Data Driven Advancment
The Plan <ul><ul><li>Introduction and Overview. </li></ul></ul><ul><ul><li>Prospect Management  Process Summary. </li></ul...
Introduction and Overview
Why do some organizations raise twice the dollars with  the same staffing? <ul><ul><li>Prospect Potential </li></ul></ul><...
A successful prospect management system … <ul><ul><li>Facilitates relationships between your organization  and prospects. ...
Why Do Donors Give? <ul><ul><li>Their value portfolio is in alignment with your  value portfolio. </li></ul></ul>
Value Portfolio <ul><li>For an individual: </li></ul><ul><ul><li>Collection of interests, motivations, life goals, and fir...
Effective Fundraising Reveals and demonstrates how the prospect’s  interests, motivations, life goals, and/or firmly  held...
Common Giving Motivations <ul><ul><li>Global and historic impact. </li></ul></ul><ul><ul><li>Emotional response. </li></ul...
Global and Historic Impact <ul><ul><li>Want to change the world for the better. </li></ul></ul><ul><ul><li>Often view phil...
Global and Historic Impact <ul><ul><li>“ Our generation has a unique opportunity to make history. We have the money, we ha...
Emotional Response <ul><ul><li>Have a broad sense of empathy. </li></ul></ul><ul><ul><li>Respond to emotional appeals. </l...
Emotional Response <ul><ul><li>“ You really are emotionally tired after such a tragedy, and  you don't know what to do wit...
Personal Benefit <ul><ul><li>Give to areas that bring personal joy. </li></ul></ul><ul><ul><li>Many arts and athletics don...
Personal Benefit <ul><ul><li>“ I'm 78 and want OSU to be competitive in the Big 12 before I'm gone.”  —T. Boone Pickens </...
Obligation or Duty? <ul><ul><li>Very prevalent in religious giving. </li></ul></ul><ul><ul><li>“ Giving-back” is a common ...
Obligation or Duty? <ul><ul><li>“ I'm doing it because I earn far out of proportion to what I am worth to this world.”  —L...
Loyalty <ul><ul><li>Loyalty is an earned motivation. </li></ul></ul><ul><ul><li>Whether from fundraising or from other exp...
Loyalty Needs Needs met consistently Loyalty + =
How do we consistently meet prospect needs? <ul><ul><li>Systematic Prospect Management </li></ul></ul>
Benefits <ul><ul><li>Managing complex portfolios with simple processes. </li></ul></ul><ul><ul><li>Unified and consistent ...
Threats <ul><ul><li>Shadow systems. </li></ul></ul><ul><ul><li>Offline brains. </li></ul></ul><ul><ul><li>Lack of trust in...
Prospect Management Process Summary
Overall Process (following base development) Market Research Identification with screening and modeling Prospect Research ...
Process Staging <ul><ul><li>Let’s review the stages. </li></ul></ul><ul><ul><li>From the anonymous record on the database ...
<ul><ul><li>Identification </li></ul></ul><ul><ul><li>Market Research  </li></ul></ul><ul><ul><li>techniques including: </...
Leads Suspects with  unverified   capacity, propensity,  attachment, interests, etc. (coding begins, often into  pools by ...
Qualified Leads Suspects with  verified   capacity, propensity,  attachment, interests, etc. Discovery Field research cond...
Is this  a Prospect? Not a Prospect Consider other fundraising strategies. Not a  Prospect Now Future prospect. Reminder s...
Stewardship Stewardship Solicitation Cultivation Strategy Development
Data Driven Metrics
Objectives of Prospect Management <ul><ul><li>Feed the pipeline with suspects. </li></ul></ul><ul><ul><li>Qualify the susp...
Possible metrics: Feeding the Pipeline <ul><ul><li>New suspects identified each month/year. </li></ul></ul><ul><ul><li>Res...
Possible metrics:  Qualifying the Suspects <ul><ul><li>Effectively “passing the ball” from research to the frontline (rati...
Monitor Portfolios <ul><ul><li>Evaluate contact and yield activity. </li></ul></ul><ul><ul><li>Evaluate gift officer skill...
Cultivation Strategies <ul><ul><li>Strategies in place for all managed prospects. </li></ul></ul><ul><ul><ul><li>Target as...
Possible metrics:  Moves <ul><li>Contacts/Personal visits made. </li></ul><ul><ul><li>Cultivation contacts by type: </li><...
Possible metrics:  Solicitation <ul><ul><li>Capacity vs. targeting. </li></ul></ul><ul><ul><ul><li>Important to have prosp...
Possible metrics:  Strategic Stewardship <ul><ul><li>Dates to resume cultivation for all “managed”  stewardship prospects....
Key to Reporting <ul><ul><li>Data that has an impact on results—rather than untested assumptions and rules of thumb. </li>...
