Not for profit fundraising: the Obama lesson

Its a very tough time for not-for-profits here in St. Louis and everywhere. Due to the uncertaintly of the economy and stocks at their lowest rates in decades, companies and wealthy individuals have pulled back on their support of the organizations that do the most for thier communities. That is not a good thing. These groups do good work for people in need and the betterment of society. They tend to work with slim budgets and have many people working for much less than they could earn in a for-profit entity. So budget cuts mean staffing cuts, and program and services cuts.

In my experience, most development executives at these not-for-profits focus most of thier time on those individuals and organizations the give the most. Remember that 80/20 rule? Well in these uncertain times, it may make sense to reverse those figures for the next twelve months of so. Go after the 80% that historically gives 20%. Its time to try to get a small amount from many vs much from few.

Look at what Obama accomplished in his run for President. It was the most successful fundraising campaign in history. And the kicker is that a huge percentage (I don't recall the exact percent) was from donations of less than $1,000 and many of those at less that $100. He accomplished much of this by using internet strategies focused on social networking and providing tools and guidance to many organizers spread throughout the country.

I think it boils down to this. Someone that my have give an annual check for $25,000 that has their assets tied up in investments can probably only give a fraction of that until the market and economy recovers. However, someone that gave nothing or maybe $25 as part of their annual membership fee, may very likely give another $25 if they were told how much it was needed and asked. If your own budget is tight and a relative or friend asked you to give them $5,000 you would likely say no. But if you knew they really needed it and they asked you if you could give $50 you probably would. There is much less sacrifice there and you feel good about helping out.

I'm not saying to give up on the big doners but am saying that with today's communication technology it is feasible to reach thousands very easy. Those that embrace this philosophy and make a concerted effort to set up programs to reach new members and small donors will find a new revenue stream that helps them get buy in tough times and really thrive when the economy recovers and those big donations start coming in again.

Check out the feature story in this months issue of Fast Company and learn how Chris Hughes, co-founder of Facebook helped Obama do it.