Fundraisers again have this simple tool for setting campaign goals by size of gift. But users need to mindful of one pitfall.
The software company Blackbaud has rebuilt the pyramid. In designing a fundraising campaign, planners usually run through an exercise of identifying how many gifts are needed at each level of giving. Getting the totals to add up can be a chore. This online tool yields a simple answer that can be used as a starting point.
Back in my pre-blogging days, I asked the question whether anyone had ever done any research to verify that these are valid expectations. I don't think any has been done, although the pyramid is based on the regular pattern that many distributions fall into, sometimes called a Zipf or Pareto distibution, which is sometime simplified to an 80/20 rule (20% of the donors will account for 80% of the donations). This is the same type of distribution that is the basis for The Long Tail, by Chris Anderson.
But caution to anyone using this tool: there is a problem with what is called the lead gift, the top gift on the pyramid. This calculator assumes that that lead gift will be 10% of the total, but that is not necessarily the case. The lead gift can be much larger than 10% of the total, and there is no way to predict exactly how large it will be, even though the smaller gifts will fall into the Zipf/Pareto pattern . But unfortunately, the top number in one of these distributions can't be predicted.
An example that shows this is the distribution of population by country. There is a pretty regular pattern up to the third largest country, the United States, with 300 million people. But then the top two jump to 1.1 billion for India and 1.3 billion for China. There's no way to predict how much larger a Microsoft or a Google will be than its next largest competitor, and the same is true for the largest gifts.
So a lead gift can be 10% of the total, but it can be 40% or 50%, too. So for a large campaign, don't use the pyramid to set the lead gift. Research the level of the lead gift independently, based on knowledge of the prospective lead donor's circumstances. Then use the pyramid only for the balance of the funds to be raised.