Why Small Gifts Matter
How the Collective Pooling of Resources Makes a Greater Impact
In our last blog, we busted the myth that “small gifts don’t matter,” along with several other myths about philanthropy. This time, we will delve deeper into why this particular myth is so erroneous. In practice, nonprofits are heavily reliant upon small gifts.
Being open to small donations gives a nonprofit access to a large collection of people invested in their mission, and this collective pooling of resources leads to greater impact. Many nonprofits would rather have 100 people donate $1 than one person donate $100, because it equates to 99 more people who they can potentially call upon for support in a time of need. This $100 donor is still impeccably valuable, however, donors oftentimes believe that if they are not giving substantial amounts they are not important. Instead, nonprofits view ALL donors as integral to their success for a variety of reasons, no matter the size of their gift.
Support can come in many non-monetary forms as well, such as volunteer time, in-kind support, and raising awareness of a cause. 100 people can accomplish more by working in unison than one person can accomplish on their own – the foundation of all economic productivity, be it for-profit or charity.
Another reason that small gifts matter is that for the individual, it may be more attainable. More people have the financial ability to make small contributions than large ones. This is true for people who want to make both one-time and recurring contributions. A monthly donation of only $20 quickly becomes $240 in a year. We all indulge in small things on a regular basis, such as a $20 indulgence in one month. Nonprofits simply benefit from when these small gifts are redirected for their benefit.
A nonprofit’s revenue stream is healthiest when it’s structured like a pyramid, with the majority of its weight concentrated at the base, or in small donations, recurring, and annual giving. In other words, a nonprofit’s revenue stream should be comprised mostly of a large quantity of small donors. If the shape of the pyramid were to be inverted, with the heaviest part being comprised of a small quantity of major funders at the top, then the nonprofit would be susceptible to failure if one of these donors decided to ‘descend’ their donations. However, if this pyramid is formed properly with smaller donors at the base, the distribution is spread among a larger group, removing reliance on single donor decisions. Nonprofits should look at the total number of people who are invested in their mission as a sign of their overall health. The importance of this pyramid structure reveals itself in how charitable organizations market themselves, gearing their campaigns towards small donors.
At Social Venture Partners Arizona, we rely on a similar strategy of collective pooling. The over $4.3 million dollars that we’ve donated since our formation has been made possible through the individual gifts of each of our Partners coming together as one, as have the 35,000 consultation-hours that we’ve provided. We have been able to make this impact due to the generosity of individuals who believe in our mission, and who believe that when they unite with others that have similar missions and visions, their impact can be even greater.
SVPAZ Board Chair, Ed Zito agrees, saying, “Sharing SVPAZ Partner time & talent with pooled financial resources is extremely impactful to our mission of making children successful.”
Here at SVPAZ, we take those respective impacts, those respective donations, and we collectively pool them to leverage our Partners’ dollars for their greatest impact.
What does this all mean?
YOUR donation, whatever the size, makes a huge difference to the nonprofit of your choice. For the price of your morning coffee an organization can have another supporter at the base of their pyramid – empowering them to move their mission even further.
A great opportunity for you to make your gift is to participate in Arizona Gives Day, April 7th, 2020! Arizona Gives Day is an annual 24-hour virtual giving movement that unites nonprofits across the state. In 2019, a total of $3.6 million was raised for 653 organizations, with an average donation size of $142.
This year, Social Venture Partners will be participating for our first time!
“At this critical time of working together,” Ed Zito adds, “we are especially encouraged to be participating in such a fantastic event, and we would appreciate your help to further our mission.”
Visit our page today to contribute any amount you please, or to learn more!
Together, we can all move the Arizona non-profit community forward.