The Keys to Setting Donor Levels (and Why You May Need to Rethink Them)

I think most of us can say we’ve been on both sides of the ask.

Personally, I’ve been on the inside, wracking my brain for a creative way to convince a potential donor why he should give to my NPO. And I’ve also been asked many times, both as a decision maker in a company and on a personal level, to give to a worthy cause.

So if you’re like me, you’ve seen all sides of the ask and you know how it can be perceived from different vantage points. This alone gives you an advantage in determining the right way to solicit donations. I want to talk about an important factor that’s sometimes overlooked but makes a big difference in how you position your ask most effectively, whether you’re working with individual or corporate donors: Donor levels.

Donor levels can make or break a donation, and they’re something we need to seriously consider. Too many organizations are not strategic when it comes to setting donor levels, and as a result, they miss out on key donations.

Let’s start here: When it comes to donor levels, there is a difference between the personal ask and the company ask.

Individual donors give for completely different reasons than companies do, so it’s important to determine why you’re creating levels in the first place and how you want those levels to influence your donors, for both individuals and corporate sponsors.

For individuals, donor levels can be influential in deciding their gift amount, especially if your donor knows that there will be a published list showing donor names and levels of giving. Never overestimate the power of peer recognition.

Another plus about creating donor levels, especially with millennials, is that you can influence the donor by telling him what his gift will accomplish. For example, if I see that giving $25 to an organization will provide clean drinking water to a village for a week, but a $75 donation will provide it for a month, I’ll definitely be motivated to up my gift. Specifying benefits will often push a donor to the next level, especially if he sees that his money will stretch further at higher levels.

One other strategic way to use donor levels is to create donor clubs—like Major Donors, Monthly Givers, Young Professionals, Affinity Groups, Legacy (bequest). This helps secure repeat donors and build solid relationships between you and your constituents.

Let’s talk about affinity groups for a minute, which is a great way for people to feel connected to an NPO based on similar or like interests.

Years ago, I helped start a Young Arts Circle for a nationally recognized museum and art gallery. This group was geared for the 20 to 40-something crowd, and they met for quarterly events. These events included a “buy it before they’re famous” event where group members could obtain affordable local art. We’ve also organized tours of other local museums where they could meet other fellow art aficionados. It was the perfect way to get young donors to buy into the museum’s mission and really helped solidify those relationships.

An affinity group can be based on any number of shared interests closely related to your organization. And programming events can be easy, especially if you plan them around something your organization is already doing. You can leverage an existing event and provide a sneak peek, special dinner or exclusive meet-and-greet just for group members, which adds value for them but doesn’t create a lot of additional work on your end.

A few things to remember about creating donor clubs:

1) It’s okay to start small.
You don’t have to create five clubs—you can start with one. In fact, that might be more effective.

2) I wouldn’t recommend granting lifetime memberships, regardless of the size of donation.
Some nonprofits do this if a donor gives an exceptionally large gift, but that just encourages a “one and done” mentality. The purpose of forming donor clubs is to foster ongoing relationships with your donors in order to retain them and ultimately upgrade them to new levels. A one-and-done donation does neither.

Now what do you do with donor levels when it comes to corporate gifts and sponsorships?

I’m going to give you your takeaway right up front: We need to better customize donor levels for corporate sponsors in order to show true value for the company sponsoring.

The original idea behind corporate donor levels is to create set packages without customizing. The benefits to the sponsor are based on how big their gift is and include things like a varying numbers of logos on things, free tickets, maybe some kind of hospitality.

I get why organizations create levels—it’s less work. And it’s a starting point. The problem is, setting traditional levels for corporate sponsors is not going to help you to sell more sponsorships. In fact, most companies could potentially gravitate toward the lower end of the spectrum. Only sponsors with a major corporate ego—and the budget to support it—will gravitate higher.

These days you’ll find far more success in ditching traditional donor levels and customizing your sponsorship offers according to your sponsors’ specific needs.

This will involve a little more work, yes.

It means you’ll have to do a little investigating, both in the marketplace and with the sponsor, to know what their needs are and who they are targeting, and then create an offer just for them. It should be specific, and if they need to negotiate the price down or up, you can always rework the package to reflect their needs.

The thing to remember with this is that the benefit is part of the offer, not just a perk for contributing at a certain dollar level.

In my neck of the woods, the organization Big Brothers Big Sisters was looking for partnerships for a new fundraiser called Over the Edge, where people would be allowed to rappel a building if the participant raised enough funds. This was a different, rather edgy event, and I encouraged them to skip the traditional Gold/Silver/Bronze sponsorship plan and instead approach new prospects with a customized ask.

We looked at the “inventory” that had the potential for sponsorships by breaking the event up into parts. In this case we had a helmet, a landing pad, and even an entire side of a building (if you want to get crazy). Our next step was to match each part of the fundraiser with a potential company. For example, a helmet symbolizes safety, which made us think of State Farm Insurance. Plus, State Farm has a bike safety program for kids.

See what we did there? We paired a potential sponsor with an aspect of the event that just made sense—it was the perfect combination and a win-win opportunity for both the insurance company and the organization. Plus, a new relationship was formed, and don’t we all love it when that happens?

The key with this kind of approach is to look at your events creatively and find ways that engage corporate sponsors that’ll make them go, “Awesome! This is the perfect opportunity for both great brand promotion and giving back to our community.”

For both individuals and companies, the key to setting effective donor levels is to remember who you’re doing it for. Do your donor levels exist to make life easier for your organization and staff? Or are you creating them to engage your supporters and sponsors and encourage long-term partnerships?

I think you can guess which strategy will be most effective in the long-run.


Randy Hawthorne

As the former Executive Director and Editor for Nonprofit Hub and a Professional Certified Marketer, Randy shares his passions of marketing and education with nonprofits to help them implement marketing and organizational leadership principles so they can grow their organizations. Randy lends his marketing and organizational leadership expertise to a number of nonprofits in his community. Outside the office, Randy works with high school and college students and mentors young professionals to develop their leadership and entrepreneurial skills.

July 23, 2014

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