I gave to your nonprofit, so what do I get?
May 22, 2018 2:56 PM Subscribe
Looking to merge our separate management of "membership" and "donor" processing. Do you work for a nonprofit that provides benefits to donors? How do you manage changing benefit levels for donors who give more than once in a year? Or: Do you donate to a nonprofit that provides benefits based on your level of giving? How does it work? Seeking resources and just not finding them.
Seeking orgs and/or online resources--or even more targeted forums for this question--for more info about how nonprofits with giving levels manage their benefit/membership models. Specifically interested in those that base level of benefit on total donations in the last year.
We want to shift our donor model to give perks based on total giving in the last year (365 days). Currently we have a messy division of "membership" and "donations," which creates confusion and demands simplification. For instance, Bob buys a $100 annual "membership" and gets perks associated with that level of giving. If a few months later he gives another $100, this should bump him to a new level. We want to do away with the division between "membership" and "donation" and call it all "donor support," where the benefits we provide are based entirely on the total gifts given in the last 365 days. Is this done?
The problem is how to manage the messaging re changing expiration dates and levels. Right now, they get a paper acknowledgment for every donation, so telling a donor of their "current" benefit level is no problem. But as time passes and that "Last 365 days" total changes, shifting donors to different benefit levels, we don't know how to manage the ever-changing benefit levels. We aren't going to send new letters, or even emails, every time the level (or expiry date) changes. If you are party to this kind of model, how do you manage it and/or what are your expectations as a donor? What other orgs use this kind of model? Where can I learn more?
A couple things of note: Our donors don't have logins, aren't largely web savvy and tend not to prefer email. Some of the benefits are for an annual event, and so we'd look at "Last 365" just before the event to determine what they receive.
Seeking orgs and/or online resources--or even more targeted forums for this question--for more info about how nonprofits with giving levels manage their benefit/membership models. Specifically interested in those that base level of benefit on total donations in the last year.
We want to shift our donor model to give perks based on total giving in the last year (365 days). Currently we have a messy division of "membership" and "donations," which creates confusion and demands simplification. For instance, Bob buys a $100 annual "membership" and gets perks associated with that level of giving. If a few months later he gives another $100, this should bump him to a new level. We want to do away with the division between "membership" and "donation" and call it all "donor support," where the benefits we provide are based entirely on the total gifts given in the last 365 days. Is this done?
The problem is how to manage the messaging re changing expiration dates and levels. Right now, they get a paper acknowledgment for every donation, so telling a donor of their "current" benefit level is no problem. But as time passes and that "Last 365 days" total changes, shifting donors to different benefit levels, we don't know how to manage the ever-changing benefit levels. We aren't going to send new letters, or even emails, every time the level (or expiry date) changes. If you are party to this kind of model, how do you manage it and/or what are your expectations as a donor? What other orgs use this kind of model? Where can I learn more?
A couple things of note: Our donors don't have logins, aren't largely web savvy and tend not to prefer email. Some of the benefits are for an annual event, and so we'd look at "Last 365" just before the event to determine what they receive.
I personally think you should focus on providing a way to "upgrade" your membership, but make it so that the result is that the donor has a specific membership, at a specific level, that expires at a specific time, and it will expire completely instead of downgrade at that point, unless the donor donates again to renew it.
(sorry, wanted to add this but didn't want to abuse the edit window)
posted by Aleyn at 3:31 PM on May 22, 2018
(sorry, wanted to add this but didn't want to abuse the edit window)
posted by Aleyn at 3:31 PM on May 22, 2018
Response by poster: Adding clarification re Aleyn's second post where "the donor has a specific membership, at a specific level, that expires at a specific time, and it will expire completely instead of downgrade at that point, unless the donor donates again to renew it."
this is exactly how we do things now.
The result is that we have times where Bob joins at $100. Then donates another $100 a few months later. Then maybe another $30 at some special event a few months after that. The "upgrade" you refer to is where we want to go, where he can keep bumping up his benefit level and the cumulative giving in the last 365 days determines the level of benefits. If we have a fixed end date for benefits, then what happens when he donates another $50 the month before that end date? There is no way when it comes down to it to have a fixed end date for benefits unless we keep defining memberships and donations as two separate things, which presents more issues.