Data Preparation and Modeling: Report Inventory  Name of Report Purpose Key Data Elements Distribution Frequency Person/s ...
Customized Cultivation Strategies
This backpack is on its way to Alaska for a hiking trip.
This one is headed for a beach vacation in Mexico.
What would you pack in these backpacks?
This young alum became very wealthy quickly by  starting a business.
This successful faculty member is about to retire after receiving a prestigious award.
This community member had a granddaughter cared for in the university hospital.
This guy hires lots of your alumni.
What would you pack in these backpacks?
Unique Performance Drivers <ul><ul><li>Different prospects require different strategies. </li></ul></ul><ul><ul><li>At the...
Quantifying Performance Drivers Using Data Mining <ul><ul><li>Determine business process and goals. </li></ul></ul><ul><ul...
Identify Segments <ul><ul><li>Naturally Occurring Segments </li></ul></ul><ul><ul><ul><li>Age/Graduation Decades. </li></u...
Gather Behavioral Data for All Constituents <ul><ul><li>Alumni event attendance. </li></ul></ul><ul><ul><li>Chalk-talks. <...
Model Performance Drivers for Unique Clusters <ul><li>Correlation Analysis </li></ul><ul><ul><li>Create split groups of ra...
Evaluation <ul><ul><li>Identify the top 5–10 behavioral data points from correlation and discriminant modeling. </li></ul>...
Implementation <ul><ul><li>Apply the recommended cultivation paths in strategy  building forms and discussions. </li></ul>...
Now that you know what to pack …
Enjoy Your Trip!
7251 Ohms Lane Minneapolis, Minnesota 55439 ph: 952-921-0111 fax: 952-921-0109 email: donorcast@bwf.com  website: www.dono...
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Data Driven Advancement

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The analysis of data within a prospect management system can be used to evaluate fundraising effectiveness, assist with strategic planning, and inform management decision making. This session will cover what is important to monitor, how to establish benchmarks, and how to set up progress reporting and analysis.
Presenters:

Josh Birkholz, Director of DonorCast Analytics, Bentz Whaley Flessner

Published in: Education, Business, Technology

Data Driven Advancement

  1. 1. Data Driven Advancment
  2. 2. The Plan <ul><ul><li>Introduction and Overview. </li></ul></ul><ul><ul><li>Prospect Management Process Summary. </li></ul></ul><ul><ul><li>Data Driven Metrics </li></ul></ul><ul><ul><li>Customized Strategies. </li></ul></ul>
  3. 3. Introduction and Overview
  4. 4. Why do some organizations raise twice the dollars with the same staffing? <ul><ul><li>Prospect Potential </li></ul></ul><ul><ul><ul><li>Nature of the constituency. </li></ul></ul></ul><ul><ul><li>Strategy </li></ul></ul><ul><ul><ul><li>Identification and prioritization of the prospect pool. </li></ul></ul></ul><ul><ul><ul><li>Integration into a prospect pipeline. </li></ul></ul></ul><ul><ul><li>Execution </li></ul></ul><ul><ul><ul><li>A “major” gift mentality. </li></ul></ul></ul><ul><ul><ul><li>A culture of solicitation-focused case stating. </li></ul></ul></ul>
  5. 5. A successful prospect management system … <ul><ul><li>Facilitates relationships between your organization and prospects. </li></ul></ul><ul><ul><li>Leads to solicitation—awareness, involvement, and ownership. </li></ul></ul><ul><ul><ul><li>Has agenda-driven moves. </li></ul></ul></ul><ul><ul><ul><li>Is guided by the case for support. </li></ul></ul></ul><ul><ul><ul><li>Contents of strategies align prospect interests with organizational priorities. </li></ul></ul></ul>
  6. 6. Why Do Donors Give? <ul><ul><li>Their value portfolio is in alignment with your value portfolio. </li></ul></ul>
  7. 7. Value Portfolio <ul><li>For an individual: </li></ul><ul><ul><li>Collection of interests, motivations, life goals, and firmly held beliefs guiding a person through life. </li></ul></ul><ul><li>For a nonprofit: </li></ul><ul><ul><li>Collection of purposes, motivations, organizational goals, mission, and vision defining its purpose for existing. </li></ul></ul>
  8. 8. Effective Fundraising Reveals and demonstrates how the prospect’s interests, motivations, life goals, and/or firmly held beliefs are met through the work and vision of the nonprofit.
