Why Nonprofits Should Use Donation Tiers?
When you tailor donation tiers to your audience, you boost donations and can even increase the average amount given. Donation tiers incentivize giving by offering a reward and instant gratification.
But don’t take our word for it:
- A study from The University of Chicago found that setting a “low bar” for your default donation dramatically increases the amount individual donors are likely to give.
- Giving your donors the ability to see what their money is doing has a positive effect on how those people see your organization and how they feel about themselves!
- Charitable giving is actually “contagious” and has a built-in competitive nature that spurs some individuals to “keep up with the Joneses”.
What Are Donation Tiers?
Consider a donation tier as a micro-goal that offers an immediate reward for the donor. You can apply a suggested level of giving from which your donors may choose, paired with an appropriate “reward” to entice them to open their purse strings. Those rewards can be tangible things—such as tier exclusive giveaways—or something as simple as a “title” that you bestow upon them in relation to your fundraising.
Donation Tier Dos and Don’ts
If you’re new to the idea of creating donation tiers, here are a few quick tips to make the most of your fundraising efforts.
- Limit your donation tiers to 4-6. This allows your donors to easily select between a few options and minimizes the risk of overwhelming them. It also reduces any “guilt” about choosing a lesser donation tier.
- Keep your tiers simple. This goes for everything from the tier descriptions to the reward scales. If you make the giving process too complicated, you’ll limit your potential donors.
- Find your “average donation” from previous fundraisers and base all of your tiers on that. Give donors a tier or two lower and a tier or two higher. Consider creating an “Angel Tier” as well for donors who want to make a big buy-in.
- Clearly state the impact and reward of each tier. To do that, assess the “value” of a given donation tier accordingly.
Now that you’ve got the basics, let’s look at some types of donation tiers that can boost your donor’s generosity and tap into the competitive nature of charitable giving.
5 Types of Donation Tiers That Incentivize Donors
These are five common donation tiers that nonprofits and other organizations have used successfully to help them incentivize donors and chip away at those big fundraising goals. Use any of these types of tiers in your fundraising efforts but be mindful to match your tiers with the type of organization you are and the type of donors you’re trying to reach.
1) Emotional Bribery (in a Good Way)
As mentioned above, multiple psychological studies have shown that people get emotionally involved when donating. The positive emotional response donors experience is not only very real and very measurable, but also enormously powerful.
If you can create donation tiers that isolate that “good feeling of giving,” you can help your donors feel good while doing good.
- Local food drives that show donors how many meals their money will buy
- Gift-giving drives that equate a certain donation with a toy for a child
- Fuel assistance programs that equate donation tiers with keeping in-need families warm
The YMCA has used this type of tiered-donation method for years to equate charitable donations with an individual child’s ability to go to summer camp for a week during their annual Send a Kid to Camp drive.
The key concept behind this type of donation tier is that it converts an impersonal financial donation into a direct personal benefit for an individual in need. Donors aren’t just forking over cash to a faceless organization. They’re helping real people and families.
2) Tangible Exclusives
Sometimes people give because they want to get. There is nothing wrong with that. Indeed, many crowdfunding operations and individual artists have tapped into the profitable “Exclusive Unlock” donation tier methods to raise the money they need to produce finished products.
This type of donation tier relies upon “giving” tangible rewards in connection with donation tiers. For example, HasLab (a division of the Hasbro Toy Company) has successfully crowdfunded multiple Star Wars related toys by giving donors tier-locked exclusives, including one-of-a-kind action figures as rewards.
Similarly, comics creators have successfully used tier-based unlocks such as exclusive pages, posters, and one-of-a-kind art on sites like Patreon to fund entire print runs on independent graphic novels.
You can tweak that same methodology to your specific organization by providing tangible unlocks that your donors will enjoy. The key to success with this donation tier type is to make the reward “worth” the financial investment without cutting into the profit generated by the donation. Something as simple (and affordable) as organization-branded swag is often enough.
3) Time Waits for No Donation
When you’re trying to entice a potential donor to give, there is nothing wrong with applying a little pressure. Time-based donation tiers are a great way to stimulate generosity by tapping into the competitive nature of donors.
This type of donation tier equates monetary value to a period of time. Essentially, donors get to see just how long their donation will support the receiving organization.
Ronald McDonald House Charities has been using this format for years by informing donors that for every $80 dollars given a family in need can stay 1 night at a Ronald McDonald House.
This tier structure entices additional giving because generous people want to support organizations for as long as they can. Plus, it specifically calls out exactly how their donation will be used.
4) Recognition as a Reward
Donors are, by definition, generous people. But that doesn’t mean stroking their ego a bit won’t help them decide how much to give. Publicly recognizing your donors can go a long way toward increasing donation amounts and generating repeat or continuous support.
This is especially true when dealing with business donors and sponsors. Many times such companies will see the donation as a marketing investment or a token of goodwill toward the community.
How can you recognize donors?
- Offer to display sponsors’ names prominently on your marketing material, in your newsletters, or in any press you generate.
- Send a “thank you” letter to all donors at the end of your fundraising process and call out especially generous individuals and corporations.
- Include a representative of a donor organization in your live events (dinners, award ceremonies, sporting events, etc.)
The key to success with this donation tier method is tailoring recognition levels to specific donors.
Can’t afford tangible rewards? Sometimes a title is just as good. Consider giving away titles and labels. They don’t cost you a thing but can have an immeasurable impact on the people who give.
The ASPCA urges all donors to become monthly donors and labels all such donors as Heroes because their regular donation allows them to spend less time fundraising and more time rescuing animals from cruelty and abuse. What’s more heartwarming than becoming a Hero to poorly treated and defenseless animals?
Plucking the Right Heartstrings with Donation Tiers
These five types of donation tiers aren’t the only ones out there. They’re just the most common and (likely) the most effective. Pick and choose from any giving level to create a donation program specifically tailored to your organization and the types of donors you’ll be targeting. Get your donors invested, excited, and help them feel good about doing good with a donation tier set up specifically for them.