Low Hanging Fruit

Recently, the GiveWell blog looked at how individuals are by far the biggest philanthropists in the United States. Total annual giving from foundations pales in comparison to donations by individuals. Depending on how you slice it, well over 80% of giving comes from individuals.

This fact was a driving force behind the creation of the philanthropic services platform at my firm Ensemble Capital Management. The way that the chart shown on the GiveWell site is designed, “individuals” and “bequests” become proxies for “non-institutions”. However, they are actually just “non-structured” giving. With donor advised funds, private foundations and charitable remainder trusts (a potential replacement vehicle for bequests) becoming available to smaller and smaller donors, I believe we’ll see a huge decrease in “individual” giving as defined by the statisticians. But we’ll actually being seeing a rapid increase in the use of sophisticated giving techniques by individual donors.

This doesn’t just matter to me (as an advisor to these donors) it matters to the whole field of philanthropy and by extension to the social sector because these “non-institutional” donors are our field’s “low hanging fruit.” Recently marketing guru Seth Godin commented on the magic of low hanging fruit:

Imagine that half the cars in the US get 10 miles per gallon. And half get 40 miles per gallon. Further stipulate that all cars are driven the same number of miles per year.

Now, you get one wish. You can give every low-mileage car a new set of spark plugs that will increase fuel efficiency by 5 mpg, up to 15. Or you can replace every 40 mpg car with a car that gets 75 mpg, an increase of 35 miles for every gallon driven.

Which is better?

It turns out that the 5 mpg increase is far better for overall mileage than the 35 mpg increase, even though it’s smaller both as a percentage and absolutely. That’s because the 10 mpg hogs use up so much gas. They’re the low-hanging fruit, not just easy to fix, but worth fixing.

As marketers, we’re tempted to tweak the already tweaked, to turn the 100 to 101, to optimize for the peak performances. That long tail is very long, though, and if there’s a way you can raise the floor (instead of just focusing on the ceiling) you may be surprised to discover that it can have a huge impact.

I love to try to “tweak the already tweaked, to turn the 100 to 101, to optimize for the peak performances.” But frankly I think that philanthropy is such a deeply inefficient market that we can make great headway as a field by simply working on the basics.


  1. Sean wrote:

    “…we can make great headway as a field by simply working on the basics.”

    By George, he’s got it!!!! Now, did you mean basic “basic” or philanthropcapitalism-type “basic”?

    I vote for the former! 😉

    Renata Rafferty

  2. What’s the difference between basic “basic” and philanthrocapitalism-type “basic”? I’m not trying to be smart or suggest there’s no difference, I just think that everyone is using different definitions of philanthrocapitalism.

    So seriously, what’s the difference?

  3. Basic “basic” is REALLY basic — for example:

    DON’T respond to telephone, e-mail and snail mail solicitations from organizations about which you know nothing

    DON’T assume you have no right to input, or feedback, on the use of your donation

    DON’T assume that 990s or charity rating websites have all (or any) of the answers to the questions you should be asking before giving

    DON’T just give it away 😉

    DO think about what specific change you wish to make in your community or your world

    DO explore various organizations that are working to make that change happen

    DO actively evaluate whether this is an organization to which you will trust both your money and your hope for change

    DO leverage that gift in any of the multiple ways available to you to do so

    By “Philanthrocapitalism” basic, I’m referring to those ideas, principles, and actions that require an understanding and concern for the global ramifications of social cause and effect, from which stem systems or methodologies of giving/leading that seek to harness the forces, strengths, experiences, and leaders of the free marketplace and aye, the free world.

    By basic-basic, I’m talking about getting most people to simply be more thought-full (and not just feeling-full) about their charitable giving … the vast majority of donors just are not there yet).

    The more advanced-basic practically requires a degree (or at least an interest) in economics, business, sociology, psychology, and or “philanthropy.”

    Don’t know if I can get any more basic in distinguishing between these two levels of “basic”!

  4. The Combined Federal Campaign (CFC) and “Low Hanging Fruit”

    Sean, Thanks for the reference to Seth Godin’s blog, where he talks about the magic of “low-hanging fruit,” namely don’t miss out on the “easy pickings” while developing your latest, complicated multi-pronged, strategy.

    One of my key beliefs about the market is that it always over-reacts, (in both directions) and is very likely to be driven by a herd mentality. That’s why some of the best analysts and strategic thinkers choose to live somewhere other than NY (e.g. Nebraska (Buffet, Islands – Sir John Templeton (recently deceased).

    As part of this herd mentality, it aslo likely to jump on the latest bandwagon (bubble), while ignoring some pretty basic, reliable actors. In the manufacturing world, you get an interesting insight when you look at companies that are more than 100 years old, and are the dominant player (if not the only one) in their industry. Ball Mason Jars is one example, and I believe that most metal paper clips are also from one such company.

    In the non-profit sector there is a tremendous opportunity to benefit from the “low-hanging” fruit of the Combined Federal Campaign (CFC), which has been around for 40 years, just chugging along, generating more unrestricted revenue than any other single entity in the non-profit sector.

    In terms of actual giving, if the CFC were a foundation, it would be the 10th largest foundation in the USA.

    The CFC is the Federal government’s workplace giving program, and it is the largest and most successful workplace giving program in the world. Through the CFC, Federal public servants give more than $250 million every year to thousands of local, national and international non-profits.

    CFC Benefits

    The CFC is first and foremost a vehicle for non-profit fundraising, and there are many other benefits to including it as one of the tools in your non-profit’s “Toolbox.” These benefits include:

    ● Generates a reliable, twelve month income stream of unrestricted revenue.
    ● More leverage and less risk than any other means of fund-raising.
    ● Leadership Development – organizing, planning, managing, etc.
    ● Public Speaking
    ● Market Research about your non-profit.
    ● Development of multiple year income streams.
    ● Increase of public awareness of your non-profit.

    Where the “low-hanging” fruit comparison comes in is that all of these benefits are generated by approximately 32% of the Federal workforce. With some attention to “basics,” and a little effort it is possible to increase this participation rate to at least 50%, if not 60%. This could double the amount raised to $500 million annually.

    What basics? How about saying “Thank you?”

    The non-profit sector does a lousy job of saying “Thank you” to all the people who make the CFC successful.

    There are three categories of people who deserve a “thank you” and in general, the CFC non-profits only thank one category – the identified donor.

    The two other categories that deserve a thank you are the “anonymous donors” – this is a very popular feature for CFC donors, and the fundraising volunteers who plan, organize, manage and conduct the CFC campaigns each year. And yes, in the latter two categories the non-profit will not have the list of individual names, but it still possible to thank people in the following ways:

    ● On your website
    ● In your printed material (annual reports, special event programs, newsletters (electronic or print).
    ● In person at special events – “Thank Yous” from the Chair of the Event.


    Bill Huddleston, CFC Expert
    Blog: http://www.cfctreasures.wordpress.com