The Concentration Line

3-minute read

We’re tracking to budget for our contributions goal this year. The variance isn't too low or too high. Just enough to feel good.

But here’s the catch: over the last 24 months, more than 50% of our contributed revenue has come from just 10 donors.

Both statements are true, but a typical board report usually includes only one.

That’s the issue. When revenue grows, it can hide the risks behind it.

If you want your board to pay attention to diversification, add this one line to your next board deck:

That’s all you need. This number says more than any presentation about diversification ever could.

Being ahead of goal looks different when you consider concentration. Performance doesn’t change when you show both numbers together, but the board sees things from a new angle.

Big gifts aren’t the problem

I want more big funders. If someone is ready to give $5 million, that's amazing and let's put that generosity to work making an impact.

The real issue is what’s behind the gift. If one funder makes up 20% of your contributed revenue, what happens if their strategy changes? If your five biggest corporate partners are all in the same industry, what if that industry takes a hit? If a few foundations are fueling most of your growth, what if one of them gets new leadership?

You might have a great fundraising year and still become more vulnerable. A simple goal-versus-actual report won’t reveal that.

Why diversification keeps losing

Diversifying takes time and often competes with the push to hit this year’s goal. New donor channels, individual giving, unrestricted revenue, a new corporate offer, or a relationship that won’t pay off for 18 months—all of these require patience.

Meanwhile, the current $2 million funder is right in front of us. So we focus more on where the money already comes from. That can work really well—until it doesn’t.

The Concentration Line

It’s the same concentration risk as before, but now it’s directed at your board instead of just your own pipeline.

Your board needs to see your exposure.

Once it does, the conversation shifts from “why aren’t we raising more” to “how much concentration risk are we taking on while we build new revenue sources?”

That’s a real strategy discussion: should you invest in a channel that takes two years to grow, should board members help open new doors, or should you protect some capacity from this year’s targets?

At your next board meeting, skip the six slides about diversification strategy. Just add one line to the slide they’re already viewing, and show the same number for the past two years. If both revenue and that percentage are rising, it’s time for a real discussion.

Your Turn

Before Friday, decide if you’ll present your concentration number as a warning sign or as proof you’ve already factored it into your growth plan. Write the one sentence you’ll use to introduce it, and add it to your board deck ahead of the meeting.

Coming Next Week

Next Sunday, I’ll kick off a new series: Donor Objections at Chief Fundraiser Altitude. We’ll talk about common objections that come up in every portfolio and examine them from our point of view.

First up: "We Already Give Elsewhere." This isn’t about convincing someone otherwise. Instead, we’ll explore what this objection really tells us about donor priorities and where you fit in their portfolio.

Until next Sunday,
Christine

PS - Want to run this number before your next board meeting? Reply DEPENDENCY and I’ll send you the Dependency Test worksheet. It’s one page: pull your top-10 share in 15 minutes, a forward test on your current forecast, the board-deck line ready to fill in, and a sentence for your CEO on which part of your forecast is proven.

If you know a CDO whose board hasn’t seen their concentration number, send this to them. It could be the number that changes their next board meeting.

I’m Christine Bork, Chief Development Officer at the American Academy of Pediatrics.

I write CFW to share what I’m learning as I lead a growing team and try to do the work in a way that’s sustainable and thoughtful.

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