Useful Truths: Apply With Care

At first, it worked like magic. Average gift skyrocketed. Campaign performance broke records right and left. Continuation and upgrade rates were off
the charts.

It was like that for a few months. Then Sweetness & Light’s revenue went into sudden decline. The decline came from two sources:

* The total number of donors had plummeted. Between the lower number of new donors and the wholesale shedding of $20-or-less donors (which happened because the organization stopped talking to them), the donor file was decimated. This drop in volume more than offset the increase in value.
* More surprisingly, the pool of major donors was drying up. This seems to fly in the face of knowledge and common sense, but here’s how it happened: As the file shrank, the number of potential upgraders became much too small. (Remember that tiny percentage of low-end donors who actually follow the donor pyramid?) While the percentage of donors who upgraded was superb, it was a percentage of a smaller number — leading to an overall drop in major donors.