Do you use donation tiers in your online forms and other requests for donations? The ability to add suggested giving levels is a relatively common feature of most online donation forms (including Soapbox Engage's Donations app).
But how do you decide what donation amounts to suggest? Do you set the bar low and hope people give more? Do you aim high and risk scaring away people who can't give that much? Development professionals and fundraisers rightfully have a lot of questions about how to create donation tiers that drive donations instead of scaring away their donors.
The very short answer is, setting donation tiers is both an art and a science… but it definitely doesn't require a crystal ball or pulling random numbers out of a hat. Here's an essential guide to help you create donation tiers in five (relatively) easy steps. (We promise, the steps aren't that hard, but they do require a little research.)
Key Steps to Creating Online Donation Giving Tiers
- Know your ideal donor (really, really well)
- Understand your community of fellow organizations
- Define your core giving level
- Connect impact to each level
- Create different asks based on levels
Why Nonprofits Should Create Donation Tiers
Suggesting donation tiers influence potential donors by creating a "social norm." They gently suggest appropriate giving levels that will make a meaningful impact.
Surprisingly, studies show that adding suggested donation levels to donation pages can increase the average contribution by about 12% for all donors. The same survey revealed that the increased giving levels were followed by higher donor renewal rates in the following years. So, it's a win-win all around!
How donation tiers work
Really simply, donation tiers are suggested giving levels that gently prompt people toward slightly larger giving amounts.
If someone visits your donation page with a plan to give $20 and sees that $25 is the lowest suggested donation amount, some people might stick with their plan to give $20. A lot of people will click the $25 donation amount and contribute an extra $5! And that adds up quickly!
Providing details about your nonprofit's impact also significantly increases people's willingness to be generous. The most effective donation tiers connect giving amount with specific outcomes. When people understand what you will be able to do with the money, they are more willing to contribute their hard-earned money to the cause.
5 Steps to Creating Donation Tiers
There's really no downside to adding donation tiers. The trick is to provide the right donation suggestions. Here are some tips and advice from industry experts that will help you create the right donation tiers for your context.
1. The first rule: know thy donor
If you want to create effective donation tiers, you need to know your donors! It's critical to understand the typical giving behavior of your average donor. Your CRM system can help you discover some essential information, but you might need to reach out to a few of your current donors to learn more about who they are, why they give, and what motivates them.
Learn about your one-time donors who give once or twice to your nonprofit. Find out if they gave primarily to support a friend or family member who is doing a peer-to-peer fundraiser for you.
Interview your monthly or recurring donors. These are probably your most loyal advocates, and you want to attract more donors just like them. Ask them to share their reasons for supporting your nonprofit and what inspires them to give regularly.
You should also reach out to a few major donors and volunteers to find out what connects them to your nonprofit and your cause. Learn about what motivates them to give year after year.
Once you understand a little more about your typical donor and you've identified the average giving amount for small, medium, and large donations, it's time to compare this data to national statistics and begin to put together a strategy for your donation tiers.
2. Learn about the industry average
It's wise to do a little research to learn about industry averages. It's helpful to know how your average online gift compares to other nonprofits' giving statistics. If your average gift is already significantly higher than the industry average, you might want to reconsider your strategy of using donation tiers.
Understanding median gift sizes for your type of nonprofit also helps you decide how much to push the envelope. If you discover that your average donation amount is significantly less than similar organizations, spend some time and energy asking WHY that's true. It's also an indication that you can likely ask for larger donations.
3. Set an "ideal" giving amount
Now that you've got some data points, it's time to start putting together your donation tiers. Most organizations tend to offer three or four options on their donation pages. The first tier should be your lowest, followed by the amount closest to your average online gift amount. The top giving tiers should not be wildly unreasonable, but it's ok to stretch a little.
So, if your average online gift is $40, then consider setting your donation tiers at $30, $50, $100, and $150. These giving amounts are within the ballpark but offer enough "stretch" to challenge your donors.
You'll probably need to test several giving levels to find the "sweet spot," but the idea is to increase giving at each level by just a small amount.
4. Connect impact levels to each donation tier
Remember, in the beginning, we said people are more eager to give when they understand exactly what their money can do. Tell your donors what each giving level can accomplish.
If your nonprofit provides meals to at-risk children, tell people exactly how many meals they will provide (be sure to use acuate numbers). If your ideal gift amount is $50, tell your donors how many children that money will feed.
Donors are generally less willing to give when they aren't sure exactly how their money will be used. Sharing this information helps your donors understand what they accomplished with their hard-earned money. It also demonstrates that you know your numbers, which increases trust in your nonprofit.
5. Use different donation tiers for different "asks"
The people who give once or twice via your website's donation page are very different than the people who sign up for your monthly giving program. Most organizations shouldn't use the same tier on their website donation page as they do when they meet with a potential donor in person.
Likewise, individual donors give for very different reasons than companies. And, corporations probably have very different giving capacities than most individual donors. So, it's essential to create appropriate donation tiers for each group of supporters.
Consider developing donation tiers for the following groups and giving methods:
- Website donation page
- Monthly giving program
- Major donors
- Fundraising events
- Corporate gifts
Some of these donation tiers might be very similar, but it's essential to do the research and make sure you create appropriate, effective tiers for each situation. Otherwise, you might ask for too little and miss out on much-needed funding, or ask for too much and offend or scare off your donors.
Now that you're on the way to creating effective donation tiers, here are three more resources to help you take your fundraising efforts to the next level.
- Donate Button Overview & Best Practices For Nonprofits: The one thing almost every fundraising strategy has in common is a donate button. They're the most direct way to start fundraising online and, if done correctly, they're very effective. This blog will help you pick the right donate button and incorporate all the best practices for using it.
- Don't Choose A Nonprofit CRM Without These 6 Features: CRM systems are perhaps one of the best tools in the development professionals' toolbox. A good one will help you keep track of donor contact information and all kinds of valuable data. This blog will help you choose the best system to meet your nonprofit's needs.
- 5 Easy Steps To Create A Monthly Giving Program: Monthly giving programs are the bedrock of most financially stable nonprofits. They have many benefits and it's a fundraising strategy that creates predictable cash flow with very low maintenance costs. This blog will help you start your first monthly giving program.
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