Maximizing Middle Donors

What’s a middle donor?  And how do we market to them?  How are they different from the rest of our donors?

I’ve been answering these questions a lot lately.  At conferences, in person and even on LinkedIn.  Seems a lot of organizations are starting to take notice of the potential of middle donors.  This is great news!

Middle donors are those highly valuable supporters who give more than most of your donors, but not enough to get them noticed by your major gift staff.

Many organizations that I work with set a floor for major gifts of $10,000 (either single largest contribution, or cumulative within a calendar year).  They also set a floor for middle donors, typically at $500.  The middle donor range for these organizations, therefore, is $500 – $9,999.99.

That range makes sense for a lot of organizations, but not all.  You should set those ranges for your organization based on your donors and your available staff resources.  If the largest gift you’ve ever received is $1,000, then that’s where your major donor floor should begin.  You can set a goal of increasing that to $5,000, $10,000, etc., over time too.  But for now, live within your current reality.  Alternately, if you are routinely securing $25,000+ gifts, then it might make more sense to use $25,000 as your major gift floor.

Interestingly, this middle donor segment (regardless of the dollar range it represents) is an often overlooked portion of your donor file.  And for (mostly) good reason.  Annual giving programs focus on the masses.  Direct mail, online giving, special events, telemarketing, social media, etc.  These are all built on a one-to-many platform.   Annual giving staff are not trained, for the most part, to cultivate individual donor relationships with high potential donors.  Many aren’t even comfortable with a role like that.

When a donor starts behaving like a middle donor by increasing her giving, she straddles the fence between the annual giving program and your major gifts program.  Maybe she just sent a $3,500 check in response to a very compelling article in your newsletter.  That’s a big gift.  But not nearly significant enough (without additional research) to assign to your major gift staff.  They need to be out cultivating five and six-figure gifts.

Your donor is clearly giving more than the average supporter on your file.  After a cursory database search, you find that you’ve got somewhere between 900 – 1,200 donors who have similar giving patterns.  Their giving increases over time.  Maybe they started out with a $50 gift to your acquisition mailing or an $80 online gift.  And over the last 6-9 months they’ve increased that, and are now giving $500+ gifts regularly.

Unfortunately, what happens in many organizations is that annual giving staff (or even executive directors / board members) make a decision to pull these donors out of the regular communication stream.  But because they don’t rise to the level necessary to warrant major gift staff attention, they don’t begin receiving personal cultivation either.

Ultimately, many of these donors lapse, costing nonprofits millions of dollars every year.

You know you need to do something to cultivate these donors differently, but what?

The answer is, you build a hybrid program that combines a lot of the strategies and tactics used in your annual giving program with significantly increased personalization and segment-level cultivation efforts.  This isn’t a one-to-one strategy, but more of a one-to-few strategy.

Implement these changes for a successful middle donor strategy:

High touch mail program
Middle donor direct mail is markedly different from your regular direct mail program (the following are true for your solicitations as well as newsletters).  The underlying principles are the same, but the execution varies significantly.

You’ll want to use closed face envelopes instead of a window envelope.  First Class postage (on the outer envelope and reply envelope) is a best practice here as well.  Middle donor letters tend to be longer than regular donor letters, providing more details and going deeper into the stories of lives changed.  You’ll want to test different formats.  Instead of mailing everything in a #10 envelope, you should test a Monarch package, 6×9 or even 9×12 formats.  The latter are especially good for conducting a mini-campaign (we’ll get to that shortly).  Another hallmark of middle donor mail is true handwriting.  Putting blue, handwritten ink on paper has a huge impact on conversion with this audience.  Lastly, contrary to what you’ve been told about asking for specific amounts, this is one audience where leaving the amount up to them can benefit your organization.  Instead of giving them pre-set gift amounts based on their gift history, simply give them an open ask amount that they can fill in.  When I’ve tested this or seen it tested in the past, it consistently produces higher response rates and average gifts.

High touch e-mail program
Similar to the high touch mail program, your e-mail efforts to this audience should be unique as well.  This might include a more formal skin to your e-mails, a special monthly update from your CEO or Board Chair, and a set of landing pages unique to your middle donors (though this could be a version of your major donor landing pages, if you’ve created those).

