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.