When I was a kid, my mother had a favourite saying that she’d pull out and use on us every once in a while. When we came home all excited about something we saw advertised, she’d say “Honey, if it sounds too good to be true, it probably isn’t.”
Now, if you’re reading this, you’re likely a fundraiser with a few disappointments under your belt. And, as we know, there are those in our sector (as in all sectors, I’m sure) who are better at promising the moon than actually delivering it.
Having said all that, I’m going to promise you something that should sound too good to be true. Stay with me…
Philanthropy is a noble endeavour.
Those of us who engage in philanthropy are living the highest form of human expression. Philanthropy does indeed bring out the best in many of us – that’s why we do this work!
At the same time, philanthropy is a business with a bottom line – just like any other business. And, in fundraising, we measure our investments and the returns those investments generate. So what kind of return on investment do different types of fundraising generate? Let’s use cost per dollar raised as our metric. With this KPI, we’re measuring how much it costs your charity to raise a dollar using a particular method.
So, for example, your cost per dollar raised for your annual gala might be 50 cents. For your direct mail or digital fundraising program, it could be 40 cents. Things usually get more profitable when we move up to monthly, mid-level and major gift fundraising – with costs per dollar ranging from 20 to 35 cents.
But, (and here it comes!), what if I offered you a method of raising money for your mission where the cost per dollar raised is a nickel or less? You heard me right – a nickel. Five measly cents.
And where do you find this incredible payback on your fundraising investment? You find it when you market bequests to your annual giving (usually direct mail and monthly) donors. We have known for many years now that legacy gift marketing is the most cost-effective fundraising method available to us.
So you may be thinking as you read this: “If this ROI is so freakin’ great Fraser, why isn’t everyone doing it?” The answer is simple: While the return on your investment is fantastic, you have to wait for it. You need to layout money this year, next year and the year after that – only to see your revenues appear between five and twenty-five years from now.
And here’s the sad truth.
Many charity leaders just can’t seem to look at a horizon five years or more out. Other charities are so desperate for immediate cash they’ll take a low-return event this fiscal rather than a high-return payback several years out. Others, just don’t seem to believe the evidence that’s abundant by now. (If you haven’t yet, check out our State of the Legacy Nation Report to see just how much money is in Canadian wills today!)
Perhaps your organization’s leadership should look at legacies in terms of their personal finances:
- Many people start saving for their retirement thirty or forty years before they’re going to reap the benefits. But, in the long term, most retirees would tell you they wish they started saving even earlier!
- If you were thinking short-term, you would rent your home rather than take on a 25-year (or longer!) mortgage that puts you hundreds of thousands of dollars in debt. Yet, ask anyone who has paid off their mortgage if they’re happy they took that risk all those years ago.
- Many of us start saving for our children’s post-secondary education while they’re still in diapers. Yet, when it comes time to pay that first tuition installment, just about all parents are glad that they started making the savings sacrifice so long ago.
I’ll close by putting this proposition to you: Unless your organization is in a life-and-death struggle for your financial survival, there is an important place for legacy gift marketing in your revenue portfolio. To not make legacy revenues and important income streams is to leave money – a lot of money! – on the table.
And no fundraiser worth his or her salt wants to leave money behind!