It is only in the past three years that middle donors have really been targeted in Australasia. Here Fiona McPhee and Ruthann Richardson explore the benefits of, and what’s involved in, building this significant group.
Middle donors should be viewed as a central part of an organisation’s lifetime value efforts. Middle donors will be retained and upgraded far more than smaller donors and far more than major donors. They represent the most significant block of money, commitment and loyalty. US fundraising consultant/ industry commentator Roger Craver.
Over the past few years, there has been an increase in interest in mid-value fundraising. Blogs, conferences and webinars are focusing on it. And rightly so as there is much to be gained from putting a focused strategy in place to increase the engagement, retention and value of this targeted group of donors.
Together, Ruthann Richardson and I have spent the past two years researching, analysing and working on the development and execution of mid-value programs with charities in Australia and New Zealand.
(We argued about how long we have been working on these programs as many of the high-value donor programs we have run or assisted with over the past 10 years bear It is only in the past three years that middle donors have really been targeted in Australasia. Here Fiona McPhee and Ruthann Richardson explore the benefits of, and what’s involved in, building this significant group. some resemblance to the more recently branded mid-value donor programs. However, formal strategies around mid-value donors have only come to the fore in the past three years in Australia and New Zealand.)
The purpose of developing a mid-value donor program? To raise more income by cultivating and nurturing strong ties and deeper relationships. These programs should bridge the gap between our high-touch major donor programs (one-to-one) and our mass fundraising programs (one-to-many). By adjusting strategies and investment priorities to bridge the gap you can create a one-tosome program that drives these stronger relationships and better longer-term value.
The first step in developing a mid-value donor program is in identifying who your mid-value donors are. This will be different for every organisation – both in volume and value. Your chosen strategy, capacity and budget may well dictate the volume of donors you can service via your mid-value program initially, so the criteria you select may need to be tightened, but we hope success would allow you to expand over time.
When looking to identify who could fall into this group for you, there are a number of things to consider:
• Look at the largest gifts made; not those cumulative over a time period The behaviours of those who give larger single gifts versus those who give multiple gifts to reach the same value are different and for a mid-value program we recommend focusing first on those with larger single gifts. Once your program is established and working, if capacity allows for research (and here we mean speaking with/listening to your donors and analysing their behaviours) and/ or testing into specifically targeted segments of donors whose cumulative giving is higher than the norm, this can be part of your plan. (Ruthann suggests looking at donors whose cumulative giving in a year is high and talking to them to assess the difference in their behaviours from the beginning.)
• Focus initially on individuals You may selectively include organisations/businesses over time but, realistically, these programs are designed to develop relationships with individuals and are more easily managed, in the first instance, without making a raft of adjustments to meet te different needs of businesses and organisations. (Ruthann recommends exploring organisation records when you know the decisions are being made by individuals who are simply choosing to give through their businesses.)
• What about regular givers who are giving large amounts every month? This is where analysis and judgement needs to come in. Regular givers who also make larger cash donations are worth considering. The needs and behaviours of higher value regular givers are often different to those of a ‘classic’ mid-value donor. Again, research and testing are critical with this audience. Consider developing a mid-value regular giving program that addresses the specific needs and opportunities presented by people who are already regular givers.
• What feels right in terms of value for your organisation? In Australia and New Zealand we tend to start our exploration with donors who give $1,000 or more (in a single gift) up to where an organisation’s major gift program starts (for those without major gift programs a mid-value program is a nice way to get started towards this). If you don’t have any or many donors up at $1,000 then start at $500 or $250.
• Like any other giving program, recency is critical If you have a selection of donors who haven’t given in the last 24 months there would need to be strong case-bycase reasons to include them in your midvalue program. (I think you should go back 36 months but Ruthann recommends 24 months. We disagree because of the differences in programs we have worked on, so critical analysis and judgement will help make this call.)
• Are you going to consider longevity of giving in your criteria for this group? Donors who have been giving to you for longer are likely to be more engaged. Do they have different perceptions of your work? Are you able to use analysis to understand their potential giving motivations better than new donors? Giving longevity will be likely to affect how you segment your mid-value donors.
Cultivating the group
Once you have determined the criteria for your program, the biggest challenge is in understanding how to cultivate this group – those exceptional donors who are giving at the very top end of your mass fundraising channels but who don’t quite make it into your major donor program.
(Often we encounter some crossover between the major donor prospecting criteria and the newly developed mid-value donor criteria. Savvy major donor fundraisers have seen the benefit of the nurturing and cultivation mid-value programs offer but be prepared to engage your major donor colleagues and plan together.)
It is important in your mid-value program to focus on the donor. The more their motivations and needs are used to tailor the experience the more successful the program. Getting the right balance between cultivation and solicitation is key, as is finding the balance between high touch human interaction and mass fundraising.
Anyone hoping you can simply ‘program in’ a mid-value donor program should probably stop reading here. Human interaction is important. Not all mid-value donors will ask for it and many will say they don’t need it, but without it you will simply be applying more tactics to a mass program, which will only get you so far.
Aim to create a sense of exclusivity, access and special status. Mid-value donor content should be richer – even more sophisticated than that developed for the broader base. Letters and emails (if they are an appropriate channel for your audience) should be meaty and substantive – think more cultivation than solicitation. Spend at least as much time stewarding your mid-value donors as you do asking them.
We have seen and helped build a variety of models that work for great mid-value programs, and each has been a unique outcome of the motivations of the midvalue donors, the tangible and specific proposition(s) developed, the organisations’ available human capital and expertise, the elevation of elements of the mass fundraising program, and special cultivation and solicitation activity designed for the mid-value donors.
Tactics for this group are different from a standard donor program – lots can be learned from testing as well as the experiences from other mid-value and major gift programs. There is no one-size-fits-all approach here.
Your objectives will drive your strategy. A slow burn approach might focus on increasing retention and therefore value over time, a more focused push will look to dramatically increase the short-term value of giving with a keen eye on retention. Often capacity and budget dictate which of these two routes are selected.
You will need a budget. It’s the classic ‘spend more to make more’ but it works. You might be spending more on specialist staff or more on your appeal execution or on special cultivation activities for the audience. Can you do this with no additional budget? If you can divert resources and juggle budgets to spend less in other areas then, yes, but plan to be successful and spend more as you expand and develop the program. Plan to stick with it – this is not a one-shot campaign or throwing in a couple of thank you calls.
At the most basic level, look to complement your mailings with phone calls, custom cultivation and solicitation activity, and stretch campaigns. Ensure you keep a consistent narrative across all channels. Pay attention to how donors respond and what they say to you. Good cultivation means paying attention to the donors’ preferred channels, level of interaction and interest areas and, importantly, capturing and using the insights as they are gained. The best programs have a vision, test and refine, and use human beings as a critical resource.
This article was first published in Fundraising and Philanthropy Magazine 2017