Goodbye donor pyramid. Hello champion P/E/O-ramid

The dust has settled at The Agitator after Roger and Tom’s epic series on The Donor Pyramid Lie. Still, Joanne Fritz hit up with two epic posts of her own (here and here) this past week that have me thinking that one of the most important elements of the donor pyramid epitaph–and one of the key elements of new vision that we all ought to have going forward–still needs to be written.

In the Agitator series, Tom lists a series of seven fundamentals which he contends remain valid with regard to the donor pyramid. Click here to see the whole list; for our purposes the first two items on that list are the most germane, below:

1. Donors who initially make small gifts can indeed be cultivated — dare I say it?! — up the ladder to make bigger gifts … and even bequests. Even HUGE gifts and bequests.

2. Database marketing approaches that utilize personal giving history, donor-expressed preferences, etc. can contribute mightily to moving donors up that ladder.

I do not take issue with the veracity of what Tom notes. But looking toward the future of fundraising, I do want to ask about the desirability and suitability of these fundamentals.

In Joanne’s post, Largest Philanthropists Gave Less, Follow Their Own Drummer in 2009, the title alone astutely underlines two trends that ought to lead us to ask whether a fundraising approach built around migrating donors up a pyramid is either a desirable or suitable master strategy. As Joanne notes, giving from the top philanthropists plummeted 75% from 2008 to 2009. And lest that seems like purely a function of economic distress, Joanne adds:

Rather than write checks to their favorite causes, many large donors are setting up their own foundations dedicated to solving some big global problems. Wealthy donors increasingly want to see concrete, measurable results from their giving. They also want to create large scale change, rather than a piecemeal solutions.

Don’t miss the last sentence: “piecemeal solutions” can easily mean gifts to fund programs operated by your and other nonprofit organizations. After all, if a mega-donor is after large-scale change, this is something altogether different than supporting multiple discrete programs in multiple discrete organizations with multiple generous donations.  Your donor cultivation pyramid may be reduced to a launching ramp as major donors tire of  seeing their resources–financial, intellectual, and relational–trapped in multiple silos (i.e., nonprofits that don’t communicate or work together to effect large-scale change) and decide to design, build, and fund programmatic efforts of their own–even after the economy rebounds.

So is there really any alternative to a pyramid that exhibits the fundamentals Tom notes in his Agitator post?

Joanne’s post, Is Micro-Giving the New Layaway?, offers some tantalizing clues in this regard.

Joanne notes that even in the grip of recession, Americans gave more to Haiti disaster relief than they previously had to tsunami relief in 2004, with one noteworthy difference: the average Haiti gift was $109, as compared to $208 for the Asian tsunamis. Sums Joanne, “We are also giving to charity in more ways”–e.g., online giving, mobile giving–“but in smaller amounts.”

Online giving (with its social network widgets and badges) and mobile giving (powered by the ubiquitous text message) are notoriously social undertakings. That is, I am increasingly likely to hear about a cause (or at least to be motivated to act on what I’ve already heard) through key friends and influencers rather than traditional nonprofit-driven marketing channels.

As such, a “donor pyramid”–in which my growth in the cause is related to “cultivation” by the nonprofit and is measured by increasing gift size–is poorly suited to the reality of a world where my giving is motivated and shaped by friends and influential non-institutional voices not only initially but over time. In other words, it’s not as if I’m recruited to a cause by friends but then the nonprofit through which I gave assumes greater influence over me and my giving decisions than they do.

In a world of micro-giving, a new kind of “pyramidal” measure is needed–one where nonprofits not only recognize but affirm that I am (and always will be) a far greater influencer in my sphere of influence than they are. The job of the nonprofit? To equip me to recruit those I know to participation in the cause, and to assist me in coaching them into engagement and ownership of the cause in their own sphere of influence. (For quick definitions of Participation, Engagement, and Ownership, check out this previous post.)

That recruitment process means that it is I, not the nonprofit, that has the most potent pyramid–a group of my friends and acquaintances who are at various stages of involvement in the cause we and the nonprofit love and share. What role does the wise nonprofit of the future have in that pyramid?

It serves as the base. The convening mechanism. The platform. The stage on which the action–performed by the champions, equipped by the nonprofit–plays out.

Interestingly, put Joanne’s two posts together and you come to an interesting conclusion: It’s not only the rich who are wanting to break out of non-profit pyramid silos erected by organizations. It’s the micro-givers, too. So not only does our understanding of the giving pyramid need to change; our understanding of our own organization needs to change as well, from fund-seeking doer to funding-platform equipper.

Last word to Joanne, who says it better than I have here:

I like the idea of framing micro-giving within the context of broad social change. We’ve already talked a great deal about micro-giving as the democratization of philanthropy where anyone can participate, no matter what their means. Now the picture widens and we can see that micro-giving may be intertwined with new economic realities and cultural shifts.

About Pastor Foley

The Reverend Dr. Eric Foley is CEO and Co-Founder, with his wife Dr. Hyun Sook Foley, of Voice of the Martyrs Korea, supporting the work of persecuted Christians in North Korea and around the world and spreading their discipleship practices worldwide. He is also the International Ambassador for the International Christian Association, the global fellowship of Voice of the Martyrs sister ministries. Pastor Foley is a much sought after speaker, analyst, and project consultant on the North Korean underground church, North Korean defectors, and underground church discipleship. He and Dr. Foley oversee a far-flung staff across Asia that is working to help North Koreans and Christians everywhere grow to fullness in Christ. He earned the Doctor of Management at Case Western Reserve University's Weatherhead School of Management in Cleveland, Ohio.
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3 Responses to Goodbye donor pyramid. Hello champion P/E/O-ramid

  1. Joanne Fritz says:

    What a thoughtful post! I’m delighted to be a part of it. These are such important issues that may well change the fundraising landscape entirely. How do we adapt to it when we are only perhaps an initiator but not the prime player in our own fundraising? It’s a little like trying to steer the car from the back seat.

  2. EFoley says:

    Steering the car from the back seat is a great image! We nonprofits are definitely no longer behind the cause “wheel” the way we once were. I hope, Joanne, that we nonprofits can become the car–the platform, the convening mechanism. This means coaching champions to drive well, of course!

  3. Pingback: When It Comes to the Foundation of your Fundraising Program, Rely Completely on the Generosity of the Poor. | Rev. Eric Foley

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