Reprise: A Sweet Spot

12 Sep Reprise: A Sweet Spot

12 September 2023

By David Allen, Development for Conservation

Perfect weather. Great food. The largest gathering of land trust staff and Board directors ever. How was your Rally?

I always recommend measuring conference experiences by finding one idea that you can bring back and make a difference right away. If yours was related to fundraising, communications, marketing, or donor development, I’d be interested in what you learned.

The following is another reprise, originally published in September of 2017. As always, your comments are warmly welcomed:

Quick Question: How would you go about doubling your operating revenue in the next five years or so?

In a recent Learning Center thread, a writer asked for information about membership numbers and growth rates. She explained that she was “not wanting to promise wildly inaccurate numbers, and also what type of growth rate to realistically aim for.” Several people, including me, responded with experience and ideas – all of which were helpful for the question she asked. But was she asking the right question?

I was reminded of the story of a person climbing a ladder. S/he was trying to figure out how to climb faster and more efficiently without falling off – probably not wanting to promise wildly inaccurate ascension rates. But the better first advice might be to make sure the ladder is leaning on the right wall.

So why are we concerned with how many members we have? Or the growth rate? Is our ladder leaning on the right wall?

Clearly, if you are starting with none to very few, these metrics are important, but let’s say you already have 200-300 members – which describes many, many land trust organizations.

If you are looking to the number of members as a measure of community engagement or political support, I’m with you. And there are lots of methods of “counting” members that can serve to puff up that reality, such as counting individual adults instead of households or using a 15- or even 18- month count instead of 12.

But if your particular “wall” relates to increasing operating revenue – and most of ours do – membership numbers and growth rates might not be the best metrics.

Because “average gift” is missing.

So, go back to the opening question: How would you go about doubling your operating revenue in the next five years or so? You can – and should, of course – work on increasing the number of people giving money. But you could double your operating revenue by doubling your membership, by doubling your average gift, or by some combination of both.

Where is the Sweet Spot?

As an example, let’s take an organization that has 300 members. Typically, there would be 10-15% – say 45 – who are giving more than half of the total. This is a variation of the Pareto principle, where 20% give 80%.

If I was interested in doubling my operating revenue in the next five years, this is the group I would look to first – the 15% who are already giving the most.

This group makes up a Sweet Spot.

Can you motivate your $250 and $500 members to give $1,000? Can you motivate your $1,000 members to give $1,200 ($100/month) or even $2,500 to $5,000?

$10,000?

Every individual success you have in this area is a huge win for the operating budget. But more importantly, it moves the bar for everyone else. If I’m giving $100 now and the top end givers are giving $500, I feel pretty good. If the top givers are giving $10,000, maybe I take a second look at $250, or even $500.

This is why donor circles work. This is why getting on the phone and out the door is much more effective than sending out more mail. You can’t meet individually with every member of course, but you can meet with the top 15-20%. And success here will affect the entire membership.

In fact, focusing your fundraising attention on this group, even at the expense of recruiting new $35 members or increasing your growth rate will move the operating budget needle further faster than anything else you could do.

That is, of course, if the objective is to raise more money.

Cheers, and have a great week!

-da

PS: OK, so for all of you non-sports fans, the “sweet spot” is the point along the barrel of a baseball bat where the same swing will send the ball the farthest out into the field.

PSS: Your comments on these posts are welcomed and warmly requested. If you have not posted a comment before, or if you are using a new email address, please know that there may be a delay in seeing your posted comment. That’s my SPAM defense at work. I approve all comments as soon as I am able during the day.

Photo by Wunderphotos1951 courtesy pixabay