AI Can Be Your Most Powerful Tool for Growing Midlevel Giving

Midlevel donors don't always get the love they deserve.

This loyal and often overlooked segment of donors represents a significant opportunity for revenue growth and impact if stewarded effectively.

Yet many nonprofits fail to strategically engage middle tier donors beyond building a pipeline for major gifts. They've also lacked adequate tools to help them identify good midlevel prospects and prioritize resources and stewardship efforts effectively to deliver strong return on investment. Until now.

Just as AI is revolutionizing the way major gift officers fundraise, AI is fast becoming a powerful tool for identifying and engaging the unfulfilled potential of donors in the middle of your database.

By tapping into the power of AI, specifically AI propensity modeling with machine learning, development teams can invest in midlevel donors in key ways:

• Apply models to identify best prospects
• Use AI to inform midlevel donor engagement strategies
• Prioritize stewardship efforts and resources for the best fundraising returns

The Potential Hidden in the Middle of Your Database

Midlevel donors, those giving more than "core" or "standard" donors but not yet at the major donor level, represent a crucial segment of your supporter base and an important opportunity for sustainable revenue growth to advance your mission.

This unique donor segment tends to be more loyal than standard donors, make above-average contributions, and have the potential to become major donors.

But midlevel donors are not just major donors in waiting.

Dataro's Data Pool found that only 4% of donors who qualified as middle donors in 2018 (giving between $500 and $5,000 cumulatively in 12 months) became major donors in the next five years. This analysis was based on 210 global nonprofit organizations' fundraising data, covering 512 million donations, 41 million donors, and 9.4 million monthly donors.

• Approximately 70% of donors who qualified as midlevel in 2018 continued giving in the subsequent five years
• 52% qualified again as midlevel donors
• 13% dropped back to standard value

These insights underscore the importance of treating midlevel donors as a separate cohort requiring a dedicated and focused stewardship plan, rather than as a pipeline to major giving.

Midlevel donors also generally offer a higher ROI and lifetime value than lower-tier donors. They give more per donation and often give more frequently and across different fundraising programs (appeals, recurring giving, planned giving), and for a longer period. According to Dataro's Data Pool, the same cohort of first-time midlevel donors gave 9x more than standard-value donors from 2018-2023.

Investing time and resources into cultivating midlevel donors can yield significant returns. For the median organization in Dataro's analysis, approximately 7% of total fundraising revenue came from mid-value gifts, although this varies by nonprofit segment.

The goal when building midlevel programs is to identify the best midlevel donors (both prospects and existing middle donors) to nurture for continued support while ensuring the investment yields positive returns. This is where AI can help.

The Role of AI in Midlevel Donor Engagement

Engaging midlevel donors effectively requires a dedicated strategy, and AI can play a crucial role in this process.

What qualifies a donor as midlevel in one organization may qualify them as a major donor in another. The amount they give matters less than how you think about these supporters. Middle donors deserve acknowledgment for their contribution and should receive distinct stewardship that recognizes their crucial role in advancing your mission.

Midlevel donors often give year after year to your cause and often more than once annually. They have typically seen and liked your organization's work, feel connected to your cause, and are ready to be more actively engaged in your mission. Some donors are just waiting for you to notice them and start building a deeper relationship. Generative and predictive AI tools are built for this kind of work.

Predictive AI:

• Regularly scan your database to identify midlevel prospects who may have been overlooked.
• Analyze giving patterns and behaviors to prioritize donors who show a higher likelihood of increasing or maintaining their support.
• Assist in developing personalized engagement strategies and campaigns for prospects to deepen their commitment to your cause.

Generative AI:

• Draft personalized communications that mirror your writing style and resonate with midlevel donors, ensuring they feel valued and recognized.

The more you invest in middle donors, the more likely you are to retain and upgrade them. By leveraging AI, fundraisers can significantly enhance their efficiency and effectiveness, ensuring that midlevel donors receive the attention they deserve while maximizing the overall fundraising ROI. This approach boosts immediate financial contributions and builds stronger, long-term relationships with donors.

Identifying New Midlevel Prospects with Predictive AI

Your donor database is a tremendous source of prospects for midlevel giving. However, many nonprofits lack capacity and efficient methods to find these prospective donors. Instead, they focus on donors who have already given mid-range gifts, missing opportunities to engage and nurture potential midlevel donors who have yet to give at a higher level.

Propensity modeling with AI offers a new approach to identifying existing and new midlevel prospects from within your database.

