Thanks for posting this — I came to similar conclusions during a recent strategy sprint for a small org transitioning off major-donor dependence.
One thing I tried to push further was: how can small orgs actually operationalize this tradeoff? A few concrete ideas that might help others:
Run small experiments early — not just to test donor conversion, but to triage which sources are worth pursuing at all. You might find several are cost-efficient, in which case diversification isn’t so costly. Quick tests: EA Forum post, alumni fundraising email to 100–300 people, etc. Adjust cost per dollar numbers by e.g. ~2x to account for later optimising those campaigns.
Track time and money per funding source to estimate true cost-per-dollar raised. Even rough numbers help focus efforts—there likely are large differences so that even +/-50% estimates are useful.
Use a CRM from the start — not just to keep future potential donors “warm,” but to track the full funnel: outreach, engagement, follow-ups, and conversion. This helps spot bottlenecks and build institutional memory.
Consider raising a buffer instead of diversifying to mitigate funding concentration risk. If you’ve run experiments and know your cost-per-dollar-raised, this buffer becomes a smart, quantifiable hedge — and potentially easy to justify to funders as a cost-effective funding strategy (might make multi-year, overall cost-per-dollar-raised the lowest).
The time cost and frustration of diversification can quietly sink a sub-$1M org. But the reverse mistake — assuming it’s too expensive without testing — is also risky. Fast, lightweight experiments + clear tracking feels like a powerful combo.
Happy to compare notes if others are working through this.
Thanks for posting this — I came to similar conclusions during a recent strategy sprint for a small org transitioning off major-donor dependence.
One thing I tried to push further was: how can small orgs actually operationalize this tradeoff? A few concrete ideas that might help others:
Run small experiments early — not just to test donor conversion, but to triage which sources are worth pursuing at all. You might find several are cost-efficient, in which case diversification isn’t so costly. Quick tests: EA Forum post, alumni fundraising email to 100–300 people, etc. Adjust cost per dollar numbers by e.g. ~2x to account for later optimising those campaigns.
Track time and money per funding source to estimate true cost-per-dollar raised. Even rough numbers help focus efforts—there likely are large differences so that even +/-50% estimates are useful.
Use a CRM from the start — not just to keep future potential donors “warm,” but to track the full funnel: outreach, engagement, follow-ups, and conversion. This helps spot bottlenecks and build institutional memory.
Consider raising a buffer instead of diversifying to mitigate funding concentration risk. If you’ve run experiments and know your cost-per-dollar-raised, this buffer becomes a smart, quantifiable hedge — and potentially easy to justify to funders as a cost-effective funding strategy (might make multi-year, overall cost-per-dollar-raised the lowest).
The time cost and frustration of diversification can quietly sink a sub-$1M org. But the reverse mistake — assuming it’s too expensive without testing — is also risky. Fast, lightweight experiments + clear tracking feels like a powerful combo.
Happy to compare notes if others are working through this.