10/7/2013 #bbcon 1

The Why, When and How of Data Driven Fundraising

Presented by:

Jenny Cooke Smith

Page Bullington

10/7/2013 #bbcon 2

• Why Data Driven Fundraising?

- Explore Macro Trends of Donors and Dollars

- Review generational shifts in donors

• When to Implement?

- Data Points to Audit

- Giving Scorecard

• How to Incorporate Analytics?

- Case Studies showing data driven approach

• Let’s Hear from the Experts:

- Panel of peers for Q&A

TODAY’S AGENDA

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• Having data and using data are two different states

• Consider what should you be buying or building to better support

your efforts

• What should you collect to help with your analysis and segmentation

• Consider which data points should act as a trigger to change

cultivation efforts

• Embrace the value of benchmarks – try not to fix the wrong thing

POINTS TO PONDER

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TARGET ANALYTICS

Leading Provider of Supporter Insight & Analytics to the Nonprofit Sector

Division of Blackbaud, Inc.

7,000+ Customers, Across All Nonprofit Segments

Key Assets:

Cooperative Database - Industry’s largest donor database; over 2B

philanthropic transactions from 80M+ households

NOZA Database - Industry’s largest searchable database; over 65M

uniquely identified gift records

donorCentrics – Nonprofit’s largest & most established performance

benchmarking practice, with more than 530 participating organizations

Key Product Lines:

Direct Marketing Solutions

Major Gift Fundraising Solutions

Data Enrichment Services

Performance Benchmarking & Reporting

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QUOTE FROM THE COURAGE CENTER

We had lots of cold prospects, so we used

modeling to find out [which prospects] were

warm enough to cultivate. Within five

months, I identified 300 people for the major

gift program and each has a target range —

which allowed our officers to spend their

time more productively.

— KRISTEN BARLOW, PROSPECT RESEARCHER

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TWEET ABOUT YOUR SESSION

#BBCON

#TAWORKSHOP

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WHY DATA DRIVEN FUNDRAISING?

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WHY? IT’S NOT GETTING EASIER

Source:

National Index for

Fundraising

Performance,

Target Analytics

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WHY? IT’S NOT GETTING EASIER

23%

8% 11%

21%

7%

11%

19%

7%

10%

Private Public Overall

2010 2011 2012

Source:

CAE, Voluntary

Survey for

Education

Source:

Higher Education

Index for Fundraising

Performance, Target

Analytics

11.70%

10.00% 9.85% 9.50% 9.20%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

2008 2009 2010 2011 2012

Participation Rates for Higher Education

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CHANGING DEMOGRAPHICS

How they give is different too!

Better Understand Your Donors by Leveraging

Similarities and Managing Differences!

» 52% give via the mail

» 34% give in honor or tribute

Matures

» 40% give via the mail

» 30% give in honor or tribute

» 46% give via work

» 21% give monthly

» 42% give via organizational

websites

Baby Boomers

» 50% give via retail transactions

» 50%+ give via work

» Close to 50% of Gen X and

62% of Gen Y would give via

mobile

» 46%+ fundraise on behalf of

organizations

» 40%+ give via organizational

websites

Generation X & Y

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Donor Truths we have learned for ALL types of organizations

WHO IS GIVING…

Retention

Reactivation

Acquisition

Donor Migration (i.e. pipeline to major giving)

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. . . donors giving at higher levels are more likely to retain

WHO RETAINS?

Source: donorCentrics - two consortium groups of public and private Higher

Education institutions examining Fiscal Year 12 data.

39%

60% 65%

70%

79% 80% 79%

86% 85% 86% 87% 82%

42%

51%

60% 65%

73% 74% 77%

82% 81% 77% 76%

85%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Private

Public

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. . . the longer a donor the more likely to continue giving

WHO RETAINS?

Source: donorCentrics – consortium group of Cultural Organizations examining Calendar Year 2012 data

Donor Loyalty Median Retention Rate

New

35%

2 years 62%

3 -4 years 72%

5+ years 84%

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. . . The more frequent the gift, the more likely to retain

WHO RETAINS?

Source: donorCentrics – consortium group of International Relief Organizations examining Calendar Year 2012 data

Gifts per Year Median Retention Rate

1 48%

2 63%

3+ 86%

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RECURRING GIVING: THE VALUE OF

SUSTAINERS

$434,304

$183,662

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

1 2 3 4 5 6

Cu

mu

lati

ve

Reve

nu

e

Years on File

6 Year Value of 1,000 New Donors

Sustainer Revenue

Single Gift Revenue

Figures are based on the Calendar Year Data for organizations (not Higher Ed) participating in

Sustainer benchmarking

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. . . the longer a donor prior to lapsing, the more likely to reactivate

WHO REACTIVATES?