I do completely agree we don't want to trade one set of confusion for another!
posted by AnOrigamiLife at 3:49 PM on May 22, 2018
this is exactly how we do things now.
The result is that we have times where Bob joins at $100. Then donates another $100 a few months later. Then maybe another $30 at some special event a few months after that. The "upgrade" you refer to is where we want to go, where he can keep bumping up his benefit level and the cumulative giving in the last 365 days determines the level of benefits. If we have a fixed end date for benefits, then what happens when he donates another $50 the month before that end date? There is no way when it comes down to it to have a fixed end date for benefits unless we keep defining memberships and donations as two separate things, which presents more issues.
I do completely agree we don't want to trade one set of confusion for another!
posted by AnOrigamiLife at 3:49 PM on May 22, 2018
I work in individual giving/membership fundraising, but I'm a little confused by the question. Are you trying to ask how you should let people know when they are at a new level of membership? Or are you trying to figure out how to track this internally?
If it's the former, why wouldn't you just let them know with their thank you letter? You are sending thank you letters (or emails, if it's an online donation) with every gift, yes? If not, then that's the first thing to start doing. But if you are, it seems easy to just let people know, "hey, your most recent gift puts you at this Super-Awesome Gold Member Status, which gives you these benefits!"
I would also urge you to not make the benefit tiers too confusing for members. There's a reason most organizations do it by calendar year - it's not just easier for orgs, it's easier for members. And it's nice to recognize people who give at higher levels, but if you have too many levels, it gets confusing, and confusion leads to things like people thinking they should be at a higher level than they are and feeling ripped off. Not great.
If this is more about how to track this internally: it'll depend on your database, but most CRMs should have a way you can do conditional tagging. ie, you can code things so that someone who has given $500 in the past 365 days automatically gets tagged with a specific membership type. If you don't have this expertise on staff, you may have to hire someone to do it.
And this is sort of a side note, but in general, you want your giving to be as mission-driven as possible, as that is, for most orgs, going to be more valuable than whatever benefits you can offer. I mean, people like NPR tote bags, but it's not the only reason people give, right? If you make the membership levels really complex and different, it can be easy for your fundraising team to focus on administering those at the expense of mission-based relationship-building with donors.
posted by lunasol at 4:16 PM on May 22, 2018 [1 favorite]
If it's the former, why wouldn't you just let them know with their thank you letter? You are sending thank you letters (or emails, if it's an online donation) with every gift, yes? If not, then that's the first thing to start doing. But if you are, it seems easy to just let people know, "hey, your most recent gift puts you at this Super-Awesome Gold Member Status, which gives you these benefits!"
I would also urge you to not make the benefit tiers too confusing for members. There's a reason most organizations do it by calendar year - it's not just easier for orgs, it's easier for members. And it's nice to recognize people who give at higher levels, but if you have too many levels, it gets confusing, and confusion leads to things like people thinking they should be at a higher level than they are and feeling ripped off. Not great.
If this is more about how to track this internally: it'll depend on your database, but most CRMs should have a way you can do conditional tagging. ie, you can code things so that someone who has given $500 in the past 365 days automatically gets tagged with a specific membership type. If you don't have this expertise on staff, you may have to hire someone to do it.
And this is sort of a side note, but in general, you want your giving to be as mission-driven as possible, as that is, for most orgs, going to be more valuable than whatever benefits you can offer. I mean, people like NPR tote bags, but it's not the only reason people give, right? If you make the membership levels really complex and different, it can be easy for your fundraising team to focus on administering those at the expense of mission-based relationship-building with donors.
posted by lunasol at 4:16 PM on May 22, 2018 [1 favorite]
I have worked for and donated to a lot of non-profits and think you are overly complicating this with a rolling 365 model instead of fixed dates. By not having fixed end dates, donors have no idea what benefit level they're at at any given time and may need to be told that their donation was 376 days ago and therefore they've been dropped a benefit level. The thing you're trying to engineer around - donors not being given access based on a date they're just out of range for - is going to happen and will just be more opaque.
