Strategy & Marketing

Fundraising Ideas from Barack Obama

An important technique all churches, ministries, and non-profits can learn from Barack Obama’s presidential campaign is how they focused their fundraising.  While Hillary Clinton was focusing on a handful of major donors, Obama concentrated on many more smaller donors – primarily using the web.  While no one would turn away a million dollar gift, understanding  the difference is important.  Here’s why:

1)   When someone gives a major gift, it’s usually a one-time  thing.  You usually can’t go back to the well with that person.  In Hillary’s case, as the campaign came down to the wire, she couldn’t go back to those big givers for more money.

2)  But with people who give $25 – $200 gifts, you can go back many more times.  So if you have thousands of people giving smaller gifts, by turning them into regular givers, the amount adds up.   And if you can make them regular, monthly givers, you’ve reached fundraising heaven.

3)  Major givers often want a voice in the process.  I had a once client who happened to have a board of very rich guys.  So rich, they gave 85% of  the organization’s total budget.  Sounds good, but the leader told me that when people give that much, strings are often attached.  He was conflicted, but he admitted he’d much rather have an army of smaller givers than these major donors.

It’s interesting to note that although the legal limit for campaign donations is $2,300, 47% of Obama’s giving came in gifts of $200 or less.   Reports indicate that the key to his giving was creating an emotional connection through his website between his organization and the community of supporters.  He also created an successful “matching” donation program that brought many new givers into the campaign – so people who felt their small gift of $15 wasn’t much, could be matched with other givers and feel like they were making a bigger difference.

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4 Comments

  1. Sorry Phil….many people give repeat major gifts.  It's all in how they are treated.

    The contrast between FR strategy of the two camps was designed to match the DNA of the supporters.  Obama had a younger, broader group whose ability to give was less.  Clinton has an older more wealthly crowd.

  2. I'm not saying all major donors don't give again, but virtually every news source indicates that one of Hillary's biggest problems towards the end of her campaign was that she had put her faith in major donors for the bulk of her campaign, and was unable to get more from them at the end.   By contrast, Obama's  smaller givers kept on giving, keeping him budget healthy all the way to the finish line.

  3. Thanks for highlighting the role of small donors.  Yes, major donors do repeat their gifts, but too often nonprofits waste time wishing and pursuing wealthy individuals not passionate about the nonprofit's mission. 

    Many nonprofits forget their base/core comes from "small" donors.  The reality is that 76% of all private dollars comes from individuals.  Of those dollars, over 50% came from middle and low income individuals.  We hear about the BIG gifts, but it's the small gifts that matter. 

    I'd rather have a $100 a year donor for 10 years who names the nonprofit in their will and tells their friends about the nonprofit's mission than a major donor who gives a one time gift and tells no one.

  4. I sorely wish feature films could be financed this way, however, capital raising laws in the US (and Australia) restrict the number of investors to about 20 people – before complex and costly legal requirements must be met.

    A funny thing about utility theory is that people's tolerance to risk is not linear. We are quite prepared to gamble small amounts with almost no hope of financial return. Most people are prepared to do this on a regular basis (hence the existence of lotteries etc).

    However, when dealing with large amounts of money, investors become far more analytical. This could provide one explanation why Clinton ran out of funds. They didnt rate her chances of winning sufficiently high to put further money in.

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