The Fundraising Pyramid, Know It to Grow Your Nonprofit

November 03, 2020

In this episode of the NP Local podcast, co-hosts, Jason Cass and Scott Niermann, MPA, CFRE, continue to discuss funding and fundraising. Jason and Scott talk about the fundraising pyramid and understanding each layer of the pyramid.

Episode Highlights:

  • Scott describes the fundraising pyramid. (3:27)
  • Scott shares that the bottom layer of the pyramid is the foundation for everything on top of it, and being first-time donors. (3:42)
  • Scott shares that in reality, anything that you’re doing in the broad base, is going to be a two to one return. (4:46)
  • Scott shares one of the elements that he learned from the fundraising school. (5:06)
  • Jason mentions that you should feel confident if you’re doing, what you’re supposed to be doing. (5:29)
  • Scott shares that the goal is to reach the peak of the pyramid and raise more money, and as you move up, you’re going to yield more money. (5:35)
  • Scott mentions that the second layer of the pyramid is the regular givers. (5:43)
  • Scott shares that the third layer of the pyramid is the major gifts, and as you move up the pyramid, you’re spending more time with the donors. (7:58)
  • Scott shares that the pinnacle of the pyramid is the transformative gift, and oftentimes it’s the largest gift someone makes in their life, through a will or estate plan. (8:57)
  • Scott mentions that the pinnacle of the pyramid is called gift planning. (10:54)
  • Scott shares that the nonprofit manager’s challenge is something the boards don’t understand what their role could be. Because if you’re a small organization, you must have a working organization. (15:56)
  • Jason shares that one of the most underutilized areas of a nonprofit is getting your board, and when you look at nonprofits who are successfully fundraising to understand the pyramid, the board is a major factor. (21:33)

Key Quotes:

  • “If you’re not familiar with the fundraising pyramid, you don’t know fundraising, and so we want to break that down. It’s not rocket science, I say that all the time…this is a skill, this is a trade.” – Scott Niermann
  • “Oftentimes, special events are that friend-raiser and it’s also a fundraiser, right? You want some positive net revenue from any event, and you want to grow that.” – Scott Niermann
  • “One of the things that they’ve taught me that if you get a two to one return out of an event, you’ve done okay, all right…Two to one net of expenses, you’ve doubled your money, that’s fine. Obviously, if you can do better than that, heck that’s wonderful.” – Scott Nierman
  • “I want to encourage folks who are out there, struggling with fundraising. This is an investment that is worth your time to get the training you need. If you’ve been in fundraising five years, full time or almost full time in management, go after that certified fundraising executive, take a prep course, take the exam.” – Scott Niermann

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