Annualized giving is a norm - we give to a local museum and they give us a membership for the tax year that our donation is eligible for. We also give to a couple of orgs who provide us tickets to the next big gala thing but it's not a "status" thing - they just keep a list of who gave a certain amount and invite them. Those models are great and a lot more donor friendly imo than a matrix.
Honestly though, this should be provided to your members and donors as a survey - what they want and what motivates them. Rather than creating a complex system in isolation, figure out what matters to them and try to provide the simplest solution to provide that to them.
posted by notorious medium at 4:29 PM on May 22, 2018
Annualized giving is a norm - we give to a local museum and they give us a membership for the tax year that our donation is eligible for. We also give to a couple of orgs who provide us tickets to the next big gala thing but it's not a "status" thing - they just keep a list of who gave a certain amount and invite them. Those models are great and a lot more donor friendly imo than a matrix.
Honestly though, this should be provided to your members and donors as a survey - what they want and what motivates them. Rather than creating a complex system in isolation, figure out what matters to them and try to provide the simplest solution to provide that to them.
posted by notorious medium at 4:29 PM on May 22, 2018
Response by poster: Lunasol: Not a problem tracking internally. We do let donors know via the thank you letter. This is exactly what we do. It's how to handle the change when a donation "drops off" the back end of that 365-day mark, and lowers their level.
I think notorious medium is probably right that the rolling idea complicates things. The 365-day idea was the strongest alternative we came up with to reward donors for increased giving--with that "dropping off the back end" issue a problem yet to solve. We've considered a calendar-year model and couldn't get past the guy who gave us $1000 in, say, October, November, December: how do we tell him in January that he's not eligible for any benefits? That's the kicker. And this needs to be automated, none of this "oh Joe, well you're an exception." And why I'm hoping to learn more about how other orgs operate.
Are there any nonprofit forums out there where I could post this question and/or read similar?
This is really valuable feedback, thanks everyone and please keep it coming!
posted by AnOrigamiLife at 4:57 PM on May 22, 2018
I think notorious medium is probably right that the rolling idea complicates things. The 365-day idea was the strongest alternative we came up with to reward donors for increased giving--with that "dropping off the back end" issue a problem yet to solve. We've considered a calendar-year model and couldn't get past the guy who gave us $1000 in, say, October, November, December: how do we tell him in January that he's not eligible for any benefits? That's the kicker. And this needs to be automated, none of this "oh Joe, well you're an exception." And why I'm hoping to learn more about how other orgs operate.
Are there any nonprofit forums out there where I could post this question and/or read similar?
This is really valuable feedback, thanks everyone and please keep it coming!
posted by AnOrigamiLife at 4:57 PM on May 22, 2018
The simplest solution for this if you absolutely insist on this way of recognizing gifts/benefits is to simply give the benefit out based on last year's giving. If John Smith gave $1,000 last year, he gets the $1,000 level benefits THIS year. If he only gives $500 this year, he gets the $500 benefits NEXT year.
You have obviously figured out that offering benefits at all makes receipting very complicated, especially when membership and benefits are rolling and those benefits change by gift amount on a rolling basis. Any given donor could join, go up, down, or lapse on any day over the course of a year, and the only way to track it is to run reports on giving every single day to keep up with it. That is why most organizations are clear about separating memberships that include benefits from donations.
You don't mention why you want to combine them - it actually makes your job more complicated administratively, and requires you to change the way you receipt gifts. This is because gifts that include eligibility for a benefit (whether used by the donor or not) are required to be recorded and receipted as minus the fair market value of that benefit, and as nonprofits, we must provide the donor with the FMV for that benefit at the time of receipt.* That means you'll have to not only receipt for every gift, but have to also issue an updated receipt for all previous gifts, and how the FMV of goods/services has changed based on the amount if applicable. Plus, many donors want their full deduction, so are irritated when their charitable gifts get lumped into benefits-eligible buckets. Don't do this without at least telling your donors first! Making a unilateral move like this will make many of your donors quite unhappy.
