You’ve probably heard it before, but it bears repeating:  83 percent of all non-governmental dollars raised in the nonprofit sector come from individuals.  Foundations and corporations do not provide the majority of support for the work of the social sector, individual donors do.

Each year, the Giving USA Foundation publishes it’s excellent analysis of charitable giving to nonprofits by corporations, foundations, individuals and estates.  For years now, the percent of dollars raised from individuals plus the percent of dollars raised from estates (which were, of course, accumulated by individuals) has hovered between 82 and 83 percent.

Here are the figures for 2009 :

Source: Giving USA 2010

In spite of these numbers, many nonprofits continue to generate 60 to 90 percent of their revenue from government, foundation and corporate support.  This is especially true of small and mid-size nonprofits, defined here as organizations with budgets of less than $10 million.

The current economic crisis has resulted in deep cuts in government funding.  Giving USA 2010  reports that foundation grantmaking fell by 8.9% in 2010.  Corporate giving rose by 5.5% while individual giving remained flat.

Nonetheless, many of my nonprofit clients continue to focus the majority of their fundraising time and budget on securing foundation and government support.

With a new fiscal year starting, I have a modest proposal.  Let’s focus most of our fundraising attention on increasing and sustaining our individual donor bases.  Don’t give up your efforts to pursue government and foundation funding, but move individual donor work to the front burner. 

The research continues to “show us the money.”  Nonprofits that want to sustain their work and survive the economic downturn need to pay attention to this research and craft revenue plans that prioritize developing strong individual donor systems and strategies.  Make sure your fundraising plans include strategies for each of the stages of individual donor development:

Whatever you do, don’t skip the first and critical step: planning.  Nonprofits with limited development staff often put individual donor work last because this work seems to come with few externally imposed deadlines and requirements.   There are no  proposal or reporting deadlines.  But there are deadlines that need to be set internally:

  • When will you send a direct mail piece? 
  • When will you send an e-mail solicitation? 
  • When will you write each of these pieces? 
  • When will you send donors an update of the impact their contributions are making? 

If you put each of these deadlines on your work-plan, you will begin to see the need to plan time for individual donor work instead of rushing to write that solicitation at the eleventh hour.

In drafting your annual work-plan, put aside staff  time regularly — once a week, twice a month — to gather names of prospective donors and conduct research into the giving habits and interest of existing donors. 

Schedule time to plan for your next moves with different segments of your donor base.  For example, how will you keep in contact with new supporters who attended an event?  When will you ask them for a gift beyond the price of attending the event?  If you have a group of donors who have been giving larger gifts via your direct mail campaign(s), research their potential for major giving and create strategies to cultivate and then ask them for a major gift.

See this earlier post  for more about development planning.

And come back and visit over the next few weeks as I’ll be posting pieces regarding research, cultivation, and stewardship of individual donors and a piece on staffing your individual donor program.

Does your nonprofit put individual donors first?  Please share how you do below.

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