Average donation amount probably gets more attention than most other fundraising metrics, and for good reason. Raising the average usually means you’re increasing revenue – though this is not always the case if the increased average pairs up with a loss of actual donors.
The greatest value of increasing average donation amount, however, is that it means you can raise revenue without needing as many donors. We’ll take a look at some of the math around this, and then we’ll walk through some strategies you can use to increase your average donations.
Averages Can Be Deceptive
If one nonprofit receives one million donations at an average of $20 per donation, that’s $20 million in revenue. If another nonprofit gets 100,000 donations with an average of $50, that’s $5 million in total revenue.
Higher averages do not always mean more money.
For example, let’s say a nonprofit decides to give up its low-dollar donation program entirely. Over the next year, it then receives far fewer donations under $100. Naturally, this causes their average donation amount to skyrocket. But, because they didn’t do anything to increase giving from their higher dollar donors, their overall revenue actually drops.
That’s not a good strategy for increasing the average donation amount. Now, you can make a case for reducing your low-dollar fundraising budget, because if you’re spending as much or more to obtain those low dollar donations, your profits – not revenue – may actually be lower than they’d be if you got fewer donations but spent less money.
All this to say – averages can be manipulated in a number of ways, and revenue is different from profit. In the ideal scenario, you would keep all your donors but increase the average amount. In the real world, you’ll have lots of donor churn. So if you can increase average donation amount, you will be able to raise more money with fewer donors if you get enough of them.
Strategies to Increase Average Donation Amount
Increasing average donations can be approached from several different vantage points.
Increase major giving
Major gifts fundraising has its own array of strategies and practices that are distinct from other types of fundraising. For example, research found that giving arrays (a list of suggested donation amounts displayed on a fundraising appeal or donation form) are effective for all sorts of fundraising situations – except major donors. It’s better to leave gift amounts for major donors open-ended and not use suggested amounts.
But that’s just one tiny way major gifts fundraising is different.
If you are treating your major donors like all your other donors, make it your top priority to stop doing that and create a separate program to engage them.
Our parent company MarketSmart exists to help nonprofits identify and pre-qualify major donor prospects, and then engage and cultivate them using personalized, automated communication. And you can do this for thousands of supporters, far more than human gift officers can work with.
The result of that approach is more major donors and bigger gifts, which will certainly drive up your average donation amount.
Change giving arrays
On the smaller side, suppose you average 10,000 donations per month. If you could increase the average for each of those by just $5, that would mean $50,000 in new monthly revenue. So even incremental increases in giving amounts can result in sizable revenue gains.
Giving arrays are one of the primary tools nonprofits can use to increase average donation amounts. Here are a few strategies you can try.
Make your average less than the second lowest option
The first thing you need to do is know your average donation amount. The Fundraising Report Card makes that easy. Upload just three categories of data, and you’ll have your average in seconds. And, you can see how it changes each year.
Once you know your average, you can use it to adjust your giving arrays in your fundraising appeals and on your donation pages.
Many donors tend to pick the second lowest option in a giving array. So, make your second lowest option higher than your average, and this should result in a higher average donation amount.
Reduce the number of options
Another strategy is to present donors with fewer options. Instead of five, try giving them just two. Some fundraising appeals ask for only one, plus the open-ended option. You can do this if the one amount you suggest in that appeal has a specific meaning attached to it.
With fewer options, you can even set it up so that all the options are higher than the average, and the open-ended option is still there for people who choose to give less.
Will this result in fewer donations though? That’s something to watch. Again, these are strategies to try. Always test and track your fundraising metrics, and be prepared to continue adjusting your approach.
Bring dollar amounts closer together
Another approach would be to shrink the range of ask amounts. For example, suppose this is your current giving array:
$30, $50, $100, $250, $1000, other
Many donors might feel like the higher numbers are too high, and they’ll opt for the lowest two options. But what if you changed that giving array to this:
$30, $50, $70, $85, $150, other
For a campaign being sent to a large number of supporters, your lower-dollar donors now have more choices that feel within the range they can give. So you might get more of them taking the third or fourth amount, and this would result in a higher average donation.
Make the biggest amount much bigger
Another approach is to make the last option far bigger than all the others. That approach might look something like this:
$30, $50, $75, $150, $2500, other
The idea here is to enlarge what the donor perceives as permissible to give. They may think, “Some people give $2500? Maybe I should give $75 or $100 then.”
Again, you only need a subset of donors to choose the higher amounts to get a sizable boost in your average. And as long as what you’re doing doesn’t drive donors away and result in a big loss in the number of donations, your revenue will increase with it.
Link donation amounts to specific outcomes
Another good strategy is to put more information in the giving array than just dollar amounts. Include information about what each amount pays for that is part of your mission.
Now, the donor isn’t just giving $50. They’re providing meals for ten people who are food insecure. Tangible outcomes are a big motivation and inspiration for donors, because people want to know where their money is going.
If you combine this strategy with some of the others on this list, you can motivate more donors to choose the higher amounts.
Customize giving arrays to donor segments
The final strategy requires a bit more work with your donor database and CRM, but it’s worth it. If you’re sending fundraising appeals by mail or email, try to segment your donors into different categories that can then be given customized giving arrays.
For example, suppose you break up your monthly donors into two categories – those giving under $75 per month and those giving over $75. If you have a one-time donation request you want to send to your monthly donors, now you can present giving options that are in line with what these people seem willing to give.
You can create many other donor segments:
- Donors who give three or more times per year
- Donors who give over $X per year
- Donors who have been giving for more than five years
- Donors who have attended at least one fundraising event
- Donors who have only given on Giving Tuesday
There is no end to the segments you could create. The point is, you will find that certain giving options make more sense for each of these groups. This approach takes a bit more work on the front end, but it has a strong chance of resulting in a higher average donation.
Do You Know Your Average Donation Amount?
It’s just one of many fundraising metrics every nonprofit should know. With the Fundraising Report Card, it’s super easy to find out. All you have to do is upload three categories of data – donor ID numbers, donation amounts, and donation dates – and in seconds you’ll receive a treasure trove of valuable fundraising data, not just average donation amount.
You’ll also know:
- Lapsed donors
- Donor reactivation rate
- Donation frequency
- Donor retention rate
- Donor acquisition
- Donor churn
- Average number of donations
- Number of donors in five different giving levels
- Donor lifetime value
- And so many more
All the personal information of your donors is completely protected, because you aren’t uploading anything that identifies them. And with these metrics in hand, you’ll be positioned to start making decisions backed by data, not gut feelings or guesses.