Focusing on mid-level giving is key to success in today’s fundraising environment.
- Renewal rates are declining industry-wide — but upgrades are increasing.
- An individual who gives $500 or $1,000 through the mail — which is seven to ten times greater than the average gift by mail to most nonprofits — typically has the capacity to give a lot more.
- Mid-level giving can be a valuable bridge through increased personalization and engagement to a fully managed major donor relationship for those with even higher capacity.
An important point to remember is that the greatest indicator of giving is not necessarily the capacity to give, it is the interest in a nonprofit’s mission. A response to direct mail, no matter how little, is already a demonstration of interest — and it is then up to us as fundraising professionals to cultivate that interest to generate a long-lasting, valuable relationship.
Mid-level donor programs are an essential tool to building those relationships, through a mix of marketing initiatives and light-touch personalization with a program relationship manager.
Faircom New York is an Innovator in Mid-Level Marketing
In mail and later digital marketing for years, nonprofit organizations separated their donor audiences into smaller annual fund donors and major donors. While major donors had a highly personalized experience through a direct relationship manager, organizations sought to upgrade annual fund donors primarily through things like personalized gift streams that relied upon recent gift history to determine the appropriate ask. Those groups who were slightly ahead of the curve may have segmented their mid-level donor group by arbitrarily designating segments by dollar amount with giving circles to encourage those donors to give more.
At Faircom New York, we started to examine this pool through a different lens. In particular, appreciating that nonprofit resources can be scarce and that we want to maximize the revenues available for the valuable implementation of mission-based programs, we sought to minimizing extra marketing expenses while leveraging the most substantial pay-off.
- Finding critically large enough donor segments giving at a level ripe for significant upgrading, or cluster analysis.
- Offering multiple opportunities to the selected donors to become distinguished by an eventual upgrade.
For organizations capable of making a further investment into understanding their database, we have also been able to augment our analysis of opportunities and strategy recommendations with Data Services & Scoring.
Targeting Strategies from Cluster Analysis
Cluster analysis is a great tool because you should, ideally, already have the data at your fingertips. The review is based upon existing donor history, not any external data sources, to understand where your greatest opportunities are for upgrade.
For example, consider two scenarios:
- Organization A has very few donors giving at the $1,000 or higher level, but many donors giving at $50 or less. They also have a significant group of donors emerging just above that range at $100 or more. While the mid-point of their audience may literally be $500, we would be better served to cluster mid-level benefits starting at the $100 and $250 range to incentivize upgrade.
- Organization B has a robust database spread across all donor level, but donors at $500 and below never seem to break that ceiling. Donors at the $5,000 and above level are classified as major donors, benefiting from relationships with major gift officers who build a highly personalized experience for them. The gulf between the $500 and $5,000 level is waiting to be maximized — a tool to help those lower-level donors leapfrog above $500 gifts and potentially bridge to future major gifts.
In short, we analyze our clients’ data to find the sweet spot in which we think we can sustainably, economically, and successfully push donors up the giving pyramid. Having identified the group to be targeted, the next consideration is which strategy (or strategies) to use to achieve the greatest ROI.
Building Opportunities to Upgrade Mid-Level Donors
There is no one magic bullet program to drive donors to upgrade their giving significantly. While your donors are all unified in their love of and loyalty to your mission, it is highly unlikely that they will all respond in the same way to being asked to give — or especially being asked to increase their giving substantially.
However, we have consistently found the efficacy of two strategies to incentivize mid-level upgrades through marketing initiatives:
With the existing cohort of mid-level and possibly major donors, we collect a group matching gift that can be used to motivate lower-level donors to give more. This match is typically used during year-end or as a special online offer — and making the ask to current higher-dollar donors to contribute to the match is also very tangible and motivating, particularly when you report back on the increased giving they helped drive.
These packages are a great way to introduce and drive investment from donors to a specific service or program. A goal and parameters of the project are set, presented alongside a pyramid of gifts that allows donors can see the impact they would have. These can be written to solicit restricted or unrestricted funding.
Beyond these types of asks and packages, we also use a variety of data modeling and communications tools throughout the implementation of a mid-level marketing program to increase its impact, including:
We utilize models built on hard donation data or attributes to predict donations. This enables us to ask for more when soliciting a donor. Instead of limiting ourselves to previous gift history to your organization, we will combine previous gift history to other charities and/or predictive giving estimates based on our model’s output.
Giving circles that aren’t based on close consideration of donor clusters and data for targeting may be ineffective, but they can be incredibly powerful with that added insight. In addition to driving upgrades, they also provide a helpful framework for cultivation and stewardship to create new, deeper relationships with donors. In building any giving circle, we construct a strategy with a tailored case for support and messaging for that audience — giving them a unique identity, so that donors will feel like part of a community. In addition, we may include:
- A mission-tied name for the group and all sub-levels, rather than falling back to generic levels like gold, silver, or bronze.
- Membership benefits like branded swag, targeted publications, or special event invitations.
- Branded acknowledgements and other specially designed packages.
Certain methods of giving may generally lead to higher gifts, given that the donors utilizing these methods tend to have higher wealth and capacity to give. These include:
Donor-Advised Funds (DAFs), which can lead to gifts that are ten times higher than a cash gift from the same donor. We encourage DAF giving by adding language to existing direct mail solicitations, including those targeted at mid-level donors, and encouraging our clients to install a widget on their giving page that directs donors to DAFDirect.
Qualified Charitable Distributions (QCDs). For those donors who do not need the required distribution from their IRA, the opportunity to donate it, avoid paying taxes, and deduct the total amount from other taxable income is very welcome. This is an excellent way to upgrade donors over the age of 70.5.
Mid-Level Programs to Introduce Managed Relationships
A successful mid-level donor program should have a designated point of contact for donors, and this person will also be responsible for the overall program management and implementation of benefits. But having this individual in place also brings additional value if you plan strategically, and Faircom New York can ensure that you make the most of this role.
targeted mid-level marketing materials, your donors are already beginning to enjoy a more personalized experience with your organization. By making your program even more robust with a dedicated mid-level donor manager, it is also possible to begin introducing these donors to a more fully-managed relationship — a kind of light version of what your major donors may experience.
A mid-level program manager can oversee many more donors than a typical major gifts officer because the overall level of tailoring and personalization is still reduced. So, while you would not want to assign greater than 150 donors to a major gifts officer, your mid-level program manager could oversee 600 to 700 donors.
To facilitate the greatest success for this role and the program overall, Faircom New York can also:
- Establish systems and guidelines for program qualification and benefits roll-out, including scheduling checkpoints for new donor qualification.
- Set up mid-level cultivation calendars for added donor personalization that can be overlaid on the broader marketing calendar, with additional support or guidelines to populate those calendars.
- Produce any additional collateral needed for managing the personalized experience, including scripts, template donor reporting documents, and more.
- Develop a pipeline health review index to help determine if and when mid-level donors are referred on for major gift qualification.
- Create a framework for moves management between the mid-level and major donor programs, to ensure that your donor’s journey is seamless.