Toward a predictive fundraising model

TOWARD A PREDICTIVE MODEL
FOR FUNDRAISING
#15NTCPREDICTIVE
Mary Dillon Kerwin
President, Blue Strike
NTen Nonprofit Technology Conference Austin #15NTC
March 6, 2015

Introduction
Friday March 6, 2015 1:30pm - 3:00pm
Twitter Hashtag: #15NTCpredictive
CFRE Credits: Approved - 1.5
Collaboration Notes: http://po.st/tHUJMN
Tags Advocacy, Data, Strategy

This session
❖ Launch the next phase of research into a fundraising
tool that will help development directors set goals,
manage time, and deploy resources.
❖ Look at preliminary findings and ask for your reactions,
comments, and questions regarding the research.
❖ Recommendations for phase II.

Session intended audience
Fundraisers/Managers
Interactive session
Collaboration Notes: http://po.st/tHUJMN
Volunteer scribes?
Download/view slides-NTEN Connect Library or
bluestrike.org/resources

Slides-Connect/Discussions
Enter “Toward a predictive model” in the search box

Agenda
 How we got started
 What we found (so far)
 Take the survey
 A look at the study’s limitations
 Real life scenarios
 Where we go next

BACKGROUND
Project Development
Saturday, March 7, 2015 #15NTCpredictive

It started with . . .
. . . a question from the audience
“Can you tell me which strategy will yield the best
results?”
Why is this question so hard to answer?

Tools that help us predict
• We have retirement
calculators, we have
mortgage calculators,
we even have workout
calculators . . .

How about one for development?
Your organization’s
revenue mix, number of
donors
Your staff size and level of
experience
Your volunteer profiles,
willingness to help

If not data science, then what?

Hypothetical #1
If your organization is less
than 10 years old, and you
have fewer than 500
donors, and you have a
part-time development
director, then you are likely
to find success . . .
1. Starting a sustainer
program
2. Relying on board
participation
3. Focusing on a
combination of web-based
giving strategies

Hypothetical #2
If your organization is going
through an executive
director transition, and you
have approximately 2,500
donors, and you raised $2
million last year, you are
likely to find success . . .
1. Starting a giving club for
major donors
2. Hiring additional
fundraising staff
3. Focusing on cultivation of
high net worth individuals

Enlisting help for the project
❖ Conference calls with
nonprofits, discussions
with businesses and
consultants
❖ Faculty advisor for
independent study
❖ Data collection
❖ Analysis -- here we are
at NTC!

Different perspectives/perceptions

Questions to think about
 As we go through the research, here are a few questions
to consider:
 Have you seen similar, supporting or contradictory
research?
 How might you use the findings?
 What other correlations or causes should we look for?

RESEARCH
Descriptives and Group Differences

Research design
❖ Focused on organizations engaged in advocacy, public
policy, civic engagement, and public interest law
❖ 900 organizations selected at random received an
online survey from Jan. 20 to Feb. 17, 2015
❖ Questionnaire asked about 2013 fundraising practices
❖ Responses were matched with IRS administrative
records (FY2013) to create the datafile.

About the sample
 175 responses
 162 completed surveys
 44 states and 14 different categories

Figure 2.1 Nonprofit Category
4
4
5
6
8
12
20
21
24
30
41
Education
Community Improvement
Animal Related
Intl, Foreigh Afrs, Natl Sec
Public Society
Other (Arts, Housing, Food)
Enviro Educ/Outdoor
Crime and Legal Related
Environment
Civil Rights
Enviro Conservation
Survey responses by nonprofit category

Individual giving and revenue
❖ Most organizations (77%) have fewer than 1,000 donors
❖ Most (60%) have fewer than 5,000 names on their email
files
❖ Only 17% count on individual donors to make up 50%
or more of their revenue
❖ Average revenue is $2 million

Staff and volunteers
❖ Two-thirds of the organizations have staff dedicated to
development
❖ 38% have executive directors with less than five years
tenure; while one-third have tenure of 10 years or more
❖ Board participation is present, but modest

