for the hypothesis that donor counts of yore were inflated because we were chasing quantity, it begs us to consider the "quality" of donors. What makes a quality donor and how do we measure it? As a starting point, it would be ideal to know which donors consider our organization one of their top philanthropic priorities.
And then there is capacity. Since donors have different capacities, it is challenging to consider gift threshold as a measure. For example, there might be a donor making a $25 gift that is their largest gift that year. Conversely, there might be a $10K donor for whom $1K is a small gift relative to their other philanthropy.
Even so, gift thresholds can serve as a good gauge for donors who might move up the pipeline. Data from the Fundraiser Performance Management community suggests that the median amount of an annual gift is $100. This means half of annual gifts are lower than that and half are higher. If we focus on donors at $100 and above, we are focusing on those most likely to retain and those most likely to move up the pipeline: 23% of small donors ($101-$500) are retained compared to only 10% of micro-donors ($1-$100) and, according to the Fundraising Effectiveness Survey for the first quarter of 2024, retention increases as gift size increases.
*Source of all charts: 2023 donorCentrics Annual Report on Higher Education Alumni Giving
Which leads us back to using the very data trends we have been struggling against to tell a different (more useful) annual giving story. We recommend you begin using new metrics to report on donors assuming we're in agreement on the following two points:
Agreed? Good! We especially recommend that you report on metrics that give more focus to quality donors, concentrating on the following data points:
As you begin to emphasize "atypical" annual giving data points, is there still value in reporting on the classics? Absolutely: Tried-and-true data helps you provide a more balanced narrative, so keep standard metrics in mind, too:
This approach isn't just about the metrics. It is about how we use the metrics to tell the annual giving story. Vice presidents of advancement may not appreciate the nuance and value of annual giving. They might not perceive the story hidden in the data-a truly heroic tale of supporters who give what they can in service to your school. They might only notice that overall donor counts are down. And that will cause angst.
If you as an AG professional start to highlight the donor count of quality donors giving $100 and more, it will likely calm their angst (and yours), and you'll begin rewriting the annual giving storyline with a better, brighter ending.