How do I find my dependency quotient?<\/h2>\n\n\n\n
This is an easy calculation! Find the total amount your top 3-5 fundraisers donate, then divide it by your organization\u2019s total expenditures.<\/p>\n\n\n\n
Annual donations from top donors \/ Total annual expenditures = Dependency quotient<\/h3>\n\n\n\n
So, if my organization\u2019s top 4 donors give ~$350,000 annually and my expenditures are ~$1 million annually, my dependency quotient is 35%.<\/p>\n\n\n\n
Why do I need to understand my dependency quotient?<\/h2>\n\n\n\n
Understanding your dependency quotient is so useful! It\u2019ll help you plan expenditures, understand strengths and weaknesses, prioritize fundraising efforts, and more.<\/p>\n\n\n\n
Here\u2019s how.<\/p>\n\n\n\n
We\u2019ve already established that my organization\u2019s dependency quotient is 35%. If my top 4 donors stop giving, my nonprofit will have to make up 35% of our budget. That\u2019s a lot!<\/p>\n\n\n\n
With that dependency quotient, I\u2019d focus our efforts on diversifying our donor base. We\u2019d look into attracting more donors, upgrading existing donors, and building a base of recurring donors. We would also, of course, spend time reinforcing our relationships with our major donors.<\/p>\n\n\n\n
The goal of all of this would be to drive down our dependency quotient. The higher the dependency quotient, the more heavily you rely on your major donors\u2026 and the harder you\u2019ll have to work to make up for lost revenue if you lose them.<\/p>\n\n\n\n
So now what do I do?<\/h2>\n\n\n\n
Once you understand your dependency quotient, you\u2019ll have a good idea of how to proceed.<\/p>\n\n\n\n
Do you have a high dependency quotient?<\/h3>\n\n\n\n
It\u2019s time to start diversifying! The #1 way to do that is to attract new donors and solidify relationships with new ones. But, to do that, you need to understand what motivates them to be involved with you at all!\u00a0Here are some helpful strategies<\/a>\u00a0you can use to get a grasp on what messages resonate with both future and existing donors.<\/p>\n\n\n\n Good for you! This means you aren\u2019t relying too heavily on your major donors and have a varied, active donor base. You\u2019ve also got plenty of room to build relationships with existing major donors or cultivate new ones.\u00a0This blog article<\/a>\u00a0breaks down how to find new potential major donors and cultivate relationships with existing ones.<\/p>\n\n\n\n Regardless of your dependency quotient, you\u2019ll always want to stay close to your major donors and work on finding new ones. But you needn\u2019t do so alone! Believe it or not, your board members may be a huge, untapped asset in the major gifts fundraising process.\u00a0Take a peek at this article<\/a>\u00a0to figure out why.<\/p>\n\n\n\n High dependency quotient or not, it\u2019s always a good idea to focus on improving and streamlining your fundraising. Retaining donors is financially more efficient than finding new ones, and long-engaged donors are much more likely to become major donors in the future. If you\u2019re interested in learning more about donor retention,\u00a0sign up for this email series<\/a>\u00a0we put together about donor retention methods and strategies.<\/p>\n\n\n\n It\u2019s very valuable to focus on metrics like donor retention, the amount you spend on fundraising efforts vs. what you bring in, and other important data points (like these\u00a08 stats you should definitely track<\/a>). But your dependency quotient is an important number to know! Understanding your dependency quotient will guide you as you decide how to target your fundraising efforts and build relationships with your donors.<\/p>\n\n\nDo you have a low dependency quotient?<\/h3>\n\n\n\n
Do you want to build better relationships with your major donors?<\/h3>\n\n\n\n
Do you want to focus on improving your overall fundraising?<\/h3>\n\n\n\n
Conclusion<\/h2>\n\n\n\n
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