Are You Missing Your Mid-Level Opportunities?
As a fundraising agency, we like to turn over every stone to find out where our nonprofit clients are missing potential opportunities for gifts. Increasingly, we’re finding that for many organizations mid-level giving lies under one of the bigger stones. They’re losing some of their best donors through benign neglect and bottlenecking their major gifts pipeline in the process.
A mid-level program can help transform your fundraising. It’s your organization’s bridge between annual and major giving levels. It allows donors to step up their financial investment and interest in your organization, creating a loyal and growing donor file with year-over-year revenue growth.
Having a mid-level strategy can be a significant step up the ladder to major gifts. It allows you to identify and appropriately steward donors who have shown more interest and/or capacity than the norm. A gift of $250 or $500 may be a way of “testing the waters” to see how receptive your organization is to higher gifts. Or it may be a stretch gift from a donor with a particular passion for your cause. Either way, it’s worth showing a little extra love to that donor who may continue to give at this level, or perhaps even higher.
A mid-level program provides important opportunities to reduce attrition and increase giving from this important group of supporters. So why do so few nonprofits invest in their mid-level donors? The answer we hear so often is that it can be daunting to consider devoting the resources when they are strapped for staffing and budget already.
That’s when quantifying the “Lost Opportunity” is key. How much revenue is at stake with this group? How much is leaking out of the cracks in your stewardship plan?
A file audit is a great way to look at a wholistic view of your program. It will point out barriers in giving levels that donors are not crossing. Where are the holes in the giving level continuum? Is there a bulge of donors at $100, and a smaller bulge at $1,000, with very few in between? Many organizations have lots of donors loyally giving $100 or $120 year after year, creating a big bottleneck that doesn’t move.
In the spirit of “You get what you ask for”— Is there nothing asked for in that mid-level range between $100 and $999? Having a mid-level destination point to promote will impel a certain portion of your donors to go there, simply by showing them what you want or expect from them.
If you do have some donors in that midlevel range already, what is their retention rate compared to donors above and below? If it’s lower, how much revenue is being lost each year from this group, through downgrades and attrition?
Run some calculations. Then share those numbers with decision-makers who can open the door to making an appropriate investment of resources to preserve and grow this revenue stream.
Here’s an example from a recent file audit for one of our clients: Organization A has 1,907 donors giving $250-$499 with a retention rate of 50%. If they could increase that retention rate by another 10%, they would retain 190 more donors. At an average of $272 per calendar year per donor, the added gross revenue would be $51,785. Giving $500-$999, they have 414 donors with a retention rate of 61%. If they can retain 10% more donors at that level, they will retain 41 more donors, with an average calendar-year revenue of $469, resulting in an additional $19,362 in gross revenue. That’s a total of $71,147 in added gross revenue from this mid-level group in just one year.
The next question, of course, is how much investment needs to be made to achieve this improvement in retention. That answer can vary and increase over time as the retention and upgrades increase. But it can start out small.
Mid-level donors can remain in your general direct response plan. Your goal should be to add communications that let the donor know that his/her support is making a real difference. Maybe that’s an extra phone call from a volunteer or staffer, a personal email, or a handwritten note. Here are some simple, low-cost ideas for getting started with a mid-level stewardship plan.
Establishing personal contact with these donors will also help to identify which ones are prospects for deeper engagement and higher giving levels. These are the ones to pass along to the Major Gifts officers for research and follow-up.
Create a mid-level program that targets the giving levels that will help propel the individual donor forward while at the same time providing increased annual revenue. Turn over those stones to identify the areas of opportunity that are specific to your program. Then take away those stones and plow that field! You’ll be amazed at the yield.