I could probably give you more info and comparables to what other organizations are doing if you can talk about what the benefits are. I consult on this topic for a living and am happy to help if you can provide more info. Feel free to MeMail me.
*The exception is a "token gift," which is defined as a small item with your org's logo or name on it that falls under a value amount determined by the IRS every year.
posted by juniperesque at 6:16 PM on May 22, 2018 [2 favorites]
You have obviously figured out that offering benefits at all makes receipting very complicated, especially when membership and benefits are rolling and those benefits change by gift amount on a rolling basis. Any given donor could join, go up, down, or lapse on any day over the course of a year, and the only way to track it is to run reports on giving every single day to keep up with it. That is why most organizations are clear about separating memberships that include benefits from donations.
You don't mention why you want to combine them - it actually makes your job more complicated administratively, and requires you to change the way you receipt gifts. This is because gifts that include eligibility for a benefit (whether used by the donor or not) are required to be recorded and receipted as minus the fair market value of that benefit, and as nonprofits, we must provide the donor with the FMV for that benefit at the time of receipt.* That means you'll have to not only receipt for every gift, but have to also issue an updated receipt for all previous gifts, and how the FMV of goods/services has changed based on the amount if applicable. Plus, many donors want their full deduction, so are irritated when their charitable gifts get lumped into benefits-eligible buckets. Don't do this without at least telling your donors first! Making a unilateral move like this will make many of your donors quite unhappy.
I could probably give you more info and comparables to what other organizations are doing if you can talk about what the benefits are. I consult on this topic for a living and am happy to help if you can provide more info. Feel free to MeMail me.
*The exception is a "token gift," which is defined as a small item with your org's logo or name on it that falls under a value amount determined by the IRS every year.
posted by juniperesque at 6:16 PM on May 22, 2018 [2 favorites]
One thought might be to pro-rate the existing membership as a contribution to an entirely new membership, so that if someone donated $100 6 months ago for a yearly membership, they get $50 "credit" towards the new membership tier if they then donated more at a later date, and the membership would be reset to expire in 12 months from the latest donation date. Bit more complicated, and I'm not sure how well it'd work in practice, but it at least makes it so that your notifications are always associated with a donation event.
posted by Aleyn at 6:20 PM on May 22, 2018
posted by Aleyn at 6:20 PM on May 22, 2018
Ah, thanks for the clarification. This is one of the reasons lots of arts organizations have seasons. People know they give a certain amount for a certain season and that secures their benefits for that season.
But also, at most membership-based organizations, the membership levels only go so high, and it's partly for this reason. If you have membership levels that go up to, say, $1500, and someone gives $1500 on December 31, they're going to be miffed that they don't get those benefits next year. The alternative is that your membership levels go up to, say $500, and then you do deeper engagement with the people at that top tier of membership to ask them to give at higher levels, which includes access to things like private events based on their interest. I hope that makes sense.
Are there any nonprofit forums out there where I could post this question and/or read similar?
I really like the Nonprofit Happy Hour Facebook group for questions like this. Lots of smart, thoughtful fundraising professionals.
posted by lunasol at 7:37 PM on May 22, 2018
But also, at most membership-based organizations, the membership levels only go so high, and it's partly for this reason. If you have membership levels that go up to, say, $1500, and someone gives $1500 on December 31, they're going to be miffed that they don't get those benefits next year. The alternative is that your membership levels go up to, say $500, and then you do deeper engagement with the people at that top tier of membership to ask them to give at higher levels, which includes access to things like private events based on their interest. I hope that makes sense.
Are there any nonprofit forums out there where I could post this question and/or read similar?
I really like the Nonprofit Happy Hour Facebook group for questions like this. Lots of smart, thoughtful fundraising professionals.
posted by lunasol at 7:37 PM on May 22, 2018
Response by poster: Lots of interesting stuff here, thanks all. I will def check out that Facebook group. Prorating sounds like a complete nightmare, Aleyn, no way that would fly.
