A Nonprofit's Guide to the Donor Pyramid

donor pyramid
 
A donor pyramid (also known as a gift pyramid or fundraising pyramid) can be a helpful tool when you think about it outside the typical pyramid structure. When used in your campaign, a donor pyramid can be an excellent way to plan out your giving milestones and create goals based on each giving tier to reach your overall target. 

When fundraising, you know how vital segmentation and personalized messaging are to success. Sending out hundreds of generalized solicitations can mean fewer gifts and risking donor fatigue. Planning segments is a crucial step in the fundraising process, and if you have a robust data management system, it’s relatively easy to do. 

A donor pyramid can be an organized visualization of your data and help your team understand your donor segments. When planning your campaign, you can decide how many donations you will need from each segment to reach your goal.
 

What Is a Donor Pyramid? 

donor pyramid example

The donor pyramid is a representation of your donors broken down by giving level. You can choose to organize your entire database or choose segments and create a donor pyramid for each. The base of your pyramid is for smaller-gift donors, and you save the top tier for major giving. 

Using the pyramid, you can break down campaigns and see how many donors you would need from each tier to reach your goal. Using each tier, you can then go into your nonprofit’s database and see what donors you should prospect for gifts. 

Here is an example of a door pyramid, but keep in mind the different tiers, and gift amounts are entirely up to your organization. Typically the bottom of the pyramid represents smaller gift donors, and the top of the pyramid is reserved for larger gifts. 

How to Use a Donor Pyramid In Your Campaign

A donor or fundraising pyramid helps nonprofits set and visualize their goals based on data. A data-driven pyramid can help reveal patterns and target the correct prospects to meet your campaign’s goal. 

Focusing on your campaign will always deliver a better ROI (return on investment) than selecting random prospects to target in the hopes of meeting your goal. 

We are huge fans of segmentation here at Driven because it gets results. Look at the demographics and giving history of your donors and decide the best way to segment your prospects. Then you can break up the campaign into goals for each tier based on past giving patterns. 

A Modern Approach to the Donor Pyramid

A traditional donor pyramid is used to track the donor cycle with the expectation that all donors go through the same journey. It assumes that to climb the donor pyramid, a donor will have to go through each tier to reach the top. We know now that’s not the case. Donors are people, and people are complex. It is possible to climb the pyramid chronologically, but so is jumping between tiers in no particular order. 

Some nonprofits may have relied on the donor pyramid as a donor lifecycle map, but it’s not. Donors can move around the pyramid, and depending on your supporters, their donor journey could be anything but linear. So use a donor pyramid as a guide to set goals instead of a concrete representation of a donor journey. 

With that being said, let’s get into it! 

How Do You Make a Donor Pyramid Chart?

Step 1: Set A Fundraising Goal

The first thing you need to do before building your pyramid is deciding how much you have to raise, what tiers you will use, and how many donations from each tier you will need to reach that goal. 
 
Use a Donor Pyramid Calculator As a Guide
Use a gift range calculator like this one to create an estimate on your different tiers. It’s not perfect, so you may have to tweak it to fit your campaign better. Put in your goal for the campaign, and it will give you an estimate of the different levels of donations you need to reach it. 

Step 2: Adjust Giving Levels

This is where you will fine-tune your fundraising tiers to best suit your nonprofit’s campaign. You know your donors best, and if you have a lot more monthly donors than annual donors, it may be better to adjust your goals to work to acquire more recurring gifts.  Or if you have a lot of one-time gifts and no monthly donor strategy, consider developing one that works to upgrade your one-time donors into monthly - or that targets your current monthly donors to upgrade their recurring amounts. 

It doesn’t have to be super specific either. You can use ranges like $1-100 or $5,000-8,000. Don’t forget to refer to your database to review giving levels to see what realistic donation amounts are and work forward from there. 

Step 3: Make Your Pyramid!

Now it’s time to take the ranges you came up with in steps 1 and 2 to create your donor pyramid. Use our template or make your document and review your goals. 

If you do some digging in your database and find that you have a goal of 3 $20,000 gifts but only one prospect that would be interested in that type of donation, it may not be a realistic goal for you. 

You can identify prospects using the RFM (recency, frequency, monetary value) method, or by keeping an ongoing segment of major donors.
 

How to Implement the Fundraising Pyramid to Your Campaign

Predicting how you will reach your fundraising goal makes it easier to meet and excel at your milestones. With your targeted campaign, you can set not only ambitious goals but also exceed them. Follow these steps after creating your data-driven donor pyramid:
  1. Segment and target those donors who are apt for your campaign. Annual fund campaigns, for instance, can focus on prospects who have the highest inclination and capacity for this type of gift.
  2. Evaluate your donors to see which ones will be most effective for your campaign.
  3. Set your budget based on the number of donors you would like to include or include deciles based on your campaign budget.
  4. You can go down the list of donors until you meet and exceed your campaign goals

Conclusion

When using a donor pyramid, there are two primary goals: increasing revenue and building a more intelligent campaign strategy. To get the most out of your efforts, you have to have a robust donor management system. 

At its core, the fundraising pyramid is a visual representation of your donor group and their giving patterns. Each organization has a unique group of supporters, and the only way to understand their giving habits is to test, track and evaluate. 

Driven is an all-in-one platform specializing in keeping a clean and efficient database which means smarter segmentation and better fundraising results. Learn more at trustdriven.com/contact.

Get Our Monthly Newsletter

Be the best non-profit you can be, get our tricks and useful podcast interviews direct to your inbox.

Donor Relations Apr 16, 2021, 12:00 AM

Similar Posts

Technology

Friday,15 October, 2021

3 Nonprofit CRM Tips to Optimize Productivity
  Customer relationship management systems (CRMs) have become standard in the nonprofit industry, and for a good reason. No excel sheet can do what they do. A robust CR...
Technology

Friday,10 July, 2020

How to Tell Your Nonprofits Story in Your Donation Receipt
Donation receipts are a normal part of your organization’s operations. Still, with a little creativity and some tweaks to your template, you can turn it into an excellent ...
Technology

Monday,16 March, 2020

These Online Conferencing Services Will Help Your Nonprofit Work Remotely During COVID-19
    With the recent updates regarding COVID-19 a lot of organizations are choosing to cancel big public events and conferences for good reasons. Some are even deciding...

Check out the most powerful Non-profit Software in The World