While Procter & Gamble used to aim its marketing at the huge middle class, now it is changing many of its products and the way they are sold, because many formerly middle class shoppers are trading down to lower-priced goods. At the same time, upper income customers are not skimping on more expensive items. So P & G is now marketing to the top and the bottom of the consumer continuum, while targeting less towards the middle.
Does this have relevance for fundraising? Absolutely. It can’t help but affect the type and sizes of gifts that nonprofit organizations can depend on now and in the future. We share the same markets with P & G and every other organization that wants dollars from the public.
We see a number of nonprofits doing very well with “high-dollar” donors ($100 to $1,000 and above) and not so well with more moderate gifts ($35 to $99). That’s why many organizations, especially those with membership programs, offer discounted “asks” such as $25 and below. This allows those people who are watching their wallets to still give t
o their favorite charities. We need to take this into account when doing acquisition campaigns and asking for additional gifts.
Target your prospects and donors based on the amount of their previous donations or purchases if you’re using rental lists, and apply demographic overlays to those on your own file.
I’m guessing you’ll find a lot of “ex-middle classers” and unemployed in your lapsed donor files.
CBA is planning a study of lapsed donors and members to see if this assumption is correct.
Health and advocacy organizations such as The March of Dimes and the Red Cross that normally ask for small gifts are probably not as negatively impacted by these donor trends.
Please share your fundraising experiences regarding these shifts caused by the economy and the shrinking middle class.