High-Value Donors Are Key to Fundraising Success

February 1, 2023

High-Value Donors Are Key to Fundraising Success — Especially Under Difficult Economic Conditions. Here’s Why.

Inflation. Recession. Downturn. We’ve all heard these terms in the news as the economic outlook for 2023 has been discussed — and if you’re a fundraiser, you may be asking yourself … how will this impact donor acquisition for my organization? Should my strategy change? If so, how?

These economic conditions are likely to affect donor acquisition in the coming months. The good news is, there are strategic and proactive ways to refine and focus your acquisition strategy — and it all centers around your high-value donors.

First let’s examine your small and mid-level givers. This group will likely be the most heavily impacted. Facing higher prices at the gas station and grocery store, they may be unable to continue giving or giving at levels they have previously. As Dave Smith, CEO & Founder of Heaton Smith Group, explained in an article for GivingUsa, “High inflation reduces one’s purchasing power and thus decreases one’s discretionary income. When donors have less income, then they are inclined to give less – particularly small-dollar donors.” Consequently, contributions to your organization from these donors are unlikely to break even on the investment it took to acquire them, let alone generate net income under these less-than-favorable economic conditions.

At Summit Marketing, our research indicates during times of economic uncertainty, it’s more important than ever to prioritize time and energy focused on your higher-value donors, or as we call them, “tuna,” “halibut” and “whales” — those who give $20 – $99, $100 – $499 or $500 or more as their first gift, respectively. These important cheerful givers are more likely to have the financial resources to give more — and give again — despite the challenges presented by inflation and a slowing economy.

In a five-year study of donor behaviors, we discovered a high correlation between a donor’s first gift and their lifetime value. Our research and client results prove nonprofits can reduce acquisition costs and achieve better ROI by focusing their precious resources on prospective donors who typically make larger first-time gifts.

Of course, factors like reduced costs and increased returns become even more critical when navigating tough economic times. It’s also more important than ever to invest your fundraising resources carefully, focusing on the donors whose giving can lend the greatest support to further your mission.

Let’s be clear: We are not discounting the value of any donor to your organization. Yet, good intentions and an excess of small gifts don’t equate to a healthy bottom line. And without ongoing strong financial resources, you may have challenges funding your programs and services in 2023 and beyond.

A strategy that targets fewer, but higher-value donor prospects, is the most strategic and prudent for your organization to stay on course and weather all economic seasons.

Summit SONAR® is an exclusive acquisition strategy that targets high-quality donors who give larger gifts. With 36 years of experience in nonprofit fundraising, Summit Marketing can help your organization navigate the waters of donor acquisition in 2023.