Phone-based middle donor representatives
The amount of revenue middle donors can contribute to your organization is probably significant.  But it may not be enough to warrant a staff of full-time individual donor officers.  What some organizations have very successfully tested in recent years is the addition of phone-based middle donor representatives.  In most cases that I’m familiar with, these people are retired (former major gift officers, pastors, successful consultative sales people) who are open to part-time working arrangements.  This makes sense for the reps and for the nonprofit because it keeps costs down as well.

In this model, a portfolio of donors is assigned to each rep for ongoing phone cultivation and solicitation.  It is different from a major gift program in that the goal is to close gifts via phone instead of seeking face-to-face appointments.  Typically, the middle donor rep will call to follow up on a specific marketing initiative (either a mail campaign, an e-mail, or a multi-channel effort) to answer any questions the donor might have and to confirm the donor’s intention regarding that specific project.  These calls also provide a great opportunity for your organization to capture more information about each donor.  In conversation, your rep might pick up on the fact that a particular donor has just joined the board of XYZ corporation, just sold a business, etc.  This information should be fed back to your prospect research team to help you identify those middle donors with capacity to give more significant (i.e., major) gifts.

Custom cultivation and solicitation events
When it comes to events, you don’t have to go crazy.  Invite middle donors to all of your existing events – if you have at least a few, you probably don’t even need to create new ones.  However, do something special for these donors.  Ask a few board members to host a special pre or post-event cocktail party or mixer of some sort.  Customize invitations for this group to reflect their importance to your organization.

If you do want to create an event specifically for middle donors, keep it low key.  They aren’t necessarily the black tie gala types.  Consider a series of house parties at the homes of board members or influential volunteers.  Build these as networking events where donors can get to know one another, make business and family connections, and deepen their relationship with the organization.

Mini-campaigns and stretch offers
Middle donors respond very well to mini-campaigns and stretch offers.  When I say mini-campaigns, what I mean by that is a tangible approach that offers multiple giving options within a specific project or area.  If you are a homeless shelter, you might build a mini-campaign around your kitchen / dining facility remodel.  Middle donors could have the option of funding the purchase of new stoves, refrigerators, tables, chairs, etc., as well as the opportunity to cover the cost of meals for a month (or 3 months, etc.).  These are specific and tangible, but they are larger than asking for a gift to care for one person.  The price points will stretch your middle donors to be as generous as they are able.

With a campaign like this, you’ll also want to take an integrated approach.  This would combine direct mail, e-mail, a specific online landing page (maybe even video), and your middle donor phone reps making outbound calls (or taking inbound calls via the 800# printed on your letters).  The integrated approach will increase overall response rates and should deliver high average gifts as well.

Real-time data analysis
For a program like this to work, you’ve got to have some degree of sophistication with your database.  In a best case scenario you’d have alerts set up so that when one of these middle donors makes a contribution (via any channel), their phone rep receives an e-mail noting the date, amount, channel and specific campaign the gift came in response to.  That way she can get on the phone and thank that donor personally (in addition to your standard thank you process).  The system should also have triggers built in to help you identify middle donors who have a pattern of increasing giving over time (you’ll want to forward these people to your prospect research staff for additional analysis and potentially assignment to major gift staff).

A word on frequency of communication/solicitation…
I know what you’re thinking.  “Gosh, this sounds like a lot of asks.  Aren’t we going to burn these donors out?”  In a word…NO.

Donor fatigue is real, but the fear of donor fatigue is exponentially larger than the reality.  Very few organizations lose donors because they ask too much.  Those that do fail to combine the right amount of feedback, stewardship and other communications with their solicitations.  If all you ever do is ask, then yes, you’re asking too much.  But don’t think you have to reduce the frequency of solicitations based on a donor’s gift amount.

The one time to disregard what I’ve just said is when the donor tells you that you’re asking too frequently.  At that point, change the frequency for that specific donor.  Not for all donors.

If you make the changes outlined above, you will raise more money from your middle donors.  You’ll build deeper, more meaningful relationships with people who will continue giving (and increasing their giving) to your organization.  Retention rates will go up for this segment, and you will easily begin to identify potential major donors as well.

Has your organization done something like this already?  Tell us about it!