The 80/20 Rule

The 80/20 Rule
How 100-year-old science can help you raise more money.

If you’ve ever taken an economics or statistics class or had more than 3 conversations with me,  you’ve likely heard of the 80/20 rule or the Law of the Critical Few. This simple rule states that, in many different systems and events, roughly 80% of results come from 20% of the effort.

This concept was first identified by the Italian economist, Vilfredo Federico Damaso Pareto. I call him Fredo for short. In 1906 Fredo made the observation that in Italy, 80% of the property was owned by 20% of the population. About 50 years later, Joseph M. Juran, found that the same ratio applied to quality issues in his work as a management consultant.  To help explain it to clients and other observers he gave it the tagline of “the vital few, and trivial many.”  This moniker rubbed a few (about 20%) people the wrong way and he softened it to the “law of the vital few, and the useful many.”

Since Fredo first uncovered the concept, the 80/20 rule has been proved useful in a wide variety of disciplines from business and software development to sports and management consulting.

Business
80% of a company’s profits come from 20% of its customers.
80% of a company’s sales are made by 20% of its sales staff.

Sports
80% of big competitions include 20% of athletes.
80% of the awards are won by 20% of sportsmen identified above.

Software Development
80% of the load testing traffic occurs during 20% of the time period.
80% of the errors come from 20% of the code.

In my own life, I’ve found the 80/20 rule to be both true and helpful when it comes to navigating the post-information age.

80% of useful information comes from 20% of conversations.
80% of energy providing social encounters comes from 20% of my acquaintances.

At this point, you may be asking yourself, “Self, while I’m glad Fredo was so crafty and observant, how is all of this going to help me raise more money for my PAC?”

Well, I’m glad you asked.  As you may have already guessed, the 80/20 rule applies to fundraising and political advocacy as well.

80% (or more) of the PAC dollars come from 20% (or less) of association members.
80% of activism comes from 20% of members.

I’ve been performing data analysis on voter and campaign finance files for over 15 years and time after time the 80/20 rule proves itself true.  However, while other industries and disciplines have adjusted production, marketing, and strategy to account for the 80/20 rule, most government affairs shops have not.  Most associations have a utilitarian approach to fundraising and activism, treating all their members equally. Emails to “write your Senatore” or participate in a fundraiser go out to all members.  Additionally, there are too many members to connect with on a personal level. As it relates political activism in most associations, all of the above can be boiled down to this. 

80% (likely more) of your members don’t care about politics and never will.  Leave them alone!

My experience has repeatedly shown that individuals are involved or not involved in politics for a variety of personal and deeply-held beliefs.  These beliefs will not be changed by an elegant looking invitation, a well-worded email or a silent auction.  Rather than try to convince all your members to participate at some level, the more likely path to success lies in focusing on getting some of your members involved at a very high level.

80% of you PAC fundraising budget should be focused on 20% of your members.
80% of government affairs staff time should be spent on 20% of your activists.
80% of lobbying efforts should be focused on 20% of legislators.

In order to meet the demands and ever-changing political landscape of a post-term limits era, government affairs shops need to be both more flexible and more strategic.  The 80/20 rule provides a simple and more importantly actionable framework for your fundraising and outreach efforts.

What would Fredo think of your political and government affairs efforts?

By | 2017-02-28T18:12:48+00:00 February 12th, 2017|Fundraising, Organizational Development|0 Comments