The Under-Tapped Mid-Level

 

Nonprofit organizations around the world have a variety of giving programs – mostly focused on major gifts and mid-level donations – but these still leave money on the table.

With the recent downturn in overall revenue and donor retention, it may be time to consider increasing focus on mid-level donors and creating a minor-donor fundraising program.

A new study on giving in the first quarter of 2018 by the Fundraising Effectiveness Project, a collaboration between the Association of Fundraising Professionals and the Urban Institute, reports that overall revenue is down 2.4% and that donor retention rate has dropped 4.6% compared with the first quarter of 2017. The Project also notes that major gifts ($1,000 and above) have dipped 5.2% while mid-level donations ($250 to $1,000) declined 2.1%. However, donations of less than $250 from individuals rose 3.7%.

“Smaller donors are an afterthought, relegated to getting our annual appeal letter, an invitation to purchase tickets to our spring gala, and if they are lucky, a newsletter or two throughout the year,” writes Joe Garecht in Should You Create a Minor Donor Fundraising Program? “But – and it’s a big but – for many nonprofits, smaller donors make up 10%–50% of their individual giving revenue.”

Garecht suggests taking a moment to run a database report to see what percentage of your organization’s revenue over the past three years has come from minor donors and then considering what would happen if you could increase this group’s donations by 10% every year. He adds, “Perhaps this year is the right time for your nonprofit to launch a minor-donor program.”

In his article, Garecht recommends setting up a cultivation system for small-dollar donors to make them feel like part of your team. Perks could include light-touch items like free bumper stickers, e-mail newsletters and invitations to an annual non-ask “Thank You” event, providing lots of communication and relationship-building without taking a lot of resources.

The Under-Tapped Mid-Level

A report by Sea Change Strategies says that while, in 2014, leadership commitment to mid-level fundraising was the exception, not the norm, some nonprofits have re-entered the market or launched programs targeting the mid-level donors in the last few years.

One example cited in the report is the World Wildlife Fund, which restructured and relaunched its program four years ago. “We knew very little about our mid-level supporters, what they wanted in a program, why they gave at this level and how they wanted to be treated so we embarked on a research program and asked them directly,” said Andrew Wiley, Annual Giving Manager, Partners in Conservation at the WWF. “The whole point of this is to engage people in a more meaningful way – to show that each individual donor is an important person among the many hundreds of thousands of members at WWF.”

The study also asserts that donors who typically give gifts of $1,000 to $25,000 annually may represent only about 2% of a charity’s donors, as in the case, of Best Friends Animal Society, but they account for 30% of gifts to its annual fund.

The report, Missing Middle Part 2 – 2018: Middle Donors: What’s New? What’s Not? What’s Next? also indicates that CEO involvement is a much needed next step to provide adequate resources to connect, and continue to connect, with mid-level donors.