SURVEY
Nonprofit Fundraising Practices Questionnaire

Figure 3.1 Fundraising Practices
22% recognition and fundraising
20% heavy/moderate emphasis
20% all/most
24% heavy/moderate emphasis
30% mobil compatible
45% three times or more
42%
47%
51%
54%
85%
89%
Giving clubs
Matching campaigns
Conditional ask string
Sustainer program
Donate button on website
Second gift ask

Figure 3.2 Giving Clubs
$1,748,474 $1,940,761
$2,697,044
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
No Giving Club Recognition Only Recognition and Fundraising
Giving clubs with a fundraising component are
associated with higher revenue

Figure 3.3 Matching Campaigns
$1,778,860 $1,848,724
$2,655,744
$3,246,755
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
No Matching Campaigns Low emphasis Moderate Emphasis Heavy Emphasis
Matching campaigns are associated with higher revenue

Figure 3.4 Conditional Ask String
$1,543,682
$2,768,055
$1,841,081 $1,683,012
$4,964,755
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
Did not use Used in few Used in some Used in most Used always
Consistent use of conditional ask strings yields best results

Figure 3.5 Sustainer Program
$1,789,965
$2,726,310
$0.00
$500,000.00
$1,000,000.00
$1,500,000.00
$2,000,000.00
$2,500,000.00
$3,000,000.00
$3,500,000.00
$4,000,000.00
Low emphasis/no program Moderate and heavy emphasis
Sustainer campaigns see higher revenue

Figure 3.6 Second Gift Ask
$1,659,148 $1,836,170
$2,697,201
$1,654,427
$2,217,072
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
Did not solicit Solicited once Some once, others
more
Solicited all 2 to 3
times
Solicited all 4 times
or more
Asking more than once a year helps when it’s targeted

Figure 4.1 Development Directors
$1,537,686
$1,297,823
$2,170,352
$3,066,418 $3,213,659
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
No DevDir Less than 5 yrs 5 to 9 yrs 10 to 14 yrs 15 plus yrs
Experienced development directors see higher revenue

Figure 4.2 Board Participation
$1,829,662 $1,973,2673 $2,109,688
$2,506,708
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
Low Low to moderate Moderate to high High
Board participation has little to no impact

Figure 4.3 Executive Director Tenure
$1,873,090 $1,945,450 $2,105,967 $2,242,143
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
Less than 5 yrs 5 to 9 yrs 10 to 14 yrs 15 plus yrs
Executive Director tenure has little to no impact

Figure 4.4 Comparison
$0
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
DD & ED<5yr, BD Low DD & ED 5-10yr, BD L/M DD & ED 10-15yr, BD M/H DD & ED 15yr+, BD H
An increase in development director experience has the
greatest impact
Board participation Executive director tenure Development director yrs experience

Other variables
 Age of organization*
Category
Number of donors/email file*
Assets to revenue ratio
Revenue mix
* Indication of possible statistical significance

LIMITATIONS
Considerations in using the research

Limitations
❖ Not generalizable to all nonprofits
❖ Does not measure all practices
❖ Revenue is an imperfect dependent variable
❖ Survey focused on 2013 - risk of memory decay
❖ Ranges are difficult to use in regression
❖ Low response rate may result in non-response bias

DISCUSSION
Real Life Scenarios

Discussion questions
Have you seen similar, supporting or contradictory
research?
How might you use the findings?
What other correlations or causes should we look for?

NEXT STEPS
Phase II of research, sharing findings through webinars

Additional testing
Looking for correlations
Segmenting by age, category, income
Controlling for media and unusual gifts

Sharing research findings
Email to all survey respondents
Webinars with state nonprofit associations
Brown bag lunch with Association of Fundraising
Professionals
Final report – May 2015

Wrap up
Evaluation Survey: http://po.st/FldqRm
Collaboration notes: http://po.st/tHUJMN

Toward a predictive fundraising model

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