From Good to Great in 5 Years:

What do nonprofits with the largest revenue leaps have in common?

In a 5-year study, nonprofits grew 3x more when they focused on these key areas.

The Challenge

Most nonprofit teams are used to having limited time and limited resources to draw on when it comes to growing their organization. With these hurdles, it can be difficult to move the needle forward – whether you’re measuring that growth by number of dollars raised, number of donors engaged or number of people served.

In the late 2010s, BDI focused on helping our client partners build out new streams of revenue to accomplish two very broad yet critical goals:

1. Drive growth.
2. Increase services offered.

We could not have expected the impact a global pandemic would make upon charitable giving in the years to come. However, those organizations who rose to the top, even in a time of crisis giving, had already taken steps to position themselves for growth.

The Solution

In 2017, BDI launched a 5-year study to identify the common strategies that led to significant growth among our client partners. 
First we asked who was successful in growing their revenue and base of support:

• BDI’s benchmark looked at 49 nonprofit organizations. Of these, 47 were regional Rescue Missions, and 2 were National/International organizations.
• Of the total surveyed, 8 nonprofit organizations rose to the top.
  • 7 in the top were regional Rescue Missions, spanning small, mid-size and metropolitan locations from the East Coast to the Midwest, and all the way to California – note their success wasn’t based on being in a big city with a lot of donors!
  • During the 5-year window, leadership changed at 6 of the top 8 organizations studied – their success wasn’t a result of having decades of experience!

 Next, we asked what drove the top 8 organizations’ success…

The Results

BDI reviewed Donor Performance Analysis data from January 2017 through December 2021 for all 49 organizations within the study.

Although many of BDI’s nonprofit partners experienced the “COVID bump” of increased giving during CY 2020-2021, the top 8’s overall revenue went beyond this average increase.

The top 8 organizations had an average additional $1.2 million revenue growth that did NOT come from individuals. This led BDI to ask, what was causing this impressive growth? Read on to learn more…

Unlocking the Top 8’s Growth

The greatest revenue stream? Doing what you do best.

Commonality #1: Multiple Major Gift Officers

A key feature among the top performing organizations was their willingness to focus on growing support among their middle and major donors… something many nonprofits cannot afford the time to do.

By delegating their acquisition, cultivation and digital fundraising efforts to BDI, the top 8 had more time to spend doing what their internal teams do best – building strong relationships with their donors and within their communities.

Seven of the top 8 organizations in BDI’s study had at least one full-time Major Gift Officer (MGO). This staff member often helped secure additional revenue streams, contributing to the $1.2 million additional revenue growth the top 8 had above individual giving, through:

• Matching campaigns
• Donor-advised funds
• Legacy/estate gifts
• Corporate gifts
• Tax credits
• Events
• Grants

The top 8 organizations also shared a focus on growing their capacity to build and strengthen relationships with major donors over time. The top 8 averaged two MGOs, and 4 of the top 8 grew to anywhere from three to five MGOs on their teams by the end of the study.

Diversifying revenue streams with the help of an MGO – and relying on the strategic guidance of an agency partner – becomes a critical hedge against economic downturn and crises that impact giving.

Commonality #2: Matching Campaigns

Likely as a result of their MGOs’ work in building relationships with major donors, 6 of the top 8 organizations secured generous gifts to use in Matching Campaigns during 2021.

In the study’s final year…

• 11 of the top 15 organizations had at least 2 Matching Campaigns.
• 5 of the top 15 had 3 Matching Campaigns.

A Matching Challenge is a powerful strategy to engage both your regular donors (who feel like they are needed more than ever) and major donors (who provide the challenge gift that inspires others’ generosity).

Commonality #3: Max Cultivation

The top 8 organizations’ strong development investments was reflected in their willingness to max their direct mail cultivation appeals.  

On average, the top 8 annually mailed 21 cultivation appeals.  This confirmed their nonprofit was consistently in front of their donor audience providing opportunities to give.

No surprise that more opportunities to give led to more opportunities to grow revenue!

Beyond Year 5: Will the growth continue?

As the “COVID bump” to charitable giving continues to wane across many nonprofit sectors, you may be wondering if the organizations in BDI’s 5-year study have stayed on top.

In 2022 and beyond, these organizations are continuing to benefit from the lift in revenue they experienced during the study. 

Even amid record-level inflation and a national decline in giving since the pandemic, it is an accomplishment that 3 of the top 8 have continued their growth even after the study, with revenue reaching above BDI’s benchmarks.

This should be an encouragement to organizations who have been surprised by declines in giving following the “COVID bump.” With the right strategies in place, you can continue to grow even during a challenging year and experience opportunities for greater impact. 

For the top 8, more than dollars raised, their overall success is measured in increasing numbers of lives healed and lives saved in cities across the country, as a result of their courage and commitment to growth.