  9. 9. Common Giving Motivations <ul><ul><li>Global and historic impact. </li></ul></ul><ul><ul><li>Emotional response. </li></ul></ul><ul><ul><li>Personal benefit. </li></ul></ul><ul><ul><li>Obligation or duty. </li></ul></ul><ul><ul><li>Loyalty. </li></ul></ul>
  10. 10. Global and Historic Impact <ul><ul><li>Want to change the world for the better. </li></ul></ul><ul><ul><li>Often view philanthropy as an investment in the future of society. </li></ul></ul><ul><ul><li>Will fund research, service programs, outreach initiatives, transformational “big ideas,” etc. </li></ul></ul>
  11. 11. Global and Historic Impact <ul><ul><li>“ Our generation has a unique opportunity to make history. We have the money, we have the knowledge, we know the people who can help Africa.” —Bono </li></ul></ul><ul><ul><li>“ I decided to try and preserve things that, but for my money, might go away forever. ” —Robert W. Wilson </li></ul></ul>
  12. 12. Emotional Response <ul><ul><li>Have a broad sense of empathy. </li></ul></ul><ul><ul><li>Respond to emotional appeals. </li></ul></ul><ul><ul><li>Give in response to times of crisis (personal or external). </li></ul></ul><ul><ul><li>Prevalent in direct mail and online (Katrina, tsunami, etc.). </li></ul></ul><ul><ul><li>Often tricky to convert to major donors unless it strikes close to home. </li></ul></ul>
  13. 13. Emotional Response <ul><ul><li>“ You really are emotionally tired after such a tragedy, and you don't know what to do with this grief you have. My wife and I said, 'Let's create a foundation and see if we can help others.' The foundation became a way of healing for the entire family. It still is.” —Steward Leonard Jr., </li></ul></ul><ul><ul><li>After losing 2 year-old child </li></ul></ul>
  14. 14. Personal Benefit <ul><ul><li>Give to areas that bring personal joy. </li></ul></ul><ul><ul><li>Many arts and athletics donors give from personal motivations. </li></ul></ul><ul><ul><li>Often describe interests in terms of community benefit. </li></ul></ul><ul><ul><ul><li>We need a thriving arts community. </li></ul></ul></ul><ul><ul><ul><li>A winning team is good for our city. </li></ul></ul></ul>
  15. 15. Personal Benefit <ul><ul><li>“ I'm 78 and want OSU to be competitive in the Big 12 before I'm gone.” —T. Boone Pickens </li></ul></ul><ul><ul><li>“ Film is history. How can that not be an important part of society?” —George Lucas, On $175 million gift to USC </li></ul></ul>
  16. 16. Obligation or Duty? <ul><ul><li>Very prevalent in religious giving. </li></ul></ul><ul><ul><li>“ Giving-back” is a common obligation message. </li></ul></ul><ul><ul><li>Pledge drives in broadcasting exemplify this approach. </li></ul></ul><ul><ul><li>Although a strong personal motivation, when used in messaging (from a nonprofit) it can have reverse effects. </li></ul></ul>
  17. 17. Obligation or Duty? <ul><ul><li>“ I'm doing it because I earn far out of proportion to what I am worth to this world.” —Lorry I. Lokey </li></ul></ul>
  18. 18. Loyalty <ul><ul><li>Loyalty is an earned motivation. </li></ul></ul><ul><ul><li>Whether from fundraising or from other experiences, loyalty builds up over time. </li></ul></ul><ul><ul><li>Commonly incorporates nostalgia messages. </li></ul></ul>
  19. 19. Loyalty Needs Needs met consistently Loyalty + =
  20. 20. How do we consistently meet prospect needs? <ul><ul><li>Systematic Prospect Management </li></ul></ul>
  21. 21. Benefits <ul><ul><li>Managing complex portfolios with simple processes. </li></ul></ul><ul><ul><li>Unified and consistent communication with constituents. </li></ul></ul><ul><ul><li>Prioritization of major gift prospects. </li></ul></ul><ul><ul><li>Keeping on track with cultivation. </li></ul></ul><ul><ul><li>Enabling research to support major gift officer work. </li></ul></ul>
  22. 22. Threats <ul><ul><li>Shadow systems. </li></ul></ul><ul><ul><li>Offline brains. </li></ul></ul><ul><ul><li>Lack of trust in the system. </li></ul></ul><ul><ul><li>Lack of participation in the system. </li></ul></ul>
  23. 23. Prospect Management Process Summary
  24. 24. Overall Process (following base development) Market Research Identification with screening and modeling Prospect Research Qualification with data Field Research Discovery / qualification through interaction Plan Strategy Solicitation Stewardship Cultivation Major Gift Fundraising Cycle
  25. 25. Process Staging <ul><ul><li>Let’s review the stages. </li></ul></ul><ul><ul><li>From the anonymous record on the database to the major gift donor in stewardship. </li></ul></ul>
  26. 26. <ul><ul><li>Identification </li></ul></ul><ul><ul><li>Market Research </li></ul></ul><ul><ul><li>techniques including: </li></ul></ul><ul><ul><li>Wealth Screening </li></ul></ul><ul><ul><li>Surveys </li></ul></ul><ul><ul><li>Data Mining </li></ul></ul><ul><ul><li>Peer Screening </li></ul></ul>Anonymous Records
  27. 27. Leads Suspects with unverified capacity, propensity, attachment, interests, etc. (coding begins, often into pools by funding priorities). Qualification Prospect Research techniques to verify capacity, propensity, attachment, and interests through individual-level research.