Predictive AI software tools use machine learning technology to analyze your CRM donor data and identify complex giving patterns and trends indicative of midlevel donor potential. This type of AI propensity modeling can predict which donors will most likely upgrade their giving to the midlevel range or even maintain their contribution at midlevel (if stewarded effectively).

Machine learning models save time by automating prospecting efforts, allowing fundraisers to focus on the tasks that matter most: building campaigns and communications that nurture relationships in the middle of your CRM.

Here are key steps for putting AI into action for your midlevel giving program:

Goal:

• Identify and convert more potential donors to midlevel giving range.

Process:

• Determine your midlevel giving thresholds ($500-$5,000 in cumulative gifts over 12 months).
• Use an AI propensity scoring tool to analyze your donor database and identify the prospects most likely to give mid-value gifts.
• Often, propensity tools will identify donors already giving at the midlevel range plus donors who have never given mid-value gifts (but are likely to).
• Include new midlevel prospects on a mid-value conversion journey or treat prospects as existing midlevel donors in appeals (receiving higher spec packs and more touchpoints).
• If prospects don't convert after 12 months, remove them from the midlevel cohort to save costs from further outreach.

Save The Children Netherlands transformed its midlevel giving strategy by leveraging AI-powered donor predictions. Using a midlevel machine learning model integrated with their CRM data, they identified and targeted potential midlevel donors more effectively. This approach allowed them to rank donor profiles, ensuring that their midlevel outreach was directed toward the most promising prospects. As a result, the charity converted 359 standard-level donors to the midlevel range (or higher) over six months.

Prioritizing Your Best Midlevel Donors for Improved ROI

Not everyone who gives in the middle range will continue giving at that level in the future. AI can predict midlevel giving trends, enabling development teams to identify their best midlevel donors (and prospects), and allocate resources more efficiently to prioritize the right donors, improving program ROI.

In 2023, Australia for UNHCR leveraged predictive AI to streamline their midlevel stewardship and maximize program ROI. The charity, which raises funds to support displaced people worldwide, used AI to rank their midlevel donors, segmenting lower-value from higher-value middle donors to create tailored stewardship journeys.

• AI helped them reduce their mid-value program from 8,000 to 4,000 high-value middle donors, who received traditional high-touch communications.
• Lower-value middle donors received semi-automated stewardship and lower-spec communications.
• Lapsed middle donors with low midlevel propensity were moved back to standard levels of engagement and were asked for smaller gifts (improving donor retention in this cohort.)

These changes saved the charity three hours per week in stewardship resources, reduced fundraising costs and improved program ROI without risking income. Since 2018, Australia for UNHCR has grown midlevel giving by 43%, representing 11% of its annual fundraising revenue.

Rethinking Your Midlevel Donor Strategy with AI

Midlevel donors are a deeply engaged and loyal segment of your supporter base whose long-term relationships power your mission. They deserve their own program and stewardship strategy to recognize the incredible value they bring as a cohort.

Here's how to rethink your midlevel donor engagement strategy:

• Avoid pushing donors up the pyramid: Recognize that midlevel donors are not just steppingstones to major gifts. Every gift is transformational in the eyes of the donor.
• Personalize stewardship: Get to know midlevel donors and understand their motivations. Regular, personalized communications can strengthen these relationships, and AI insights can help identify the next best move for individual prospects and midlevel donors.
• Invest in the middle: Allocate resources to properly steward midlevel donors, recognizing their unique contribution to your fundraising efforts.

Integrating AI into Your Midlevel Fundraising

Predictive AI tools offer a significant advantage in midlevel giving. By harnessing AI insights, fundraisers can gain deeper insights into middle donors, pinpoint additional prospects within their database, and refine midlevel engagement strategies to boost donor retention and increase contributions effectively.

The key to success in adopting predictive AI for fundraising is selecting trustworthy tools that prioritize privacy and security, provide transparency in their modeling, are fully integrated with your fundraising CRM, and employ a comprehensive approach to data analysis.

But remember, the goal of AI is to simplify your workflow, not complicate it further. Make sure any solution you employ is easy to implement, user-friendly, and integrated with your existing tools and CRM.

As fundraisers and philanthropy teams begin to embrace AI in their prospecting and stewardship efforts, we'll see the impact of this technology grow. And as predictive AI models become more powerful, we'll see more and more ways for fundraisers to strengthen relationships with their midlevel donors.

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