Finding 'middle' ground: smooth send-off between middle donor and major donor.

The middle donor giving program at Catholic Relief Services is, in essence, a bridge to the organization's major giving program. The objective is to cultivate middle donors, and in doing so, identify unique groups among them and to gain valuable insight that can be used in other areas.

An international relief organization, CRS labors to provide the resources to effect long-term development in 99 countries. With the recent string of natural disasters, and an increasingly competitive sector, much importance is placed on raising donor commitment to a higher level.

Jean Simmons, director of direct response fundraising at CRS, spoke about the organization's middle donor program at the 2006 Direct Marketing Association Nonprofit Federation conference, held at the Waldorf=Astoria in New York City. She listed the following keys to implementing a cost-effective program to identify the very small number of donors who have the potential to make a larger gift, but not so large that they'd be considered major gifts donors--at least, not yet.

Key 1: Internal Coordination. During 2004, the Baltimore, Md.-headquartered CRS launched its middle donor program to cultivate those donors it believed warranted personal solicitation for a larger gift. According to Simmons, the first critical step was internal buy-in. "We had to break down the typical silos that all organizations have. Communication is key."

Simmons said one lesson learned was the importance of establishing protocol for migrating donors between the middle and major gifts units. Conference calls between the staff in the middle gifts unit and other members of the CRS staff were held periodically. "It's important to share cultivation ideas with other CRS units," she said.

Simmons placed much emphasis on "maintaining a solid relationship with the major gifts unit" including having the development officer of the middle gifts unit attend meetings with the major gifts officers.

Key 2: Development Associates. To foster relationships between CRS and the 4,500 middle donors who were identified, CRS placed an ad in the classifieds seeking six part-time development associates "willing to learn about our organization and share their enthusiasm with our donors." The associates--made up mainly of female volunteers--would be managed by the fill-time middle gifts unit development officer.

CRS held an intensive orientation for the associates, followed by ongoing training. "Investment of time and resources for training pays off," said Simmons, who reasoned that "thorough understanding of the CRS ideology and programs is essential to establishing a relationship with donors."

Each associate was then given a portfolio with 750 donors' names. Simmons underscored the need for constant communication between the development officer and the associates.

Key 3: Donor Identification. With its board members and departments onboard, and development associates in place, CRS prepped for the program by gathering information on its middle donors, which Simmons identified as those with an exceptional giving history with CRS, along with recent and consistent giving.

One method of information collection was a 13-question survey done over the telephone. "They were tough questions to ask, but we were able to capture information and make adjustments on how to reach out to certain donors," said Simmons. As of mid-August, CRS had collected information on more than 800 middle donors.

According to the results of the survey, middle donors appreciate and respond well to having a personal contact at CRS--their development associate--and they enjoy engaging in conversation with that contact. Additionally, the survey uncovered that the organization's middle donors trust CRS, a majority are Catholic, and they like the efficiency with which CRS operates.

Via other channels of information collection, CRS found that middle donors must feel a special connection to the organization, which, according to Simmons, is facilitated by the development associate. Donors must also be included as a partner in the organization's mission. For example, CRS allows its donors to send letters of thanks to CRS staff overseas, which bonds the donor closer to the organization.

Other key findings included the importance of working hard to keep the donors engaged and involved, making it a smoother send-off between middle and major giving. Holding events where middle and major gifts donors mingle is a great way to facilitate this send-off. "You just can't put a price on value," added Simmons.

Return on investment

A recent string of tests by the development team at St. Jude Children's Research Hospital had a different sort of objective from the usual analyses of cost to raise a dollar, response rate, and net yield.

"We were interested to see if donors who give at higher dollar ranges would tolerate a middle donor program," explained Lori O'Brien, senior vice president of direct marketing at St. Jude. O'Brien said a key query of the testing was, "Would they (middle donors) like enhanced packages or would they consider it a waste of money?"

According to O'Brien, several more queries were addressed via the testing, including whether certain packages would upset "big donors," whether to try giving levels and clubs, how to define "middle donor," and, ultimately, what the major gifts team at St. Jude would think. The chief concern, said O'Brien, was that "there's a team that deals with small businesses, one for large corporations, but middle businesses fall through the cracks--if you think of yourself as a business."

Surveying donors

Prior to testing, the team mailed a survey to donors who give at the $250 or higher level, unless specifically designated "no mail" by a gift planning or major gift representative. The survey--which saw a 10-plus percent response rate--found that those donors would be receptive to a middle donor direct mail program.

The survey found that the number one reason donors give to St. Jude is no child is ever turned away for a family's inability to pay, followed by St. Jude's lack of racial barriers. Other reasons included an interest in the emerging research, admiration for founder Danny Thomas, and a strong sub-segment said they give because of a patronage to St. Jude Thaddeus. Approximately 40 percent of responding middle donors said they're Catholic, with nearly all claiming religious affiliation.

January Test: Control vs. Certificate of Appreciation. Two groups of middle donors ($250+, 0-36) were mailed, one the control Christmas card package, the other the certificate. The latter consisted of a letter describing the cost of some treatments, along with an acknowledgment for how long the donor has been giving to St. Jude. Cost-per-thousand (CPM) for the control was less than half the CPM for the test package, but with a $436.77 average gift, the test yielded a 112 percent lift in net-revenue-per-thousand (NPM).

February Test: Control vs. personalized St. Jude note cards. The team tested the control--this time a letter detailing the story of a child at St. Jude paired with a bear postcard--against a personalized note card asking donors to "Tell Your Friends!"

Although it had a higher response than the control, the test package reaped the lowest response rate of all the major donor packages tested. "Donors hated it; it bombed," O'Brien said of the note cards. "Middle donors hated that it had their name on the back of the card. They thought that it would be seen as bragging to friends." Additionally, the note card package cost nearly three times the control package.

March Test: Control vs. Video Tour with postage vs. Video Tour without postage. A child's story paired with a "happy photo" was tested against two video tour packages, one stamped, one not. "We made the video look very cheap, very low tech," said O'Brien. The video with postage performed best, with higher response rates. Although it was 3.5 times more costly than the control and 40 percent more costly than the test without postage, the video tour with postage yielded a 50 percent higher NPM than the control ($29,121 compared with $19,507).

May Test: Control vs. Handwritten note card with reply device. Middle donors loved the hand-written note card from Marlo Thomas, said O'Brien. Four times more expensive than the "We Never Dreamed" control, the test yielded a 50-percent lift in NPM, to the tune of $25,327. Response rates reached 8.12 percent compared with 6.14 percent for the control. And average gift for the test was $338.79, compared with $281.81 for the control, offsetting the higher cost of the note card.

Results. The middle donor program--which St. Jude rolled out in 2003--includes selects of $250+, 0-36 months, along with donors who give a cumulative $250 over three months. Despite comprising less than 1 percent of St. Jude's active donor file, middle donors today generate nearly 10 percent of the organization's annual mail revenue, said O'Brien, up from 4 percent. And, cost to raise a dollar is just 6 cents.

Each middle donor who gives a $500 gift receives a call from the gift planning team, said O'Brien, who said the number of donors giving $1000+ has grown over the three years.

St. Jude successfully launched a "brick" campaign designed to upgrade middle donors, the first naming opportunity for non-major givers. Next up, St. Jude will begin to identify and upgrade "hidden" middle donors, wealthy donors on file whose average gift is less than $25.

"Be courageous, go out there and do it," O'Brien said of a middle donor program. O'Brien noted a great way to foster middle donors is via non-probing "love calls," where volunteers, typically older and female, "just call up donors and love on you."