An Underserved Audience: Understanding Your Midlevel Donors

At the most recent AFP International Conference, Sea Change Strategies presented its latest excellent study on midlevel donors (supporters contributing between $1,000 and $10,000) – The Missing Middle: Part Four. To categorize their report as eye opening is an understatement. Frequently, fundraisers treat midlevel donors either as a prospect pool for major gifts or as ATMs who will dispense their annual gift when solicited.

This shortsighted approach overlooks the significant lifetime value of a loyal group of supporters who can provide up to 30% of contributed revenue. As many nonprofits attempt to navigate declines in donors, retention rates, and in some cases average gifts, this study refocuses our sights on the steadiness in support from midlevel donors. While The Missing Middle: Part Four is not an exhaustive donor study, it provides sufficient data and insights to influence fundraiser strategies.

Key Characteristics Uncovered

Several of the demographic traits of the 5,900 donors in the study are not surprising. The participating midlevel donors are predominately affluent, (net worth of $1M+) highly educated white women in their 60s.  This data underscores once again that nonprofit organizations must do better in diversifying their donor base to remain sustainable and relevant to their communities.

One of the most interesting statistics is that 42% of these donors have been involved with the organization they support since young adulthood (20-39) with 52% involved for more than 10 years. Clearly, enlisting donors as young adults and adopting donor-centric strategies significantly increases the lifetime value of our midlevel donors.

Few Are Major Gift Prospects…But

We frequently discuss an organization’s donor pipeline and view midlevel donors as our future major donors.  This survey partially questions that assumption with only 10% of surveyed donors expressing an intent to increase their giving and only 13% having made a gift of $10,000 or more.

However, other data points to the real value of maintaining and deepening relationships with your midlevel donors. 31% have made a bequest to their participating organization and 23% say they plan to make one later.  In other words, 54% of this group are planned giving donors and prospects!  This underscores the critical importance of having an active planned giving program and looking beyond major donors as prospects.

This report found that the average age of those “planning” to make a bequest is 67 and the average age of those thinking about it is 56. One of the basic principles of planned giving holds true for this group of donors – the presence or absence of children/grandchildren is a key driver in consideration and action.

ACM frequently conducts predictive modeling for its clients across active donor households.  Our results affirm the finding in this study. It’s not unusual for us to uncover small longstanding donors who are strong planned giving prospects with six-figure capability.

The impact of the loyalty of your midlevel should not overlooked.  89% of the surveyed donors are “very likely” to renew their gifts to the participating organizations and 87% are very favorable toward their organization.  Of course, intent does not always translate to giving but the organizations who participate in the study reported multi-year retention rates of approximately 65%.

What Influences Midlevel Donors

78% of donors surveyed in this report research an organizations before contributing. Your website is the single most important source of information for midlevel donors. This reinforces why your site must be easy to navigate, provide engaging (and concise) content, offer user-friendly donation pages, allow for a streamlined giving process and be mobile optimized.  The second most popular research tool is charity watchdog sites.

Four factors are the most important for donors in deciding which organizations to support – values alignment, personal relevance, trustworthiness and a simple donation process.  Building trust is an essential assignment for nonprofits with only 52% of American stating they trust nonprofits per an Independent Sector Report.  In fact, trust in nonprofits has continued to slide.

Although only 10% of midlevel donors would consider making a gift of greater than $10,000, upgrading your low midlevel donors is a real opportunity to grow your contributed revenue.  Three factors motivate those donors to consider making a larger gift – efficiency, impact and lasting change. Notably 60% of the surveyed donors said an excellent rating on a charity watchdog review site has a “major impact” on their decision to make a larger donation.

Takeaways

• • Communicate strategically and directly with midlevel donors while simultaneously building relationships with younger donors.
  • Midlevel giving is the destination of choice for most of your midlevel donors. Therefore, retaining them and securing bequests and/or IRA distributions (along with DAF gifts) should be your primary aim
  • Segment your midlevel donors as much as possible. Understand their frequency and preferred method of communication and the area/program that motivates their giving. Create donor journeys based on the information you uncover.  ACM frequently builds donor journeys for its clients to deepen donor relationships, enhance retention and increase giving.
  • Planned giving must be a core part of your development program.
  • Make your website user-friendly for information gathering and seamless contributions

  ACM provides best-in-class fundraising consulting with customized solutions and strategies to clients in the creative industries. Contact Peter Hansen to find out more.