97/3: Pareto’s Rule on Steroids (for Fundraising)
Funding | | Nick Fellers
Pareto’s Rule is the 80/20 rule. It states that 80% of the output comes from 20% of the causes. Pareto’s Rule is usually used to reference work (or output), e.g., 80% of the work is done by 20% of the team.
In the fundraising world we see Pareto’s Rule on steroids: 97% of the funds come from 3% of your prospects. This is axiomatic… it doesn’t matter if you’re a large university or a small start-up. The ratio almost always holds.
When I share this with groups, I’m always challenged. “What about NPR? What about The Salvation Army?”
My answer: JOAN KROC!!!
Joan Kroc left $200M to NPR and $1.5 BILLION to The Salvation Army!!!
We’ve studied the ratio for years… sometimes it’s 95/5 or 99/1, but the universal model of philanthropy holds true (for organizations that consistently advance impact!).
Are you focusing your time, your energy, your effort on the 97% that gives 3%? Or, are you focusing your time/energy/effort on the 3% that can generate 97% of the funds needed to help change, save, and impact lives.
N.B.: None of this is to disparage the 97%. This simply requires that we take a hard look at the math and then make decisions about where to focus.