MBAX 6850 Week 6 Individual Giving Fundraising Plan Example

From $0.8 Million to $1.0 Million in Two Years: An Individual Giving Plan for Lakeshore Literacy Alliance, Tier by Tier, With Who Asks and a Rule on Using Learners' Stories

Student Name

Walden University

MBAX 6850: Introduction to the Nonprofit Sector

Instructor Name

Month Day, Year

From $0.8 Million to $1.0 Million in Two Years: An Individual Giving Plan for Lakeshore Literacy Alliance, Tier by Tier, With Who Asks and a Rule on Using Learners' Stories

The Goal

This plan sets a two-year goal for individual giving at Lakeshore Literacy Alliance, the composite adult literacy organization used in this course: an increase from about $0.8 million a year to $1.0 million, a rise of 25 percent. The goal is modest on purpose. The revenue analysis found that individual gifts are Lakeshore's most valuable dollars because they are unrestricted, and a plan that promised to double them overnight would be a wish, not a plan. Growing them steadily also reduces the concentration risk Froelich (1999) associates with heavy reliance on a single government funder. All figures are illustrative.

The Pyramid, Bottom to Top

Individual giving at most nonprofits follows a pyramid: many donors giving small amounts at the base, fewer giving more in the middle and a handful giving large gifts at the top. Sargeant and Shang (2017) describe this structure as the basis of most individual giving programs. Lakeshore's current pyramid and the two-year target are shown below.

The table shows that most of the added $200,000 must come from the middle and upper tiers. Adding 150 annual donors raises about $30,000; moving 30 more donors into the mid-level tier adds about $80,000; and six new major donors add about $60,000. The mid-level tier is the plan's focus, because Lakeshore has many loyal annual donors who give $250 to $750 and have never been asked for more.

Table 1

Individual Giving by Tier, Current and Two-Year Target, Illustrative

Composite organization; figures illustrative.

Who Asks at Each Level

Each tier has a channel and a person responsible. Annual donors are reached by two mailed appeals and an email series each year, managed by the development coordinator, with a new monthly giving option to raise retention. Mid-level donors receive a personal call or note from a staff member or volunteer tutor once a year and an invitation to visit a tutoring session, managed by the development director. Major donors are cultivated through visits with the executive director and a board member, with each board member responsible for introducing at least two prospects a year. Planned giving is promoted to donors who have given for ten or more years, through a short mailed brochure and conversations at a donor appreciation event. A review of giving research by Bekkers and Wiepking (2011) lists solicitation, simply being asked, among the main reasons people give, which is why every tier names who asks.

Using Learners' Stories

Fundraising from individuals depends on stories, and Lakeshore's most powerful stories belong to its learners: adults who learned to read a prescription label or pass a citizenship test. Using those stories raises ethical questions a grant application does not. The plan adopts a simple rule: no learner's story, name or photograph is used without written consent obtained by a staff member the learner does not depend on for services, with a clear statement that declining has no effect on tutoring. Stories may be combined into composites, labeled as such, when consent is not given or a learner prefers privacy. No story will describe a learner in terms the learner would find demeaning, such as calling an adult "illiterate," a word many learners dislike.

Retention Before Acquisition

Raising money from current donors costs far less than finding new ones. Lakeshore keeps about 58 percent of its donors from one year to the next. The plan sets a target of 63 percent, through faster thank-you letters, a mid-year update showing what gifts funded and the monthly giving option. Each percentage point of retention keeps about 18 donors who would otherwise need replacing.

Timeline

The plan runs over two fiscal years. In the first, Lakeshore launches monthly giving in the spring appeal, makes personal contact with all 180 current mid-level donors and identifies 40 annual donors with the capacity to give more, and the board introduces about 30 major gift prospects. The first-year target is about $890,000. In the second year, the organization asks the identified annual donors to move up, holds its first planned giving conversation event and expects about four new major donors from the prospects introduced the year before, since major gifts usually take a year or more of cultivation. The second-year target is the full $1.0 million. Progress is reported to the board quarterly against both years' milestones, not only against the dollar total, so a slow start in one tier is visible early.

Costs and Risks

The plan adds about $45,000 a year in costs: a part-time donor relations assistant and modest event and mailing expenses. Its main risk is the board's role at the top of the pyramid; if board members do not introduce prospects, the major gift target will not be met. The governance committee will track introductions at each board meeting.

References

Bekkers, R., & Wiepking, P. (2011). A literature review of empirical studies of philanthropy: Eight mechanisms that drive charitable giving. Nonprofit and Voluntary Sector Quarterly, 40(5), 924-973. https://doi.org/10.1177/0899764010380927

Froelich, K. A. (1999). Diversification of revenue strategies: Evolving resource dependence in nonprofit organizations. Nonprofit and Voluntary Sector Quarterly, 28(3), 246-268. https://doi.org/10.1177/0899764099283002

Sargeant, A., & Shang, J. (2017). Fundraising principles and practice (2nd ed.). Wiley.