Defining Monetary Tiers: A Clear and Actionable Method for Fundraising Analysis

Monetary is the only subjective measure in the RFM+T framework. Recency, Frequency, and Tenure can be interpreted the same way across countries and cause types, but Monetary depends heavily on your local currency, donor base, and fundraising environment. A cancer charity, a children’s charity, and an animal welfare organization might all see different giving levels, even within the same country.

The purpose of the Monetary dimension is not to impose universal thresholds. It is to create tiers that make sense for your organization so you can interpret donor value consistently and make better strategic decisions. The method below gives you a simple, practical way to define Monetary tiers using your own data.

1. Start with the Donors Who Matter Most Today

Begin with donors who have made at least one donation in the last five full calendar years. Donation amounts from 10 or 15 years ago rarely reflect current giving behavior. Restricting the pool in this way ensures your Monetary tiers are based on the donations that matter most for decision making today.

This five-year pool becomes the foundation for all remaining steps.

2. Identify Your Elite Tier (Top Revenue Contributors)

Once the five-year pool is defined, the next step is to determine the top range of giving within that specific pool. The Elite tier should represent donors whose gifts sit clearly at the top of this dataset. In the example used later in this post, the Elite threshold begins at 1,000+.

A practical, data-driven way to define your Elite tier is:

• Sort all donations from highest to lowest

• Add a running total of revenue

• When the running total reaches approximately 20 percent of your five-year revenue, stop

• The smallest donation in that group becomes your Elite Threshold

All donations at or above this amount form the Elite tier.

This gives you a clear, organization-specific cutoff with strategic meaning.

This is different from identifying donors for personal one-to-one communication. That process depends on your capacity, and should be informed by Recency, Frequency, and Tenure—separate from the Monetary calculation.

3. Calculate Your Average Gift (Excluding Elite)

Elite donors tend to skew averages upwards in ways that are not helpful for defining the other tiers. To get a realistic baseline:

Remove all Elite-tier donations.

Add all remaining donation amounts.

Count these donations.

Calculate:

Average Gift = Total Non-Elite Donations / Count of Non-Elite Donations

This average gift becomes the anchor for defining all remaining Monetary tiers.

4. Define Monetary Tiers Using Clear Multiples of the Average Gift

Once you have your average gift, the rest of the Monetary tiers can be defined using simple multiples. This keeps the structure easy to calculate, easy to understand, and consistent in any currency.

Here is the summary of the multiplier structure:

Tier 1 = below 0.5 × average gift

Tier 2 = 0.5 × average gift to 1.25 × average gift

Tier 3 = 1.25 × average gift to 2 × average gift

Tier 4 = 2 × average gift up to Elite Threshold

Tier 5 = Elite Threshold

These ranges mirror how giving naturally clusters in almost every donor file.

5. Turning Multipliers Into Real-World Bands

The following example assumes Average Donation = 126 and Elite Status = 1,000+

Tier 1: Upgrade Potential

The calculated cutoff for this tier is half of the average gift (0.5 × 126 = 63). For practical use, this is rounded to a simple, easy-to-work-with number. A clean breakpoint such as 50 keeps the range clear and avoids odd amounts that add no analytical value.

Rounded band: 0–50

Tier 2: Financial Base

This tier spans from half of the average gift to 1.25 times the average (63–157). Rounding this to a straightforward range such as 50–150 creates a clean middle area that reflects the typical giving pattern without introducing unnecessary precision.

Rounded band: 50–150

Tier 3: Growth Catalyst

This tier covers gifts from 1.25 to 2 times the average (157–252). Rounding these boundaries to 150–250 keeps the tier easy to interpret while still reflecting a clear step up from the baseline.

Rounded band: 150–250

Tier 4: Major Gift Pipeline

This tier captures amounts above twice the average up to the Elite threshold (252–1,000). Using 250–999 as the rounded range keeps the transition into the Elite tier well defined and operationally clear.

Rounded band: 250–999

Tier 5: Elite Status

This tier begins at the Elite threshold and represents the top range of giving.

Rounded band: 1,000+

Why This Method Works

This approach gives you Monetary tiers that are grounded in your real giving behavior, easy to calculate, meaningful for strategic decisions, and flexible enough to work across currencies and cause types. By anchoring everything to your average gift (excluding Elite) and rounding to intuitive giving levels, you create a structure that is simple, defensible, and aligned with how fundraising teams evaluate donor value.

It turns Monetary into a consistent, evidence-based part of your fundraising insight model.