What’s wrong with the donor pyramid

This used to be considered a powerfully illustrative picture of a typical donor file:

Donorpyramid

It’s pretty accurate of most files, though if it were shaped like the actual numbers of donors, it would look more like a side view of a sombrero.

A donor pyramid tells you a very basic truth: You have more donors who give lower amounts than who give higher amounts.

Duh.

Sometimes that is helpful, especially if you show a companion pyramid of how much revenue is coming from which donors. That one will be an upside-down pyramid. It can awaken people to the lopsided nature of donor files, and help them be smarter about how they spend their time and money on which donors.

The problem that often comes along with the donor pyramid is the impression that it shows a typical donor journey: That donors start at the bottom and work their way to the top. In fact, I’ve been to presentations that implied “climbing” is exactly what happens, and that our job is to encourage all donors on their upward climb.

That has enough truth in it to be dangerous. Mostly, it’s insanely inaccurate. If you think climbing the pyramid is a typical donor journey, you may target and cultivate donors in expensively useless ways.

Here’s how donors behave on most real donor pyramids:

  • Most donors stay exactly where they are on the pyramid for their entire stay with an organization.
  • Some move up, most of them by one or two levels.
  • Nearly as many donors move down the pyramid as move up — mostly by a level or two.
  • There are some donors who join your file near the bottom and eventually reach the top. Their number is tiny, but their financial impact is important.
  • Bequest donors, who are often placed at the top of the pyramid because of their outsized impact, can come from any level of the pyramid.

The pyramid is a snapshot of the way your file looks — from a number-of-donors perspective — at any given moment.

A real donor file is not much like a massive ancient edifice of stone. It’s more of a seething, organic thing that can grow, shrink, or even die. Like this:

Donorpond

(Created years ago at the Domain Group by the great Mark Oehlschlaeger.)

Thinking of your file like this makes it clearer what’s going on. It captures the importance of the way donors move around — not just climbing upward:

You see that you need to have as many coming in as are leaving — or better yet, more coming in. You also see how important it is to reduce donor lapsing — just as (or even more) important than new donor acquisition.

And it captures the truth that there are several “upward” journeys for donors:

  • Many donors will stay in that large group of general donors. For them, the journey you want is for them to stay with you as long as possible.
  • A few will become major donors, but a lot more will become mid-value donors — which can be an extremely important source of income.
  • The most common form of upgrading, available to almost any donor, is monthly giving.
  • Some will leave you in their will. And their impact will be extremely high.

This picture tells us more about what’s really going on with a donor file. The pyramid is okay … but only tells you a couple of things you can act on.


Comments

4 responses to “What’s wrong with the donor pyramid”

  1. Jerold Kappel Avatar
    Jerold Kappel

    Thank you for this article. I have believed for years that the donor pyramid is unrealistic. The real concern is the “lopsided nature of donor files.” The loss of even one major donor can have an outsize negative effect on contributed revenue overall. What I have observed is the loss of a major donor’s contribution cannot be made up from an expanding donor base or increased giving from other majors, who most likely have already determined their contributions for the year. The 80/20 rule is also outdated, yet seems to persist. My experience, and of many of my colleagues, is that it is more 90/10, or even 95/5. This reflects the socio-economics of our nation as a whole with a concentration of wealth in the 1% and a shrinking middle class.
    Excellent article.

  2. Jerold Kappel Avatar
    Jerold Kappel

    Thank you for this article. I have believed for years that the donor pyramid is unrealistic. The real concern is the “lopsided nature of donor files.” The loss of even one major donor can have an outsize negative effect on contributed revenue overall. What I have observed is the loss of a major donor’s contribution cannot be made up from an expanding donor base or increased giving from other majors, who most likely have already determined their contributions for the year. The 80/20 rule is also outdated, yet seems to persist. My experience, and of many of my colleagues, is that it is more 90/10, or even 95/5. This reflects the socio-economics of our nation as a whole with a concentration of wealth in the 1% and a shrinking middle class.
    Excellent article.

  3. Agree with what you’ve said Jeff. It’s a snapshot, and a pretty lopsided one at that. More important in our digitally revolutionized world is that the lion’s share of donors won’t necessarily continue to come in via direct mail. Managing the process is no longer so linear. I like your drawing. I also like my “donor vortex” or “whirlpool” model, where donors are a swirling mass of energy. Your organization is the eye of the storm. It’s magnetic enough to draw them in, or dull enough to cast them out. And they’ll come in and out, if you’re lucky, over time. See https://clairification.com/2013/11/05/why-your-nonprofit-should-get-a-whirlpool/

  4. Agree with what you’ve said Jeff. It’s a snapshot, and a pretty lopsided one at that. More important in our digitally revolutionized world is that the lion’s share of donors won’t necessarily continue to come in via direct mail. Managing the process is no longer so linear. I like your drawing. I also like my “donor vortex” or “whirlpool” model, where donors are a swirling mass of energy. Your organization is the eye of the storm. It’s magnetic enough to draw them in, or dull enough to cast them out. And they’ll come in and out, if you’re lucky, over time. See https://clairification.com/2013/11/05/why-your-nonprofit-should-get-a-whirlpool/

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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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Jeff BrooksJeff Brooks has been serving the nonprofit community for more than 35 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com. More.


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The future of fundraising is not about social media, online video, or SEM. It’s not about any technology, medium, or technique. It’s about donors. If you need to raise funds from donors, you need to study them, respect them, and build everything you do around them. And the future? It’s already here. More.

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About the blogger

Jeff Brooks has been serving the nonprofit community for more than 30 years and blogging about it since 2005. He considers fundraising the most noble of pursuits and hopes you’ll join him in that opinion. You can reach him at jeff [at] jeff-brooks [dot] com.