Industry-wide, nonprofit organizations are investing in mid-level programs to generate more revenue. This attention to mid-level is critical to the overall success of any fundraising program. And you may already have many hidden gems in your current direct marketing database.
Why is focusing on mid-level and upgrading so important?
- Renewal rates are declining industry-wide – but upgrades are increasing.
- A direct mail donor may prefer to remain a direct mail donor. Even if they have the capacity to give like a major donor, they may prefer to do so through the mail. You should be prepared to meet your donor with the giving channel preferences they express.
- If you don’t ask, you don’t get.
- A person who gives $500 or $1,000 through the mail usually has the capacity to give a lot more.
An important point to remember is that the greatest indicator of giving is not necessarily the capacity to give, it is the interest in your mission. A response to direct mail, no matter how little, is a demonstration of interest. How you steward that interest is key to earning the big reward. If you don’t already have a mid-level program in place, the first step to zeroing in on your mid-level group would be to look at $100+ donors over the last four years and examine year-over-year performance. Once you identify a group of donors that stand out as your core mid-level group, you can target them using different mailings, emails, messaging, or techniques. There are different ways to identify this group, but a good rule of thumb is to look at a giving level 4x-5x your current average mail gift and then to take a second look at where some of your higher-donor giving levels tend to form clusters.
We have developed and tested different packages that specifically target mid-level and upgrade donors. Two successes are:
- CHALLENGE MATCHES. This appeals to mid and major donors, asking them to give to create a collective matching gift to motivate smaller donors to give more. We ask the current cohort to provide a match to incentivize other donors and use the match during year-end or as a special online offer. This is very tangible and motivating.
- MINI PROPOSAL. This is a great way to introduce donors to a specific investment you are making to improve services or programming. A goal is set, as well as parameters of the project, and a pyramid of giving is presented, so donors can see directly the impact they would have. These can be written to solicit restricted or unrestricted funding.
There are also many modeling tools you can use for upgrading donors. These can be used to find donors to add to your mid-level pool or to upgrade donors from a lower dollar mid-level to a higher dollar mid-level donor. Modeling opportunities include:
- PREDICTIVE DONATION MODELING. Beyond response modeling that can be used in acquisition, other models can use hard donation data, or attributes to predict donations, to enable us to ask for more when soliciting a donor. Instead of using previous gift history, we will combine previous gift history to other charities and/or predictive giving estimates based on our model’s output.
- CLUSTER ANALYSIS. When we carry out a data audit, we see clusters of giving that will enable us to determine to what level we should target for upgrading, as well as determine giving circles that make sense proportionate to where your donors lie. A base, for example, that has primarily $10-99 donors and very few $100-199 donors is not ready for a giving circle that begins at $250. They can, however, be targeted to upgrade to $100 or $150 with specialized language or even back-end premiums.
You can also employ many techniques throughout all communications to drive upgrades to mid and major giving including:
- GIVING CIRCLES. If you don’t already have one, you should launch and market a Giving Circle program to upgrade giving as well as create new, deeper relationships with your donors. Your giving circles should be marketing via the following channels:
- Website: The donation page should list membership benefits and encourage donors to sign up.
- Acknowledgments: Update letter and/or include an insert to add member benefits.
- Newsletters: Benefits should be listed on the newsletter component.
- Direct Mail: List benefits on the back of the reply device.
- Dedicate one mail campaign to inviting donors to the program.
- Create dedicated collateral to share with donors.
Additionally, don’t forget to share with the donors the many various ways they can give; it is no longer just about a straight cash donation. There are many ways for donors to increase giving without writing a check. Some of the most common options include:
- DONOR–ADVISED FUND (DAF) GIVING. Many donors who give through DAFs will fall into your mid-level or major donor pool. You can encourage DAF gifts by adding language to existing direct mail solicitations and installing a widget on your website that directs donors to DAFDirect. Moreover, if you receive a smaller donation from a DAF, this is a prime opportunity to ask for an upgrade. Given the minimum funding levels required by DAFs, these donors tend to have a higher capacity to give.
- QUALIFIED CHARITABLE DISTRIBUTIONS (QCD) Giving. Another important source of gifts from mid-level donors is a QCD. Even with changing rules around distribution requirements, donors are still actively using this tool to support their favored charities.
Using all of the above techniques, you can expect to see significant increases in revenues from your mid-level audience. For one client, we were able to increase renewal by 42%. For another, we saw an increase in average gift of 47%, and for a third, we were able to launch a new year-end digital program that had average gifts of over $500. Keep an eye out on our website next week, where we’ll be sharing case studies using some of these examples and more!
To learn more about how to see these amazing results for your organization, Reach out to Faircom New York’s Vice President of Integrated Marketing at firstname.lastname@example.org. – we’ll be happy to discuss how to find the mid-level gems hidden in your mail file!