Enhance Your Donor Relationships With Data
Published on Nov 21, 2015
Adding smart data analysis tools to your development operation can make your relationship building more effective.
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PRESENTATION OUTLINE
Enhance
Your donor Relationships with data
Learn how to use data you have and find the data you need, that will give you the confidence to build long-term, productive relationships with your donors.
Photo by UC Davis College of Engineering
"The power of perceiving external things."
Outsight Network is a group of leading strategists working with nonprofit organizations. Our name means, "The power of perceiving external things," and we work with organizations to design and implement lasting impact so they can achieve their missions.
Why are data so important to building relationships?
What do data have to do with good relationships?
Photo by justgrimes
Because:
- You're doing more with less
- Knowledge builds confidence
- Investment in knowledge pays off
1. All of our clients are trying to do more with fewer resources. Data can make your efforts more effective.
2. You know how much more effective your donor calls are when you are confident in what you are asking for.
3. There is a growing body of research that shows that investing in knowledge pays off for organizations.
2. You know how much more effective your donor calls are when you are confident in what you are asking for.
3. There is a growing body of research that shows that investing in knowledge pays off for organizations.
How Much Does Knowledge Matter?
According a study by Goldman Sachs, 75% of growth in sales is related to the amount of R&D spending. Information about constituents is like R&D spending for nonprofits.
What If?
- You don't like math?
- You can't afford it?
- Your data is a mess?
But what if these things seem to be standing in your way?
Photo by Inkyhack
To make your life easier by allowing you to spend the most time with those who are most likely to support your organization.
Making your life easier by focusing your efforts on what will make the most impact.
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A simple equation helps us understand how valuable each constituent is to your organization. A donor's total value is a function of his or her capacity to give times his or her level of interest in your mission.
If you don't like math
- Doing your homework yields rewards
Just like when you were a kid, doing your math homework makes you smarter about building relationships, and means you can go out and enjoy building productive relationships with your donors.
Photo by Sebastiaan ter Burg
If Your data is a mess
- Start with what you have
Every database, even those that are a mess, has some data that can be used to measure donor value. At the same time, improving your data is a constant process. It's important to always be working on building a better database.
If you can't afford it
- Start with no or low cost options
There are many ways to enhance your data, including some for low or no cost.
Start with the data you have
Start with what you already have: 1) giving information and 2) interaction with your organization.
Capacity Data You Have
- Total Lifetime Giving
- Average Gift
- Others?
You likely have or can calculate the total amount a donor has given over time, and his or her average gift size. Any financial data you have for donors helps identify their giving capacity.
Photo by Tax Credits
Interest Data You Have
- Total number of gifts
- Length of time since last gift
- Inbound interactions
Your data also tells you something about how interested donors are in your organization. The total number of times they have given, the length of time since their last gift, and the number of times they have interacted with the organization, for any reason, are all indicators of interest in your mission.
What to do with these?
Once you identify what data you have, what can you do with them?
Simple - Assign a value to each variable and add them up to create an index score
For numeric data, like total lifetime giving, you can either use real numbers, or create categories and assign a numeric value to each category. For non-numeric data, like event attendance, you can either count the number of interactions, or assign a numeric value to each activity. Then add up all the numbers to arrive at a single score for each constituent.
Photo by Frederick Md Publicity
Simpler - Multiply Total Lifetime Giving by Total Inbound Interactions
Or simply multiply the total lifetime giving by the total number of interactions each constituent has had with your organization. Then sort your data from highest to lowest.
Simplest - Pick one capacity and one interest variable and sort by these
The simplest method is to pick one capacity variable and one interest variable and sort your data from highest to lowest based on these two fields. The donors at the top of the list become your highest priority.
What if you need better capacity data?
But how can you find the donors who could be giving you more, but aren't, if they have only given small amounts? You need better capacity data to do that.
Photo by Cola21
Free and low-cost sources
- Zip Code level census data
- Purchased household data
- Pros and Cons to each
There are many free and low-cost sources of wealth data. You can infer a lot about constituents from their zip codes. It's free, but it's not as accurate as purchasing household data, which is more accurate, and relatively low cost, but still not perfect.
Photo by Steven Vance
what if you need to be more certain?
To be more certain, you need to combine external, reasonably accurate capacity data with the interest data you have in your database, and use predictive modeling to increase the certainty of your results.
Some examples
- Constant stream of new constituents
- Preparing for a capital campaign
- Increase major gifts with limited staff
When does predictive modeling make the most sense? When you need to find a needle in a large haystack of constituent names. Or when you are preparing for a capital campaign, or if you are being asked to do more with fewer resources.
Predictive Modeling - Customizes the Total Value Equation for your constituents and your organization
The value of a good predictive model approach is that it customizes the results based on information that is unique to your organization, not a one-size-fits all algorithm.
Benefits
- Your data are more accurate
- Better prioritization
- More results for your efforts
What do you get? Greater accuracy in the results, better prioritization of time and efforts, and increased fundraising.
Process
- Append
- Model
- Find
- Rank
How does it work? 1) We append wealth and lifestyle data to your constituents. 2) We use your giving and interest data plus the appended data to build a model that shows us a profile of your best donors. 3) We find others in the data who match that profile. 4) We rank every constituent compared to the "ideal" model.
What It has done for our clients
- Reached annual goals faster
- Shown what activities work best
- Identified unknown giving capacity
- Achieved a tough campaign goal
Our clients have increased their effectiveness, accomplished fund raising objectives, and better understood what works and what doesn't.
Photo by United Way of the Lower Mainland
Myths about predictive modeling
- It's only for big organizations
- We tried wealth screening and it didn't work
- It sounds too good to be true
- It's too expensive
- We already have good relationships with our donors
You may have heard some of these myths about predictive modeling. Our process works, even with small organizations. It's affordable, and it's better than wealth screening because it leverages the most important piece of information about donors--how much they care about YOUR organization. And relationship-building requires ongoing efforts.
Photo by eric.delcroix
Summary
- Total Value = Capacity x Interest
- Goal - Focus on high-value constituents
- Start with the data you have
- Supplement with better data on capacity
- When appropriate, use predictive modeling
Focus on high-priority constituents by using data to understand their capacity to give and their interest in your mission. Start with what you have, and enhance your efforts through more sophisticated modeling techniques.