Figures are based on the Calendar Year Data for organizations (not Higher Ed) participating in

Environmental benchmarking

Donor Loyalty (before lapsing) Median Reactivation Rate

New 5%

2 consecutive years 12%

3-4 consecutive years 15%

5+ consecutive years 19%

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HOW ACQUISITIONS ARE OCCURING?

Direct Mail

Face to Face

Online Marketing

Direct TV

Phone

Resident

Peer to Peer

10/7/2013 #bbcon 18

WHY IS IT IMPORTANT TO UNDERSTAND

DONOR GIVING BEHAVIOR?

It is much easier and cost-effective to keep your

donors on file than to acquire new donors

The old standards still hold true

» Recency, Frequency, and $ still drives a program

» The downside of not managing these metrics closely

can hurt a program through lost revenue and donors

» Capitalizing on giving patterns can create new

opportunities for your organization

New donors are out there

» We are not solely relying on a few donors who give

frequently to fuel acquisition

» Newly Acquired Younger donors may not be solicited as

heavily as older donors who give frequently. Old

assumptions on channel behavior may not hold true in all

cases

• Analyze before assuming

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I KNOW I NEED TO DO IT…

WHEN DO I IMPLEMENT?

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• Audit your data ‘warehouse’

- What data do you have? Age, Wealth, Channel behavior, etc?

• Perform a file assessment

- What does your donor base look like?

- Where are the opportunities?

- Where are the holes/risks?

• Identify organizational goals

- Align your data leads with organizational goals

• Ask questions

- What tools exist to help you achieve your goals; utilizing internal and

external data

DATA POINTS THAT SAY “IT’S TIME”

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Major Gift Scorecard Leverage Your Existing Fundraising Potential

Organization The Becker Institute

Nonprofit Sector Higher Education

Constituent Records 70,000

Major Gift Level $15,000

Model Justification

The gift-level and contribution calculations identified in the prospect

screening results were based on the following types of wealth and

philanthropic information linked to your major gift prospects:

Recommendations

Based on the issues identified, Target Analytics recommends the

following solutions / techniques to convert the unrecognized

potential detailed above:

• Principal Giving (All Prospects)

• Major Gift Likelihood Modeling (All Prospects)

• Target Gift Range Modeling (All Prospects)

• Comprehensive Wealth Screening (Top 10%)

• Echelon Power Segmentation (Top 10%)

Prospect Screening We’ve screened your current supporter base to establish their

giving potential, and have identified the individuals that are

performing optimally, are under-performing, or are severely

underperforming relative to where they should be:

Data Point Count

Number of $10,000 Gifts To Your Organization (Last 5 Years)

275

Number of $10,000 Gifts To Other Nonprofits (Last 5 Years)

435

Constituents With $1,000,000+ In Identified Total Assets

112

Constituents With $1,000,000+ In Non-Real Estate Assets

235

Constituents With $250K+ In Household Income 365

Constituents With $80K+ in Discretionary Spending 2,311 Optimal Gift

Level Optimized

Donors Under

Performers Severe Under

Performers

$500,001 - $1,000,000 6 3 3

$200,001 - $500,000 1 2 3

$100,001 - $200,000 6 4 5

$50,001 - $100,000 14 1 1

$25,001 - $50,000 17 2 1

$10,001 - $25,000 4 1 0

$5,001 - $10,000 239 302 123

Total 53% 31% 16%

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WHY DOES ‘WHEN’ MATTER?

Knowing When- You won’t know ‘when’

unless you understand

your organizational

goals, areas of

opportunity and risk, and

have a sense where you

are succeeding/failing

Goals- Understanding your

organizational goals and

benchmarking your

progress towards these

goals can help guide

where additional data

and analysis is needed

Costs- Understanding priorities

can help align budgets

with data and analytic

needs. Sound

investment can be made

in a methodical yet

fiscally responsible way

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HOW DO I INFUSE ANALYTICS INTO MY

PROGRAM?

10/7/2013 #bbcon 24

The Challenge • Large # of low-level donors (< $1K)

• Sub-optimal response rates

• Upcoming budget cuts & streamlining

CASE STUDY

Goals & Objectives • Migrate lower-level donors to $1K+

• Increase response rates across gift levels

• Grow revenue while cutting costs

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• Pre-project estimates indicated that

while the obstacles where

substantial, the goals were fully

attainable

• Projected a 65-75% increase in

known constituents likely to give

between $50 - $250

• Estimated a 500% increase in

known constituents that were likely

to give $1000+

ANALYTICS RESULTS / STRATEGY

10/7/2013 #bbcon 26

Recommended Strategy

- Targeted investment increases in those

individuals identified as “most likely to give”

(largely via additional solicitations)

- Reduce or eliminate interactions with those

that are unlikely to contribute

- Apply a data-driven ask amount based on

TGR; not to exceed 25% of last gift

- Implement a specialized mailing campaign

specifically targeted at $1K-$5K prospects.

