Conditional Formatting in Data Merge

Hello.

I have a simple problem that I can't seem to get my wits around:

I am sending a letter to a list of donors.

This list has simple data merge fields:

Name

Donor Status

However, the letterhead needs to have a different color for status. It is the same words but it's a diferent color (which fits that donor status). Is there any way to do this?

So, in my excel it lists

Mike Jones      Donor Status 1

Jim Bob          Donor Status 2

And  the header would be

Wonderful Charity (in blue)

Dear Mike,

As a Donor Status 1 we appreciate your...

(next letter)

Wonderful Charity (in red)

Dear Jim,

As a Donor Status 2 we appreciate your...

----

Any suggestions? A grep style seems to be the clue... but I am still clueless.

Thanks!