Fundraising models look an awful lot like private sector business models. And looking at the up- and downsides of these approaches could inform our fundraising.
Take Walmart. Walmart’s model is high volume, low profit margin. They may only make a penny or two on everything they sell, but they sell a ginormous amount of stuff. That means they are under constant pressure to “feed the beast” by coming up with endless supplies of cheap stuff to sell and endless supplies of customers.
Low dollar direct mail is a variant of the Walmart model.
Nordstrom’s is low volume, high profit margin. They are more selective about their wares and sell far fewer items, but they make a heck of a lot more on each sale. Nordstrom’s caters to a much smaller population than Walmart, obviously, but the profit margin on $200 jeans more than makes up for that.
Mid-level giving is more akin to the Nordstrom’s model.
Both models are legitimate approaches, but have different strategic rules, different target audiences and different metrics of success. Problems arise when your CEO demands Walmart sales volume and Nordstrom’s profit margins. Does that ever happen to you?