How To Improve Your Donor Upgradation Strategy

November 26, 2018

As we enter the final quarter of 2018, many of us fundraisers are focussed on our year-end fundraising campaign. Rightfully so. With 30% of annual giving occurring in December and 10% of annual giving taking place in the last 3 days of the year, these are some of the best revenue generating opportunities a fundraiser has.

But I encourage you to take a step back for the moment and examine your entire strategy for the year. Specifically, I want to examine your approach to upgrading your donors, or rather, your donor upgradation strategy.

Because all of that money coming in at year-end isn’t because your donors are likely giving you more. It’s because they haven’t given at all this year (or in a few years) and they’re simply renewing their gifts.

Let’s back up for a moment.

Why Donor Upgradation is a Metric that Matters

Donor upgradation (and I had to confirm this in the dictionary, but yes, upgradation is indeed a word) is a metric that looks at the percentage of donors who were active last year and gave more this year. An active donor last year can only do four things this year:

  • Not give at all
  • Give less than they did the year before (downgrade)
  • Give the same
  • Give more than they did last year (upgrade)

This metric is one that provides insight into your ask and upgrade strategies.

graph graph

The overall benchmark for upgradation is 25%. If you’re not upgrading at least 25% of your donors each year, you need to pay a bit more attention.

How Do You Upgrade?

The simplest upgrade strategy is to ask donors for more money when you’re asking them to renew in the first half of the year.

All your ask strings should start at a gift that is higher than the last one they made to you. For a donor who gave $50, it might look like this:

⃝    $100 (last gift x 2)    ⃝    $75 (last gift x 1.5)    ⃝    $60 (last gift x 1.25)    ⃝    $50 (last gift)    ⃝    Other:

Or like this:

⃝    $65 (last gift x 1.25)    ⃝    $75 (last gift x 1.5)    ⃝    $100 (last gift x 2)    ⃝    Other:

This strategy is grounded in the concept of anchoring, which comes from behavioural economics. It employs the psychological principle that humans will automatically anchor our decision-making to the first number we see.

You’ll want to think about how to weave suggested gift amounts into your copy and test out a descending vs. ascending gift matrix on a reply device or donation form when devising your upgrade strategies. Semi-designated or restricted asks are also effective components of an upgrade strategy.

You’ll also want to consider which segments are most primed and receptive to upgrade asks (think active, loyal, once-per-year, mid-level and monthly donors) and not just apply this to your whole file.

Upgrading Donors at Year-End

The focus for the last half of the year, and particularly the last quarter, should be on renewing as many donors as possible. Not upgradation. You need to keep folks from lapsing in the first place.  Because let’s face it, donor attrition is a huge problem for most of us.

That great revenue bump at year-end? That comes from donors who like to give at this time of year AND from folks you’re renewing and reactivating AND from donors you’re getting to give again in the same year. It doesn’t typically come from a smaller pool of donors that you’ve renewed with a larger gift.

Caveat: take this with a grain of salt if you’re an organization with a solid holiday campaign (think some community hospitals) where donors typically make their one and only annual gift at this time of year. If this is the case, you may want to look at upgradation. There are data insights we can use to help us determine who should get an upgrade ask and who should not.

And that’s your primer on upgradation – why it matters and how to incorporate it into your annual giving strategy!

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Holly Wagg

Holly Wagg

Fundraiser. Connector. Photographer. Adventurer. Extroverted-introvert. Digital architect. Change agent. Mother. Architect of random projects.