1. 2010 WASHINGTON NONPROFIT CONFERENCE January 28-29, 2010
Donor- Driven Segmentation
Data Driven Predictive Modeling to be Relevant to Donors
Suzanne Joiner
Director of Direct Response
Feeding America

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Feeding America
Feeding America is the nation's leading domestic hunger-relief charity. Our mission is to feed
America's hungry through a nationwide network of member food banks and engage our country
in the fight to end hunger.
Each year, the Feeding America network provides food to more than 25 million low-income
people facing hunger in the United States, including more than 9 million children and nearly 3
million seniors.
Our network of more than 200 food banks serves all 50 states, the District of Columbia and
Puerto Rico, securing and distributing more than 2.5 billion pounds of food and grocery
products annually. Those member food banks support approximately 63,000 local charitable
agencies and 70,000 programs, which provide food directly to individuals and families in need.
• 800,000 individual donors
• 400,000 active individual donors
• Labels based acquisition
• Minimal premiums in cultivation
• Campaign based cultivation, not membership

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Advanced Donor Targeting
+
Lifecycle
Giving media
Offer preference
Creative preference
Seasonality
And more…
Recency
Frequency
Amount

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Why?
Increase Loyalty

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Why?
More connection

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Why?
More Impact

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Why?
Be Relevant

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Donor Preference Variables - Offer
Basic Offer:
Stop food from going to waste
and provide specific amount
of food for hungry Americans.

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Donor Preference Variables - Offer
Pounds of food:
Each $1 provides
9 pounds of food

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Donor Preference Variables - Offer
Bags of groceries:
Each $1 provides
2 bags of groceries

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Donor Preference Variables - Offer
Meals:
Each $1 provides
7 meals.

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Donor Preference Variables - Offer
Value of food:
Each $1 provides
$14 worth
of food

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Donor Preference Variables – Offer Flavor
Strategic:
Save food
from waste.

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Donor Preference Variables – Offer Flavor
Emotional:
Provide food
for people
facing hunger.

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Donor Preference Variables – Offer Sweetener
Matching funds
double your
gift.

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Methodology
• 2-Stage Scoring Model – to optimize response rate and gift amount
simultaneously
• Stage 1 – Response Rate Prediction (Based on Logistic Regression)
– Calculated from complete transaction history, 3-year promo records, 2-year interest
match
– Factors derived to yield maximum prediction
– Interaction effects examined exhaustively
• Stage 2 – Average Gift Prediction (Based on Poisson Regression)
– Consider both recent year and lifetime/baseline giving trends to avoid over-asking
– Use personalized value as expected gift amount

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External Validation – Phase One
Decile
#
Mailed
#
Resp Gross Rev
Resp
Rate
Avg
Gift GYPM
GYPM
Lift NYPM mROI Net Rev
1 13,047 1,268 $104,580 9.7% $82.48 $8,016 4.25 $7,606 19.55 $99,231
2 13,048 919 $40,941 7.0% $44.55 $3,138 1.66 $2,728 7.65 $35,592
3 13,047 711 $27,314 5.4% $38.42 $2,094 1.11 $1,684 5.11 $21,965
4 13,048 543 $18,123 4.2% $33.38 $1,389 0.74 $979 3.39 $12,773
5 13,048 584 $15,408 4.5% $26.38 $1,181 0.63 $771 2.88 $10,058
6 13,047 462 $11,506 3.5% $24.90 $882 0.47 $472 2.15 $6,157
7 13,048 425 $10,367 3.3% $24.39 $795 0.42 $385 1.94 $5,017
8 13,047 349 $7,243 2.7% $20.75 $555 0.29 $145 1.35 $1,894
9 13,048 288 $5,887 2.2% $20.44 $451 0.24 $41 1.10 $537
10 13,048 361 $4,953 2.8% $13.72 $380 0.20 -$30 0.93 -$397
Total 130,476 5,910 $246,322 4.5% $41.68 $1,888 1.00 $1,478 4.60 $192,827

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Projected Performance
• 10%~20% reduction in mail volume
• 5% lift on net revenue
• Cost savings can be invested in higher-
leverage opportunities
• Sensitive to donor behavior dynamics –
meaning more net opportunities

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Actual Performance
- 9.6%
4.4% 4.3%
7.0%
0.4%
Quantity Response Average gift ROI Net Revenue

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Projected Impact by Segment
• Reduce contacts among segments with lower ROI, increase contacts to higher ROI segments
Core Donors (2+ Prior Years)
Prior Year Cume Donors Total NPV
Current Year
Cost/Donor
Donor NPV LT ROI
<$5 1,121 $13,972 $1.21 $12 1.61
$5-9.99 7,254 $106,837 $4.61 $15 1.37
$10-14.99 26,296 $1,070,155 $5.87 $41 1.78
$15-19.99 12,678 $958,656 $6.85 $76 2.29
$20-24.99 23,014 $2,557,767 $7.19 $111 2.79
$25-49.99 49,490 $10,201,287 $7.52 $206 4.01
$50-99.99 40,833 $18,437,031 $7.77 $452 7.00
$100-199.99 27,494 $27,501,244 $7.62 $1,000 13.53
$200-499.99 13,952 $31,920,286 $7.59 $2,288 26.83
$500-999.99 3,317 $17,052,857 $6.25 $5,141 55.01
$1000+ 1,655 $17,562,063 $3.57 $10,612 122.65
Grand Total 207,104 $127,382,154 $7.11 $615 9.97

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Actual Impact by Segment

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Additional Impact – Reinvestment of Cost Savings
DDS DDS 2.0 DDS 2.0 over DDS
Appeal Mailings
Total Cost $2,215,099 $2,040,084 -$175,015
Gross Revenue $9,304,979 $9,159,969 -$145,010
Net Revenue $7,089,880 $7,119,885 $30,005
Reinvestment of Cost Savings (Assume ROI = 3.0)
Total Cost $0 $175,015 $175,015
Gross Revenue $0 $525,046 $525,046
Net Revenue $0 $350,031 $350,031
Combined Financials
Total Cost $2,215,099 $2,215,099 $0
Gross Revenue $9,304,979 $9,685,014 $380,036
Net Revenue $7,089,880 $7,469,916 $380,036

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What Next?
Unique donor
experiences based
upon their past and
present behavior