I remember the conversation well. Just over a year ago, I sat across from a peer who is among the leading fundraising professionals in the country.
There we sat, in the café area of what’s known as “the Castle” at the Smithsonian, discussing setting expectations around strategies for campaign gifts.
Why do I remember the talk so well?
Because it was bold, possibly controversial, and, even a year later, rings true. My peer lamented the “gift pyramid,” and I agreed. Here’s what we established: a gift pyramid is a limiting tool and is not expansive. Moreover, it’s often wrong. Especially when working with first-time donors. In her experience, new donors outperformed gift pyramid expectations more often than not.
As part of this conversation, two important takeaways emerged.
The first: Don’t assume you can’t get a principal gift from a first-time donor.
The second: Passion matters.
I recall so vividly how positive and emphatic my peer was about the uselessness of the gift pyramid. Though I often suspected that this was the case, the fundraising field simply hasn’t made a change from a data perspective.
As part of her recent efforts, she had discovered that planning study research didn’t properly account for the vast potential of first-time donors. She found this research, and the resulting pyramid, limiting and lacking in creativity. I remember her saying, “It just seems like such an outdated thing. So transactional.”
I agreed. “I think we can do better.”
Why change what’s working?
By now, most people are aware of the changes in privacy law, especially those in the United Kingdom with GDPR. Even in the United States, it’s not a hypothetical. California has a consumer privacy law set to begin in 2020, and New York is also developing a new privacy law. There’s also talk of sweeping privacy laws at the federal level.
The old tried-and-true methods of wealth screening might change a lot sooner than most are considering. This means that the functionality of pyramids will have to change too, especially considering those first-time donors who have not granted an organization to run a screening on their capacity.
What’s the Pyramid 2.0?
With changing privacy laws, how will we determine capacity and stretch gifts? We, at least, have good news to lead with: very few donors get upset if you ask for too much. According to the 2018 U.S. Trust® Study of High Net Worth Philanthropy, only 9% of high- and ultra-high net worth individuals said they stopped giving because a request amount was inappropriate.
That said, our practice certainly won’t be improved because of new privacy laws, and yet these laws are critical to our society’s well-being. At a minimum, we should pause and consider the impact of potentially losing a key data element as we plan our major and principal gifts. We should also consider the implications on time and resources.
One of our clients, by many accounts, would be considered a success at face value. They had numerous donors giving $500,000 and greater unrestricted gifts annually. But we knew their donors were capable and willing to do more, and not because of the data.
When we suggested a $250 million campaign above and beyond annual fund, the staff gasped. They thought this was mission impossible; we knew otherwise.
During the study, we spoke with donors who were incredibly passionate because of their convictions and the critical nature of this organization’s mission. And yet, while engagement levels were off the charts, highly customized and personalized asks were not. We focused on learning what made their donors really tick. What did they want their legacy to be? What really moves them? We quite often talk about this in fundraising but don’t invest the time to do so among our various deadlines and goals.
When we learn – and I mean really explore – what motivates our donors, we are able to arrive at a living plan that still moves efficiently through the giving cycle, and that still closes quickly, but is also defined and built by co-creating and shared vision. The pyramid, then, becomes alive: less reliant on data and more reliant on human intelligence.
When does the pyramid make sense?
Challenges aside, there remains a practical use for the gift pyramid: as an illustrational and educational tool for executive leadership and boards. Fundraising professionals need to be able to visually tell a story about the time and efforts principal giving demands and a gift pyramid in combination with a gift stratification chart can be quite effective from a storytelling perspective to set expectations and to make your internal case to secure the resources needed to achieve your goals.
Building more than a pyramid
Despite its utility internally, the fact is that we’ve found very rarely do people give according to our best-laid pyramid building block: they give less, or more, or don’t give at all. People are fluid. And we should be too.
In retrospect, I’ve never seen a campaign precisely follow a pyramid. It might follow a general road map, and privacy laws might soon mean that the road map becomes a treasure map in some secret code. Privacy laws are going to handicap our ability to understand some people’s capacity, and while we don’t want to become a field of “guessers,” we will need to sharpen our abilities to rely on the art of philanthropy. An art that inspires what is best in each of us and our donors.
Why have I been pondering my conversation for more than a year now? Because it’s important. I do not believe we should just keep doing the same thing because it “works”. “Working” isn’t good enough. We must push our field to invent. Just as we ask our donors to stretch their capacity, we must also stretch our own.
Jennifer Harris, Ph.D., is Senior Vice President at Graham-Pelton Consulting. Contact her by email or by calling 1-800-608-7955.
Graham-Pelton is a fundraising and management consulting firm for leading nonprofit organizations worldwide. Our mission is clear: to elevate philanthropy so nonprofits can flourish.