The "Up and Out" Fallacy

I’ve heard the explanation so many times now that I’m sick of it. It goes something like this: “When our direct-mail donors give more than $1,000 in a single year, we move them out of the regular mail program and over to the upper-level or even the major-donor program. They deserve special treatment.”

The dollar threshold might be different from organization to organization, but the underlying thinking is the same: Once donors reach a certain giving level, they need to be “protected” from the regular direct-mail appeal program.

Unfortunately, the organization soon finds that revenue from these significant donors — who are now being “protected” — plummets. Moving direct-mail donors up and out of the program that acquired and nurtured them in their giving is a serious mistake. It reduces revenue and eventually causes the donor to question whether the organization values her participation.

So what should a fundraising manager do when a donor gives a significant, cumulative amount in a given year? Here are some ideas gleaned from my experience and that of my colleagues.

Identify significant donors
It’s true that some donors will percolate up from the masses and give much, much more. This is a good thing, and your fundraising program should encourage this type of upgrading. (By the way, it’s easier to upgrade giving by increasing a donor’s frequency of giving than by increasing his average gift.)

Fundraisers should set a line of demarcation that separates these larger donors from everyone else. For some smaller organizations, this threshold might be as low as $500 in annual cumulative giving. For larger groups, it might be $1,000 or even $5,000. Once a donor reaches your crossover point, adjust the communication stream, but don’t decrease contact.

Effective communication strategies
What you communicate and how frequently depends on your organization’s mission. Groups involved in meeting urgent human needs, such as homelessness, hunger, child welfare and international humanitarian issues, will mail much more frequently than universities or arts groups. What’s important is that you provide effective communications that nurture your relationship with donors and affirm their giving behavior.

If you effectively can communicate your message four or five times a year, then mail four or five times a year. More likely, your financial needs and your mission will require much more frequent communication with donors.

Those donors who’ve moved above your demarcation line need as much communication and as frequent contact as everyone else. Just because a donor now is giving more doesn’t mean he or she wants less contact with you. On the contrary, an increased level of giving often signals a desire for more dialogue and more participation.Rather than decreasing the number of communication efforts, consider substituting or even adding a special report or donor-affirmation mailing. A progress report or a special thank-you letter unrelated to a specific gift will build your donor’s loyalty without harming your revenue stream.

You also might want to ask each of your staff colleagues to call five to 10 of these upper-level donors twice during the year, once on the anniversary of their first gift to your organization and again during the holiday year-end period.

Above all, keep asking for financial support. Each year, these important donors should receive a blend of communications that ask for support, thank them for their gifts, report how their gifts are being used, and provide opportunities for participation such as volunteering and advocacy.

Give donors control
As with all donors, but especially those making large contributions, give choices and allow donors to control the relationship. This especially is important for baby boomer donors who’ve exercised choice and control their entire lives.

Ask your upper-level and major donors if they want to receive special reports or e-mail newsletters. Ask their opinions on issues and topics related to your organization’s mission. If you’re a local or regional organization invite these important donors to visit and tour your facility.

Personal representatives
One simple step to secure long-term relationships with significant donors is to assign a personal representative to each donor.

On every mail piece you send these valuable donors, include the name, telephone number and e-mail address of one of your staff members. You’ll be signaling how much you appreciate, respect and value your donors, and you’ll remind them that you want to maintain a dialogue with them.

Keep mailing
Remember, just because donors give a significant amount doesn’t mean you should protect them from the appeal packages that
motivated their enhanced giving. Keep mailing.

Tim Burgess is co-founder and senior strategist at Merkle|Domain. Contact: tim.burgess@thedomaingroup.com.