From $10 to $10,000: Rethinking the Giving Pyramid for a New Age of Philanthropy

Chapter Leadership Brief 6.28.24

by Anton Lipkanou
President and Parnter, Delve Deeper

The philanthropic landscape in the US is on the cusp of a major transformation.

By 2028, Millennials are poised to account for as much as 60% of philanthropic giving, challenging non-profits to devise innovative strategies to engage this burgeoning donor demographic.

Individuals continue to be the backbone of charitable contributions, but the philanthropic behavior of younger generations is shifting. While their wealth and capacity to give are growing, they don’t reflexively trust organizations and are less willing to donate. They care about the cause, not the organization and they expect organizations to build personalized relationships with them to earn that trust.

To adjust, non-profits need to talk to young donors about the cause they most care about,  employ nuanced multi-channel communications, establish robust monthly giving programs, and craft personalized retention tactics for newly acquired donors, all underpinned by predictive modeling and analytics.

In other words, the era of mass marketing for non-profits is over. The non-profits that will win will create tailored content for the masses of small-giving donors and, over time, migrate them to larger gifts. Taking a Millennial donor from $10 a month to $10,000 a year over 10 or 15 years will only happen with intense customization.

That requires a radical rethinking of one of the non-profit world’s central marketing ideas: the Giving Pyramid.

There are cracks in the Giving Pyramid.

The Giving Pyramid, a mainstay in the fundraising world, has a broad base of small-money donors and a narrow peak of major benefactors. At the bottom, we find one-off and casual givers, who constitute the largest number in the donor community. The middle tier consists of steady yet modest contributors, while the top is reserved for the most significant donors, both in terms of their financial input and their engagement with the organization.

It might sound stable, but this structure is at risk of getting wobbly, as the base shrinks and the peak lengthens. Why? The failure to cultivate early-stage relationships with donors, particularly millennials who seek early recognition in their giving journey. By failing to engage this segment until they reach mid-level status, and as older donors gradually recede, the base erodes.

In the traditional giving pyramid model, top-tier donors enjoy high-touch, tailored engagement from fundraising and development teams, while the lower levels, targeted by broad-stroke marketing efforts, miss out on this personal touch. One-size-fits-all communication falls short in nurturing fledgling donor relationships. And organizations frequently lose sight of where a donor is on their journey, misdirecting outreach efforts and failing to convey the donors' value at every level of giving.

This disconnect not only hampers donor retention but also overlooks the opportunity to highlight the impact of donors' contributions, which is essential for fostering satisfaction and encouraging future giving. For organizations with diverse missions and programs, this challenge intensifies because one-dimensional messaging approaches don’t resonate with different demographic profiles

Traditional marketing strategies fail on two fronts: they neither expand the base with new, individual donors nor enhance the lifetime value (LTV) of existing donors.

Introducing the Audience-First Giving Pyramid

The Audience-First Giving Pyramid, developed by DELVE, changes all that. It creates the personalized experience that major donors enjoy, but scales it through the power of data and tech.

At the heart of this strategy is a commitment to the mass donor base. Every donor interaction, whether through an ad, a search, or an email is tailored to offer a unique, personalized experience. This inclusivity allows donors of all giving capacities to feel like integral parts of the mission, encouraging them to increase their contributions over time. The content and outreach should evolve with the donor, as the donor goes from a modest monthly gift to substantial yearly donations, maintaining a strong connection as they progress up the pyramid. It’s like assigning an individual giving officer to each mass donor at a fraction of the cost.

This approach requires setting precise goals for each audience segment and donation stage, allowing for scalable and targeted media outreach. By understanding donors' emotional drives, nonprofits can enhance message relevance, extending their reach and achieving better engagement. Relentless testing and audience selection ensure sustained excellence in performance.

At DELVE, we have found that an Audience-First Giving Pyramid fundraising strategy that engages mass donors at the bottom of the pyramid drives 10x growth over traditional approaches that start personalizing toward the top. But this only happens when the process is combined with a mindset that demands relentless, daily optimizations.

The workstreams that make it work:

DELVE's methodology divides into six key workstreams:

1. AdTech/MarTech: Seamlessly integrate technology tools to bridge data gaps across the donor pyramid, both horizontally and vertically.
2. Data: Identify unique donor segments by behavior, intent signals, and demographics for each mission pillar to drive a media strategy aligned with business objectives.
3. Content: Craft personalized content–ads, videos, blog posts, social media, webinars, and newsletters–to each donor segment and their stage in the giving journey.
4. Branding Media: Reach both prospective and current donors with brand communications that introduce the organization or remind them of its impact.
5. Performance Media: To move donors up the pyramid, use keyword topics, sentiments and intent signals to determine donor interest and programmatic display ads to drive measurable actions. With geographic and demographic overlays, this improves the likelihood of engagement
6. User Experience: Create a personalized data journey, from targeting advertising to website content, using data and user behavior. This continuous cycle, informed by data, nudges them steadily up the Giving Pyramid.

How these workstreams play out with each depends on the organization’s specific challenge.

Conclusion

In a rapidly evolving philanthropic landscape, the Audience-First Giving Pyramid offers a sustainable and effective strategy for nonprofits seeking to engage the next generation of donors. By leveraging technology, data, and media, nonprofits can create personalized, meaningful experiences for all donors, fostering long-term relationships and increasing contributions as donors’ capacity to give grows. The future of fundraising lies in engaging the base of the pyramid, ensuring that every donor feels like a valued member of a united mission.

Anton Lipkanou is President and Partner at a performance media agency, Delve Deeper, which focuses on driving exceptional value for non-profit and for-profit organizations with a lifetime value revenue model. Starting as a media trader and seeing the inefficiencies in the market, Anton developed a firm belief that strong media performance relies on the foundation of data and technology integration to close the donor data gaps from mass donors to major givers, sprinkled with a relentless obsession to test every dimension in media buying platforms.