It seems a little strange for a secondary donor to give to an org with the objective of increasing their funding diversity if the idea is this is good because it increases stability. If the org’s primary donor collapses, the secondary donor could fund them regardless of whether or not they had in the past.
This is not a fully convincing counterargument, as it could still be reassuring to the staff of the org that they have a credible signal of security, and it encourages the secondary donor to do due diligence ahead of time.
Separately, I think it would be useful to think about the magnitudes here. Suppose you are a small org that gets 90% of your funding from one donor. For what $X are you indifferent between an incremental $100 from your primary donor and $X from a new secondary donor?
It seems a little strange for a secondary donor to give to an org with the objective of increasing their funding diversity if the idea is this is good because it increases stability. If the org’s primary donor collapses, the secondary donor could fund them regardless of whether or not they had in the past.
This is not a fully convincing counterargument, as it could still be reassuring to the staff of the org that they have a credible signal of security, and it encourages the secondary donor to do due diligence ahead of time.
Separately, I think it would be useful to think about the magnitudes here. Suppose you are a small org that gets 90% of your funding from one donor. For what $X are you indifferent between an incremental $100 from your primary donor and $X from a new secondary donor?