3. Why the emphasis on major gifts?
The economics of fundraising has changed significantly over the last two decades. In the 1980s, an organization could expect to receive 80 percent of its net income from the top 20 percent of its donors. This was the old “80/20 Rule.”
Not only are SCA’s multi-media packages producing many new $1,000 gifts from donors who had never before given more than $50 or $100, but they have produced scores of $10,000, $100,000 and even $1,000,000 gifts.
Today, this “80/20 Rule” has become more like the “95/5 Rule.” That is, a correctly-run fundraising program can expect to generate about 95 percent of its net income from the top five percent of its donors.
This is happening is large part because of the rising cost of traditional low-dollar direct mail fundraising, which is making low-end donors less economically viable. The traditional low-end direct mail donor is a vanishing resource.
The good news is: an organization doesn’t need many new $1,000, $10,000 and $100,000 givers to make up for all those disappearing $5, $10 and $20 givers. We have found that focusing on the top end of a donor file with SCA’s multi-media major gift mail program is actually generating exponentially more net revenue for many of our clients.