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Do You Have a Fundraising Gap
or Bulge?
By Mark Montini
Reprinted with permission
Let's start with the obvious: Candidates hate to raise money.
They understand that it's a necessity if they want to win, but
they still hate doing it. As a result, they tend to favor the
fundraising tools with which they are most comfortable.
For example, candidates with a sales background or a great
personality tend to favor personal solicitation but shy away from
tools like direct mail. On the other hand, candidates who hate
selling anything (let alone asking for money) tend to avoid
personal solicitation and primarily use less-personal fundraising
tools like direct mail.
The desire to stay within your comfort zone is just human nature.
And, you can raise money effectively doing that - but only for a
little while.
I had a congressional client a few years ago who was one of those
born salesmen and, even better, was an incredible networker. He
had done a great job over the years of building and developing
relationships with lots of people. His personal list of contacts
was the best I'd ever seen for a first-time candidate.
Obviously, his favorite fundraising tool was personal
solicitation. Within a matter of weeks he raised over $200,000 -
all through personal solicitation -- and was the story in the
campaign. Based on his initial fundraising success, everyone -
including the candidate himself - assumed he'd easily raise close
to $1,000,000 for his campaign.
He didn't even come close.
Believe it or not, the same candidate who raised over $200,000 in
the first weeks of his campaign only managed to raise another
$110,000 in the next seven months.
So, what happened?
There wasn't a scandal. Nothing happened on the campaign that
would slow his fundraising. Simply put, by relying exclusively on
personal solicitation for his fundraising he became a one trick
pony. When that pony gave out, he was out of luck - and money.
You see, his early fundraising success was all the result of large
gifts coming in through personal solicitation. As a matter of
fact, most of the people who contributed sent the maximum amount
they were allowed to contribute at the time - which meant they
couldn't contribute again.
Once he'd worked his way through his personal contact list, his
prospects for raising money dimmed considerably.
He wouldn't use direct mail because "it's too big of an investment
and nobody I know likes it." He wouldn't do telemarketing because
"people hate getting calls and the money it raises doesn't justify
the number of votes it loses." He wouldn't do big events unless he
could get a big-name speaker because having events with a
lesser-name speaker would "make us look like a second-tier
campaign." He didn't want to do house parties because it "seems
like a lot of hassle to raise a few hundred dollars." He didn't
really want to do a finance committee because "he'd already asked
those people to contribute and wasn't comfortable asking them to
do more."
You get the point. The reality was that while he was a great
fundraiser, he didn't want to use any fundraising tools except the
one with which he was the most comfortable.
The result was that we had two HUGE gaps in our fundraising
operation. We had almost no small-dollar donors and very few
mid-dollar donors.
Now, that's not a big problem early on in your campaign, but it
will inevitably become a big problem later in your campaign -
after you've exhausted your list of high-dollar prospects. In
other words, after an initial surge of success you'll run out of
prospects and your fundraising will go into the tank.
It's not just a problem for candidates who favor high-dollar tools
either. It's just as much of a problem for candidates who only use
low-dollar tools.
If you only use your low and mid-dollar tools, you're going to
leave a lot of money on the table. You're list of donors will
inevitably include a number of people who would be willing to give
you more if you just asked. However, since you're not using the
high-dollar personal solicitation tool, they will never get asked
and you'll never get the extra money.
That's why it's so important to have a balanced fundraising
strategy that includes tools targeting high, mid, and low-dollar
donors. It's one of those things where the sum is greater than the
pieces.
Your low-dollar tools will bring in large number of donors without
a big investment of time. Your mid-dollar tools will allow you to
see which of those donors have the potential to justify contacting
them personally. Then, your high-dollar tools allow you to see
which of those mid-dollar donors will give even more. Here's an
example of how it might work on your campaign:
1. You use direct mail and/or telemarketing to identify 100
new $25 donors.
2. You invite those donors to a $100 event and 18 of
them attend.
3. You then set up a meeting or phone call with those 18
to ask for $500 and three of them say yes.
Do the math and you realize only using low-dollar tools on your
campaign would have meant you left $3,300 on the table (18x$100 +
3x$500). That's how you can make the sum of your campaign tools
worth more than the individual pieces.
The Lesson? If you already have a donor list, analyze the levels
at which your donors are giving. It should be a pyramid with, for
example, 15% high-dollar donors, 35% mid-dollar donors, and 50%
low-dollar donors. If you discover that you have a gap or a bulge,
focus on more effectively using the fundraising tool(s) to
eliminate the gap or bulge.
If you don't have a donor list yet, the first lesson is WHAT ARE
YOU WAITING FOR!? The second lesson is to make sure your strategy
includes tools that target all three types of donors.
Until next time, remember, campaigns that get the most out of
their time and money usually end up winning.
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