AI can be your most powerful tool for enhancing mid-level donations

This blog was originally written for the Blackbaud Engage blog.

Mid-level donors don’t always get the appreciation they deserve.

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

Yet many charities 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 mid-level prospects and prioritise resources and stewardship efforts effectively to deliver strong return on investment. Until now.

AI is rapidly 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 modelling with machine learning, development teams can invest in mid-level donors in key ways:

• Apply models to identify best prospects

• Use AI to inform mid-level donor engagement strategies

• Prioritise stewardship efforts and resources for the best fundraising returns

The potential hidden in the middle of your database

Mid-level 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 mid-level 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 organisations’ fundraising data, covering 512 million donations, 41 million donors, and 9.4 million monthly donors.

• Approximately 70% of donors who qualified as mid-level in 2018 continued giving in the subsequent five years

• 52% qualified again as mid-level donors

• 13% dropped back to standard value

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

Mid-level 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 programmes (appeals, recurring giving, planned giving), and for a longer period. According to Dataro’s Data Pool, the same cohort of first-time mid-level donors gave 9x more than standard-value donors from 2018–2023.

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

The goal when building mid-level programmes is to identify the best mid-level 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 mid-level donor engagement

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

What qualifies a donor as mid-level in one organisation 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 recognises their crucial role in advancing your mission.

Mid-level donors often give year after year to your cause and often more than once annually. They have typically seen and liked your organisation’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 mid-level prospects who may have been overlooked.

• Analyse giving patterns and behaviours to prioritise donors who show a higher likelihood of increasing or maintaining their support.

• Assist in developing personalised engagement strategies and campaigns for prospects to deepen their commitment to your cause.

Generative AI:

• Draft personalised communications that mirror your writing style and resonate with mid-level donors, ensuring they feel valued and recognised.

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 mid-level donors receive the attention they deserve while maximising the overall fundraising ROI. This approach boosts immediate financial contributions and builds stronger, long-term relationships with donors.

Identifying new mid-level prospects with predictive AI

Your donor database is a tremendous source of prospects for mid-level giving. However, many charities 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 mid-level donors who have yet to give at a higher level.

Propensity modelling with AI offers a new approach to identifying existing and new mid-level prospects from within your database.

Predictive AI software tools use machine learning technology to analyse your CRM donor data and identify complex giving patterns and trends indicative of mid-level donor potential. This type of AI propensity modelling can predict which donors will most likely upgrade their giving to the mid-level range or even maintain their contribution at mid-level (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 mid-level giving programme:

Goal:

• Identify and convert more potential donors to the mid-level giving range.

Process:

• Determine your mid-level giving thresholds (£500–£5,000 in cumulative gifts over 12 months).

• Use an AI propensity scoring tool to analyse your donor database and identify the prospects most likely to give mid-value gifts.

• Often, propensity tools will identify donors already giving at the mid-level range plus donors who have never given mid-value gifts (but are likely to).

• Include new mid-level prospects on a mid-value conversion journey or treat prospects as existing mid-level donors in appeals (receiving higher spec packs and more touchpoints).

• If prospects don’t convert after 12 months, remove them from the mid-level cohort to save costs from further outreach.

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

Prioritising your best mid-level donors for improved ROI

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

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

• AI helped them reduce their mid-value programme 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 mid-level 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 programme ROI without risking income. Since 2018, Australia for UNHCR has grown mid-level giving by 43%, representing 11% of its annual fundraising revenue.

Rethinking your mid-level donor strategy with AI

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

Here’s how to rethink your mid-level donor engagement strategy:

• Avoid pushing donors up the pyramid: Recognise that mid-level donors are not just stepping stones to major gifts. Every gift is transformational in the eyes of the donor.
  
  

• Personalise stewardship: Get to know mid-level donors and understand their motivations. Regular, personalised communications can strengthen these relationships, and AI insights can help identify the next best move for individual prospects and mid-level donors.
  
  

• Invest in the middle: Allocate resources to properly steward mid-level donors, recognising their unique contribution to your fundraising efforts.

Integrating AI into your mid-level fundraising

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

The key to success in adopting predictive AI for fundraising is selecting trustworthy tools like Dataro’s AI platform that prioritise privacy and security, provide transparency in their modelling, fully integrate 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 mid-level donors.

“Dataro’s AI predictions have transformed our mid-value stewardship approach. With Dataro we can pinpoint donors likely to upgrade to mid-value giving and distinguish between high-propensity and low-propensity middle donors to optimise stewardship journeys for both our organisation and our donors. AI has become an indispensable tool for maximising mid-value donor impact,”

- Jo Purcell-Jones, Australia for UNHCR.

If you want to learn how AI propensity modelling can help improve your prospecting and stewardship efforts to grow your mid-value programme, book a 15 minute meeting with our team. We’d love to help you leverage the power of AI in your fundraising.