The HUGE Benefits of Using a Fundraising Growth Model

There's a reason most development directors only last 18 months.

Raising money is a grind.

 

You inherent a whole organization's way of doing things - which of course includes the not-s0-good strategies of the past - and then you're expected to bring in a bunch of money overnight. Even if you've been with your organization for years, there are always legacy strategies that linger for years after the people behind them have moved on. 

And so you every year you look at your sprawling development program and try to figure out how to get it to move forward. Where to start this year. Where to focus in order to have the biggest benefit. How to tie all of the pieces together in the best way. 

"It's in today's climate  that the growth model is so ideal."

 

 

The central concept in a growth model is the idea of a system with parts that interact with one another. Every piece of your fundraising system is going to have some impact on the rest of the system. And it’s the interplay between parts that’s where success lies. 

 

fundraising growth model

That’s why one of the first things you do when you're improving a development program is tease apart the donor experience into various phases. Each phase can be thought of as a conversion point. And each of these individual pieces can be optimized. You can focus on each one.

"You can make each piece better." 

 

By focusing on improving each part — rather than simply the whole — you can actually raise much more money. And as you're going to see, the data behind why this works so well is pretty amazing!

Here’s why that’s possible: there are many parts to an effective growth model. 

If you simply focus on getting more signups or designing your giving experience better or any other piece, you are leaving the rest of your model to struggle. In other words, the gains from one improvement can be made, but are sort of moderated by ineffective other parts of the system. 

"Key improvements can have an exponential impact." 

 

In other words, there isn’t a single skeleton key to unlocking growth. But a development program that looks at fundraising as a growth model — and makes improvements in each area of that model — can far, far outperform what you’re doing today. 

Let’s look at why this is the case — how this happens. 

We’re going to do a comparison so we can see how the math plays out here. 

We’re going to look at a development program. Then we’ll take that same program and make improvements to it. And then we’ll compare the results.

This one is our baseline...

Successful fundraising
(Remember, these numbers are just for example. If you want to see how powerful a growth model would be by using your organization's numbers, we built a growth calculator spreadsheet you can use.  Check out the growth calculator here).

So looking at the numbers above and doing the math, what do we get?

A total raise of $25,000. 

That's pretty solid based on the audience size, right? 

So now let’s look at how things could play out if an organization was trying to increase the total giving amount by 50%. 

So if we increase the total raise by 50%, that gives us a $37,500 raise.

To raise this, what would the organization need to do? How would you reverse engineer a 50% increase from the initial campaign?

Well, it’s actually not that complicated.

All you need to do is increase any single variable here by 50%. So you could grow your email list by 50%. Or you could increase the percentage who give by 50%. Or you could increase the average gift size by 50%. 

Holding all other things constant, if you increase any one of these variables by 50%, you’ll increase the overall raise by 50%, which is pretty amazing. 

Raise more money

But this still doesn’t go far enough. It’s still not looking at your entire program as a system with parts that play off of one another. 

Here’s the issue: we are still only talking about boosting one lever at a time. 

Each of these stats — each of these conversion points — has the potential to be improved significantly. Too often we think that ‘if only we could get our current donors to give more’ or ‘if only we could find more new donors’ then all of our problems would be solved. 

The trick — and this is the most important thing to realize — is that you need to approach your fundraising in a way that looks at each of these important places and says ‘How else can we maximize this? How else can we improve this? How can we get even more to complete this step?

Fundraising growth model

You don’t want to be thinking of your fundraising generally. Look at each of the key pieces and go deep! Dig into them and make them better.

"There are so many quick and easy improvements most organizations can make."

And here’s why I say that...

I know you're probably thinking that a 50% increase sounds grandiose. But when we say “One way to get that would be to build our audience by 50%” it doesn’t seem so unreasonable anymore.

Because if you really focused on it, of course you could grow your list by 50%. 

Just like you could really work on boosting the average gift size as well. Or getting a higher percentage of people to donate.

But why does this matter so much? Why focus on improving each part? What difference does it actually make in terms of money raised? Well...

Let's dig into the numbers!

The first example raised $25,000. And then in the second, they increased that by 50%, which allowed them to raise $37,500.

In this version, the organization makes a commitment to increase the effectiveness of each conversion point by 50%...

Growth Model (15).png

Rather than look at boosting a single variable, you want to increase multiple pieces simultaneously. That way the benefits from each piece lead to additional benefits at each subsequent conversion point. 

"Increasing each variable at the same results to exponential growth." 

 

So if you can increase the number of people in your audience, and increase your conversion-to-donor percentage, and increase gift size…all of those things stack on top of each other in a remarkable way. 

Plus, it makes actually doing the work easier because you can dig into each area and figure out what it takes to boost it.

"Rather than trying a little fix here and a little fix there, you take each one and maximize its impact." 

 

And then over time, you continue to tweak each of them. You look at them as levers and work on continually improving how well they work. 

So what’s your guess?

How much money this organization would raise if they increase each of these pieces - audience size, giving percentage, and gift amount - by 50%?

The original raise was $25k. The 50% boost was $37,5. 

How much would a growth model raise for this organization?

$84,375 

 

The growth model raised more than 3x the original raise.

And more than 2x the scenario where we increased the overall raise by 50%. 

All by teasing apart the full donor experience and working on optimizing each of the key pieces, in a way that plays each piece off each other in a really valuable, beneficial way. 

This is the kind of power approaching your fundraising through a growth lens gives you. You unpack the pieces, narrow in intensely to make each piece function better, and then watch as those fixes bubble up into a system that raises significantly more money. 

Fundraising amount