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Is The Donor Pyramid Really Dead? An Open Letter to Claire Axelrad from Andrea Kihlstedt

Inspired by her recent posts on the death of the Donor Pyramid in Fundraising Success Magazine and Maximize Social Business Blog

donor pyramid

Dear Claire,

I found your “obituary” on the Donor Pyramid interesting, but to paraphrase Mark Twain, reports of its death have been greatly exaggerated. It came as a bit of a shock to me, because it is far from dead. In fact, it’s not even on its last legs.

I know the image if the donor pyramid reminds you of Egypt and tombs and slave labor. But this image — and the tools that grow out of it — continue to capture one simple and important truth:

In fundraising, while all donors are important, not all donors are equal.

Claire, you’ve breathed life into an important topic. But really, social media has neither toppled nor crumbled the donor pyramid!

The donor pyramid is alive and well in capital campaign fundraising where it got its start. And if used properly, it continues to have important applications in all fundraising campaigns.

When organizations use the donor pyramid to focus their attention on raising large gifts, that’s just what happens — they raise large gifts.

You, along with Julie Dixon and Denise Keyes who wrote The Permanent Disruption of Social Media in the Stanford Social Innovation Review, have attributed to the Donor Pyramid powers it never really had.

Donors have never marched neatly up the donor pyramid from the bottom to the top in a neat and predictable way. They’ve always come into organizations at different levels. Some entering at the bottom with small gifts. Others jumping in at the top. Some moving up over time and others falling away (the topic of much conversation these days).

Anyone who has worked on a capital campaign — that most remarkable high-stakes fundraising process — knows that major gift fundraising has always been a messy, fantastic and very human process.

The donor pyramid helps make sense of this complexity by reminding us to focus a disproportionate amount of attention to the precious few donors who can breathe life into our mission in the way that small donors, even collectively, can not.

The Social Media Revolution has Energized the Donor Pyramid

Far from killing off the donor pyramid, social media has made it more important than ever.

Amidst the constant swirl of digital contact and influence and friending and tweeting and liking and big data, we need, more then ever, something to help maintain our focus where it will make the biggest difference.

The power of the donor pyramid is not that it’s a predictor of donor behavior, but rather, it’s a simple image that reminds us that in fundraising, as in most everything (with thanks to Wilfredo Pareto), the greatest returns come from a small percentage of donors.

This pattern hasn’t eroded over the years; it’s become even more true as income discrepancies grow. And for the most effective fundraising, we must have the courage and discipline to build strong relationships with those large donors.

But, putting aside your untimely obituary for the donor pyramid, Claire, I agree with much of what you say.

Swirl in the Social Vortex but Don’t Lose the Donor Pyramid

I think social media is one of the best things since sliced bread. It’s literally transforming our world. It expands our reach and as you say, Claire, it can keep donors “smiling and enjoying and feeling good.”

If people in the fundraising business aren’t making great use of social media, they’re missing something important.

But if the time they spend on building their social network sucks their focus away from the top levels of the donor pyramid, they are not raising anywhere near what they might.

People who can give large gifts aren’t likely to do so because they’re swirling around the social vortex! Find and engage them that way, but remember that’s just the beginning.

The largest donors will give big gifts because you’ve taken the time and energy to find out who they are and what they’re passionate about.

That kind of work is time consuming and scary for many people. And all too often, development folks hunker down behind the safety of their computers instead of building personal relationships with donors.

So please, Claire, champion the role of social media, but don’t encourage people to focus on it at the expense of the most important in-person major donor work!

Even in today’s world of crowd sourcing and social media, personal attention focused on major donors is critical.

The Donor Pyramid and the Social Vortex Work Together

Recently, I helped a young, savvy nonprofit with their $40,000 Kickstarter campaign.

And guess what?

At the end of the campaign that used both in-person asking and on-line giving supported by a large and effective social media push, 80% of the gifts had come from about 20% of the donors. And the great percentage of the larger gifts resulted from personal attention!

Here’s the reality. If we had relied entirely on the energy of the social media vortex, this remarkable little organization would have missed a great percentage of their gifts of $1,000 plus. And they would have raised closer to $10,000 than to the $40,000 they actually raised.

The donor pyramid provided the organizing structure for that Kickstarter campaign and the social media vortex (to use your word) energized the base.

We created a clear and specific chart that called for 1 gift of $10,000, 2 gifts of $5,000, 3 gifts of $2,500 and so forth.

Then we added the names of the people on their lists who could give at each level. We assumed that most of the low level gifts of $100 or less would come in as a result of their social medial network.

But throughout the campaign we maintained unwavering focus on identifying, getting to know and asking the people who could give the higher gifts.

These basic major gift practices aren’t going away any time soon. They work for large organizations and small. They work for “crowd-sourced” fundraising campaigns. They work for capital campaigns. And the donor pyramid will even work for annual funds .

Don’t Like the Pyramid Image? Let’s Find Something Better.

I know the pyramid reminds you of tombs, Claire. And indeed, it doesn’t capture the entire picture.

I offer this new image that combines the energetic and chaotic nature of social media with the visual reminder that, in fundraising, not all donors are equal.

And let’s agree that in this wonderful world of social media, basic principles of major gift fundraising are not dead yet and not likely to expire any time soon.

Thank you, Claire, for inspiring these thoughts and for your many excellent contributions to the fundraising profession.

With appreciation,

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Andrea KihlstedtAndrea Kihlstedt’s classic book, Capital Campaigns: Strategies that Work is now going into its 4th edition! She and Gail Perry co-founded Capital Campaign Magic [link: capitalcampaignmagic.com] where they provide virtual coaching for organizations in the early stages of campaign planning. Andrea writes and speaks about and teaches fundraising. She lives in New York City where she enjoys good-natured debate.

Topics: Fundraising