The recent string of bank failures has prompted Treasury Secretary Henry Paulson and the Fed to propose a $700 billion bailout plan. While Congress and the President wrestle with the details, the fallout for the economy remains to be seen.
However, one thing remains pretty certain. Nonprofits will be competing for a smaller pool of major donor prospects. The fact is, a lot of people have lost a lot of money this summer.
Nonprofits will find it more difficult to raise large sums of money from individuals. In response, nonprofits should devise strateges to maximize revenue from the long tail (apologies to Chris Andersen) of the fundraising spectrum.
If we use Andersen's analogy, major donors represent the "head" of fundraising. There are a few of them and they have significant impact and ROI. In the tail, you have the typical donor. There are many but they don't give as much. Taken together, however, the donors in the tail can be as significant as a major donor.
The best way for nonprofits to maximize long tail donations is to let others do the asking. Events like walkathons, races, and other "a-thons" are great vehicles through which people can participate and solicit donations on behalf of an organization. This model allows volunteers to do the asking. Nonprofits benefit the increased number of "asks", high rate of return, and cost efffectiveness of the friends-ask-friends model.
It's even more cost-effective if such a program runs online. One of the many great things about major donations is that only one check needs to be processed. A fundraising a-thon without an online donation processing vehicle is highly inefficient. Hundreds and even thousands of donations processed manually is wasteful. But, when done online, the nonprofit can simply run the event and the money goes directly into their bank account. Take a look at SWEET online fundraising software as a viable option for reducing your fundraising costs while leveraging the long tail of your fundraising community.
Economic times are tough. But our missions won't rest. There are still diseases that need to be cured and people that need food. In the face of dips in major donations, nonprofits should turn to different vehicles like "a-thons" that can cost-effectively replace some of the lost revenue in the coming years.
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