Low-end Donors Matter, Too

April 5, 2005

By Paul Barbagallo

Senior Editor

FundRaising Success

It's well known that 80 percent of your donors account for 20 percent of your overall annual fundraising. But in 2003, that small-dollar 20 percent crowd anted up more than $48 billion, according to Giving USA statistics.

Diane M. Carlson, chairman of Nevada-based nonprofit consultancy IDC Corp., advised conference attendees Sunday to delve deeper into their "modest-donor pool," learn more about their giving behaviors and, most importantly, listen.

Unfortunately, donors of all income levels often are perceived as having the same giving propensity and behaviorial patterns, but that some are just more well off than others. But the motivations and characteristics of major donors differ greatly from those of low-end donors, and it would behoove fundraisers to understand the stark contrasts.

For starters, Carlson identifies the most common traits of major donors: committed to the mission of the organization; have long-term donor loyalty; need regular personal cultivation, either through telephone correspondence or face-to-face solicitation; are motivated by tax considerations; want to know who else is giving; are motivated by donor recognition; and are vastly more interested in restricting their gifts.

Lower-dollar donors, however, couldn't care less about the latter. Carlson says small-dollar donors understand that their unrestricted modest gifts, coupled with other donors' unrestricted modest gifts, make a real, attributable difference to the organization they're supporting.

Other characteristics include wanting to support a "cause," contributing to seven to ten different nonprofit organizations annually, and having little or no interest in deducting their gifts come tax time.

What's more, low-dollar donors, according to Carlson, want more opportunities to give than high-dollar donors. Carlson suggests affording the little guys an option to give their gifts in installments of four or five payments to increase the likelihood of receiving a higher annual donation and to improve long-term retention. Also, consider removing the $25 level from your ask string and start with the highest gift and then work down, which for many nonprofits' low-dollar appeals is $500.

"Twenty-five dollars is just too low a gift today," Carlson says.

One other trait that separates major donors and small donors is the draw of annual-fund and specialized appeals. Based on IDC client-organization campaign results, low-dollar donors tend to respond better when solicited with a targeted, urgent appeal.&003;

Carlson advises organizations to present a compellingly fresh case for support, including what precisely you're raising money for and, in turn, what problems will arise or persist if you don't raise the needed amount. One of the reasons low-dollar donors lapse is uninspired, repetitive cases for support, most notably in the form of a stale direct-mail appeal letter.

"They may be tired of you," Carlson says. "If it's the same old appeal, chances are you might lose their support."

It's important, too, to remember that these are donors who represent a lower income bracket, and have less disposable cash and perhaps more giving priorities than the average major donor. But Carlson suggests to track donors citing financial situations, either through telephone communciations or direct-mail solicitations.

Is it an elderly woman who's just been relocated to a retirement community, or has your multi-year donor and mother of two given birth again? These are issues to track and gauge the long-term severity of, Carlson says.

And while it's crucial to effectively communicate, educate, thank and recognize low-dollar donors, if you treat them like real people, they'll become real friends.

"Today there are roughly one million nonprofit organizations vying for donors' attention, and if you fail to make a connection, you may lose them," Carlson says. "They are not just names on a list or part of a database. They're like you and me, and they want to be treated appropriately."

For more information about IDC, call 702.450.1000.