Are you and your organization familiar with the concept of a donor pyramid? If not, you may find this introduction to the theory helpful as you consider your nonprofit’s plan for fundraising. And if this way of thinking and organizing your donors is something you’ve already put in place, perhaps this will serve as a refresher and a starting point for revisiting or revising your existing strategy.
What is the donor pyramid?
Simply put, the donor pyramid (or pyramid of giving) is a way to organize your organization’s donors into distinct and defined groups based on their giving history and potential and their involvement in your organization. It is “a key fundamental because it illustrates a theoretical overview of development and reminds us of the inextricable relationship between deepening donor engagement and raising more revenue.” (Pagnoni 2021).
Various versions of the donor pyramid can be found and serve as a starting point as you think about your organization, but ultimately the details of yours may be unique to your organization. Bearing that in mind, below is one example of how you may think about the pyramid.
Breaking out and looking at your donors through this lens allows you to see both what and whom your organization is working with and develop strategies that allow you to effectively maximize your donor potential. More specifically, it can help you determine the appropriate amount of time, energy, and effort that should go into each “level,” as well as give you a good idea of how many donors you have in each category. Lastly, and for some organizations most importantly, it will give you a clearer view of which donors may be ready and able to move up the pyramid—and how you will go about doing that (but more on that later).
What the donor pyramid is not
In order to fully understand what the donor pyramid is, it is also important to understand what it is not. The donor pyramid is not a process through which you are trying to move all of your current and prospective donors—that model/theory is called the donor funnel. The donor funnel is:
The process you walk people through to move them from brand new prospects to lifelong donors to your non-profit. It is a process of engagement – meaning that it shows the lifecycle of the donors at your non-profit. Your goal with the donor funnel is to put lots of prospects into one end and then cultivate them, ask them for money, and steward them so that they become lifelong givers to your organization. (Garecht 2022).
As outlined above, the pyramid is, essentially, a way to organize your existing donor data. Given that your goal as you construct your pyramid is to take an honest look at your data and donors and organize them strategically, you are quite likely to find that many of your donors simply do not have the ability to move up the pyramid more than one or two levels (if at all). With that in mind, treating the pyramid the same as the funnel will (almost certainly) lead to failure and frustration, highlighting why using this tool right is the key to success.
Why you need a donor pyramid
Though mentioned briefly above, let’s touch a bit more on why having a donor pyramid may be so beneficial to your organization.
First, it is important to have an accurate picture of the donors you already have committed to your organization. Knowing if your base is made up primarily of one-time or small annual givers with few to no capital or planned givers will yield a significantly different strategy than that of an organization with several high-potential donors.
It can also be a helpful way to outline how your organization can reach its specific fundraising goals (whether those be annual giving goals, a capital campaign, etc.). One fundraiser says that this is “where donor pyramids really shine… The plan for every campaign you run—including capital campaigns, annual campaigns, crowdfunding campaigns, and everything in between—should include specific goals for various giving levels. You need to know exactly how many donors you need at each giving level in order for your campaign to succeed.” So, for example, if you need to raise $100,000, you can use a pyramid breakdown to determine that you will need 1 $25,000 donor, 1 $15,000, 2 $10,000 donors, etc. The ability to be this specific in your planning and goals makes you significantly more likely to be successful.
Lastly, as we’ve already briefly talked about, creating this type of breakdown for your fundraising strategy allows you to smartly decide how to spend your time and energy. Smart nonprofits focus on fundraising ROI, so the pyramid can be helpful as you look to spend your time on the right people, at the right time, using the right strategies — especially when you’re looking to raise funds from current and potential major donors.
How to move donors up the pyramid
Though not everyone has the financial capacity to move up your donor pyramid, you likely will find at least a handful of people with the potential to give significantly more. When you find these people, it’s important to cultivate those relationships to ensure you’re maximizing their potential.
The big question here though is, how do you identify these people who have the capacity to transition from mid to top-tier givers? Though this has historically been a time-consuming and tedious task, it is where Atticus is able to step in and simplify the process for you. Our solution uses data (yours and other sources) to identify the high-net-worth individuals you have in your network, whose giving potential is thus far untapped. With little time and effort required from you and your organization, we’ll be able to help you better understand who is currently in the right section of your donor pyramid and who you may want to consider focusing your efforts on in order to continue building that relationship into a major donor for your nonprofit.
The identification portion of this process is often the most difficult, and once this has been done, as a fundraiser by trade, you likely know what comes next — which Atticus can also help you with. We can help you understand how and to what degree potential donors align with your organization’s mission, vision, and values, so you’ll be able to use that information as a starting point for building the relationship. From there, you will want to build a clear partnership and ensure they understand what you already know — that their giving priorities are highly aligned with your organization’s plans and goals. Doing this with the right people, at the right time, can and will help you move those who are able to the top of your giving pyramid.
When used rightly, this simple strategy for how you think about your donors can make a significant difference in how your fundraisers spend their time and effort, and the success they find as a result. And if you’re considering the use of a donor pyramid to reach your fundraising goals, also consider the ways in which Atticus is able to help you take the theory from just that to a practical tool that may change the fundraising trajectory of your organization.