- Solicitor assignment for individuals $5K+ or

over, as defined by Target Gift Range

STRATEGY / RESULTS

35% Increase in Revenue

22% Increase in Responders

50% Increase in AVG Gift Size

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HOW: CASE STUDY- LOYALTY DATA

Results Using Loyalty Insights (Client identifies wasted mailings on unprofitable & unresponsive segments)

Example: National Relief Organization

Solution Used: Loyalty Insights (descriptive analytics model) to leverage donor loyalty that compares donor giving

behaviors to the organization with other non-profit orgs they support.

• Used to communicate differently with best segments via messaging and offer treatments and identify areas of reduced

investment for least loyal segments

Results Using Traditional RFM Model (Recency, Frequency, Monetary Amount)

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HOW: CASE STUDY- LOYALTY DATA

Case Studies from clients and agencies identifying, developing, and finding

successful strategies using Insights

Case Study A: Client used Insights to target for their Sustainer Invite. They segmented out the LI codes

that were part of their normal data select for the invite call (i.e. they didn’t pull in other top Insights names;

only those they would have normally mailed). Results- They saw stronger gift response rate across the three most loyal donor groups and an

increase in sustainer pledges as well. Client is crediting this strategy for turning around their phone

invite program. The # of pledges in one campaign equated to the sum of all sustainers acquired in all

3 sustainer invite calls all year.

Case Study B: Client utilized the top 3 audiences for Planned Giving mailings with success; one large gift

can make all the difference! In addition to Planned Giving usage, Client B also used Insights for ask string

testing:

TEST:

Best of the Best & New and Noteworthy- tested current membership $ (control) vs. 1.5% and

1.25% the current membership year $

Habitually Generous- tested current membership $ (control) vs. test panels of current

membership $ +$10 and current membership $ +$20

Results-

Best of the Best & New and Noteworthy-

BOB- tests resulted in RR% lift of 17% and lift in gift of 8.9%

NEW- tests resulted in RR% decrease but decrease was replaced with 18% lift in gift-

net flat

Habitually Generous- flat response (test vs. control) but 20% lift in gift

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• Utilize predictive modeling to reactivate Lapsed universes. Lapsed Tags are a letter rating

(A-J) assigned for lapsed donors, indicating a likelihood to reactivate via a direct marketing

appeal

• This predictive solution helps an organization identify the likelihood to reactivate; enabling

better marketing focus, allocation of marketing budget, and suppression of low response

donors

HOW: REACTIVATE LAPSED DONORS

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WELL DESIGNED AND EXECUTED

ANALYTICS…

• Uncover supporter insights that aren’t

easily derived from wealth screening

alone

• Streamline the process of interacting

day-to-day with supporters

• Direct our investment towards the

constituents & initiatives which yield

the highest ROI

• Produce results that far surpass past

performance, in terms of revenue and

efficiency

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CLIENT PANEL

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Kristin A. Heller

• Executive Director of Prospect Development and Information Strategy at The College of William and Mary in Williamsburg, VA

Jeff Lindauer

• Associate Vice President for Development at the Indiana University Foundation

John Perell

• Director of Direct Response and Shared Services at the Smithsonian

Sandra Miao

• Director of Direct Response at The National Wildlife Federation

PARTICIPANTS

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AVAILABLE FREE RESOURCES FROM

TARGET ANALYTICS

Resource Examines . . . Updates

The Blackbaud Index

Overall and Online Giving that

incorporates $12 Billion in US

charitable giving

Monthly

Index of National Fundraising

Performance

Giving trends from Animal

Welfare, Arts and Culture,

Environment, Health, Human

Services and International

Relief

Quarterly

Index of Higher Education

Fundraising Performance

Giving trends in Higher

Education with subsets for

Private and Public Institutions

Annually

npEngage Collection of nonprofit blogs

highlighting best practices and

industry trends

Regularly

10/7/2013 #bbcon 34

Session Title Timing Presenter(s)

ResearchPoint Roadmap

Monday

8:30-9:45 AM

Anthony Tomaino, David

Lamb

Annapolis 1-2

Drive Offline Response with

Online Advertising

Monday

10:00 – 11:15 AM

Richard Becker

Earning That Society-Level

Gift

Monday

10:00 – 11:15 AM

George Durney,

Page Bullington

Keys to Success for Growing

a Sustainer Program

Monday

1:30 -2:45 PM

Nicola Bach

AJ. Minogue

Addressing the 2nd-Level

Donor Pyramid

Tuesday

9:15-10:30 AM

Page Bullington

Lifetime Loyalty and Lasting

Legacies

Tuesday

10:45 AM – 12:00 PM

Lawrence Henze, Katherine

Swank

TARGET ANALYTICS AT BB CON