Effects of Donor Priority Strategy on Relationship Fundraising Outcomes

Nonprofit organizations commonly implement donor priority strategies, yet little research has explored the effects of this relationship strategy. Whereas previous research highlighted the positive effects of benefit segmentation and analyzed donor motives to choose a specific donation level, this study investigates the effects of priority benefit perception on relationship factors such as donor satisfaction, donor loyalty, upgrade/downgrade intentions, and voluntary behavior. Based on data from the German cultural sector—804 donors of a friend circle that differentiates two donation levels—the results of the partial least squares path analysis show that donors' perception of priority benefits positively affects donor satisfaction and donor loyalty. The study also shows that a priority strategy negatively influences intentions to downgrade among higher‐prioritized donors and positively enhances intentions to upgrade among lower‐prioritized donors. Applying multigroup comparison the authors find that most relationship effects do not differ significantly across higher‐ and lower‐prioritized donors. This study thereby supports the implementation of donor priority strategy among cultural organizations because of its advantages for developing strong relationships with donors of all levels. Several managerial recommendations are given; for example, managers should better implement only a few instead of a large number of donor levels, should determine carefully which benefits to offer at the different levels, and analyze the donor base in order to identify donors with strong potential for upgrading.