January can be a great month to gain a new perspective on the things we do every day.

One of those areas can be in the area of time management. There are so many time management techniques that it can be confusing. Often simplicity is the best!

One of the simplest ways of organizing our time is using the Pareto Principle.

The Pareto Principle

Vilfredo Pareto was an economist in Italy around the turn of the century. One of his greatest legacies to us was his finding that 80% of the land in Italy was owned by 20% of the population. This became known as the Pareto Principle, also known as the 80/20 Rule.

It’s simply amazing how true this is in life. Think about this:

  • In your closet: I bet you wear 20% of the clothes 80% of the time.
  • At work: 20% of the work on your desk usually produces 80% of the results.
  • And with your time: 80% of your results come from 20% of the effort.

If it’s true with time, think about this: if we work a 10 hour day, 2 hours of that day produces 80% of the day’s results! The rest of the day, the other 8 hours, only produces 20% of the results.

Those 8 hours seem quite a waste of time, don’t they?

The trick is to figure out what makes up the 20% and focus on that. If you’re really bold, you can try to eliminate the other 80% of the work that only produces 20% of the results. Those are time wasters.

Pareto & Fundraising

Doesn’t this apply to fundraising? Doesn’t it seem that 80% of the money comes from 20% of the donors? (If you’re in a capital campaign, the ratio is even more drastic. Often 95% of the money comes from 5% of the donors.)

We all know that, on a moral level, every human being is important. We need to keep reminding ourselves that. Because on a practical level, with the limited resources of our nonprofits, we’re required to focus our effort where the results are most likely to come.

While our boards understand raising money by direct mail, for many of us, that only yields 20% of the results. To best serve our organizations, we’ll want to focus some time on major giving prospects. After all, they produce 80% of the donations.

What about you?

What would happen if you spent the next couple of weeks becoming aware of which tasks seem to produce the greatest results?

Of course, in order to do this, you’ll have to know what results you’re looking for.

Are you evaluated on how much money you raise each year? Are you also tracking how many donors you retain year-to-year? Or are you expected to grow the donor base?

It takes a lot more money and effort to get a person to give the first gift to an organization than it does to get a repeat donor to give again.

If you have all these goals, you might need to figure out what the “20%” activities are for each goal.

Then you have to do those 20%. Creating the list can be fun. Executing the list can be transformational for you and for your organization!

Posted on 21 January 2010

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