And juniperesque: the benefits are, for the most part, tickets to our big annual event (how many depends on what benefit level you're at--we have six levels, from $50 to $1000+), plus membership discounts on classes and programs and in our store. The highest levels get some VIP invites. The big event is in the fall, so that throws a wrench in some scenarios (e.g. if we say membership is a calendar year, and someone gives in November, then it's only good for six weeks, and they don't get event bennies the next year? or we address that by saying anyone who gives after the event automatically gets the rest of the year plus the next calendar year's benefits? we've kicked that one around too).
We want to combine "memberships" and "donations" to to simplify our processes, so they're all just donations. So we're only entering one kind of donation and using one kind of letter, and so multiple donations within the same year don't create confusion ("he bought a $100 membership, but ultimately gave us $300 more in general donations, so does that change his benefits?). We need to spend less time processing gifts, we want an easier way of communicating who gets what, and we want to run simpler reports that include our entire donor base. We have rollup fields that give us things like "Total Gifts Last 365 Days" or "Total Gifts This Year" etc (which can if we like dictate the values in other custom fields). At a glance we can know who is at what level at any time.
posted by AnOrigamiLife at 9:39 PM on May 22, 2018
And juniperesque: the benefits are, for the most part, tickets to our big annual event (how many depends on what benefit level you're at--we have six levels, from $50 to $1000+), plus membership discounts on classes and programs and in our store. The highest levels get some VIP invites. The big event is in the fall, so that throws a wrench in some scenarios (e.g. if we say membership is a calendar year, and someone gives in November, then it's only good for six weeks, and they don't get event bennies the next year? or we address that by saying anyone who gives after the event automatically gets the rest of the year plus the next calendar year's benefits? we've kicked that one around too).
We want to combine "memberships" and "donations" to to simplify our processes, so they're all just donations. So we're only entering one kind of donation and using one kind of letter, and so multiple donations within the same year don't create confusion ("he bought a $100 membership, but ultimately gave us $300 more in general donations, so does that change his benefits?). We need to spend less time processing gifts, we want an easier way of communicating who gets what, and we want to run simpler reports that include our entire donor base. We have rollup fields that give us things like "Total Gifts Last 365 Days" or "Total Gifts This Year" etc (which can if we like dictate the values in other custom fields). At a glance we can know who is at what level at any time.
posted by AnOrigamiLife at 9:39 PM on May 22, 2018
I was going to suggest the same idea you mentioned - count all donations given in a calendar year with donations given in the last three months double counting for both the current year and the coming one.
Another simple option is to set your donation year as starting the day after (or first of the month) after your fall event and then cumulate for 12 months. So a donation just before the event, still gives them the extra tickets and benefits for the event, everything later counts towards the following year. As long as you are very clear, donors will know what to expect. Also, this will allow people who make donations at the end of the year to get almost a full year of benefits.
posted by metahawk at 10:37 PM on May 22, 2018
Another simple option is to set your donation year as starting the day after (or first of the month) after your fall event and then cumulate for 12 months. So a donation just before the event, still gives them the extra tickets and benefits for the event, everything later counts towards the following year. As long as you are very clear, donors will know what to expect. Also, this will allow people who make donations at the end of the year to get almost a full year of benefits.
posted by metahawk at 10:37 PM on May 22, 2018
I've done a fair amount of work on membership models (within public media) and recommend the Membership Puzzle as a resource for you.
posted by melodykramer at 7:29 AM on May 23, 2018 [2 favorites]
posted by melodykramer at 7:29 AM on May 23, 2018 [2 favorites]
If you're additionally interested in the nitty-gritty legality stuff related to gift processing, IRS tax law issues, etc., check out the AASP. They have a listserv, too, and you don't have to be a member to join. I lurked on the listserv for 3+ years before I ever said anything and learned more in those three years than I did in grad school.
posted by juniperesque at 8:29 AM on May 23, 2018
posted by juniperesque at 8:29 AM on May 23, 2018
This thread is closed to new comments.
posted by Aleyn at 3:26 PM on May 22, 2018