  28. 28. Qualified Leads Suspects with verified capacity, propensity, attachment, interests, etc. Discovery Field research conducted by gift officer to verify capacity, propensity, attachment, and interests through interaction.
  29. 29. Is this a Prospect? Not a Prospect Consider other fundraising strategies. Not a Prospect Now Future prospect. Reminder set for resuming contact. Yes No Not Yet Prospect Capacity, propensity, attachment, interests, etc., verified through discovery. Strategy in place.
  30. 30. Stewardship Stewardship Solicitation Cultivation Strategy Development
  31. 31. Data Driven Metrics
  32. 32. Objectives of Prospect Management <ul><ul><li>Feed the pipeline with suspects. </li></ul></ul><ul><ul><li>Qualify the suspects. </li></ul></ul><ul><ul><li>Develop strong portfolios. </li></ul></ul><ul><ul><li>Develop cultivation strategies to align case and personal values. </li></ul></ul><ul><ul><li>“ Move” prospects with financial capacity closer to the organization. </li></ul></ul><ul><ul><li>Solicit prospects at the appropriate amount. </li></ul></ul><ul><ul><li>Strategic stewardship to “move” prospects back into cultivation. </li></ul></ul>
  33. 33. Possible metrics: Feeding the Pipeline <ul><ul><li>New suspects identified each month/year. </li></ul></ul><ul><ul><li>Research qualification productivity. </li></ul></ul><ul><ul><ul><li>Suspects researched. </li></ul></ul></ul><ul><ul><ul><li>Suspects qualified and forwarded for discovery. </li></ul></ul></ul><ul><ul><ul><li>Efficiency of qualification work (relative to level). </li></ul></ul></ul><ul><ul><li>Cost-benefit of screening and data mining projects. </li></ul></ul><ul><ul><li>Ratings. </li></ul></ul><ul><ul><li>Overall pool volume and capacity. </li></ul></ul><ul><ul><li>Program-specific volume and capacity. </li></ul></ul>
  34. 34. Possible metrics: Qualifying the Suspects <ul><ul><li>Effectively “passing the ball” from research to the frontline (ratio of referrals to discovery meetings). </li></ul></ul><ul><ul><li>Numbers of discovery contacts made by gift officers. </li></ul></ul><ul><ul><li>Conversion rates (from suspect to prospect) by gift officer—controlling for capacity and affinity measurements. </li></ul></ul>
  35. 35. Monitor Portfolios <ul><ul><li>Evaluate contact and yield activity. </li></ul></ul><ul><ul><li>Evaluate gift officer skill sets in relation to cultivation cycle. </li></ul></ul><ul><ul><li>Distribution by capacity and propensity </li></ul></ul><ul><ul><li>Are officers successful with certain segments? </li></ul></ul><ul><ul><li>Are they successful at certain activities? </li></ul></ul>Test aligning gift officers to prospects with aligning characteristics.
  36. 36. Cultivation Strategies <ul><ul><li>Strategies in place for all managed prospects. </li></ul></ul><ul><ul><ul><li>Target ask amount, project, and date. </li></ul></ul></ul><ul><ul><ul><li>Plan for building affinity and aligning interests. </li></ul></ul></ul><ul><ul><ul><li>Thoughtful strategies. </li></ul></ul></ul>
  37. 37. Possible metrics: Moves <ul><li>Contacts/Personal visits made. </li></ul><ul><ul><li>Cultivation contacts by type: </li></ul></ul><ul><ul><ul><li>Awareness activities. </li></ul></ul></ul><ul><ul><ul><li>Involvement activities. </li></ul></ul></ul><ul><ul><ul><li>Ownership reinforcement activities. </li></ul></ul></ul><ul><ul><li>Time in stage (days/weeks). </li></ul></ul><ul><ul><li>Time between contacts. </li></ul></ul><ul><ul><li>Average time from strategy to proposal submission. </li></ul></ul>
  38. 38. Possible metrics: Solicitation <ul><ul><li>Capacity vs. targeting. </li></ul></ul><ul><ul><ul><li>Important to have prospect research participation. </li></ul></ul></ul><ul><ul><ul><li>Average gap ratio by gift officer. </li></ul></ul></ul><ul><ul><li>Ask amounts vs. expected amounts. </li></ul></ul><ul><ul><li>Solicitation contacts by type. </li></ul></ul><ul><ul><ul><li>Proposals submitted. </li></ul></ul></ul><ul><ul><ul><li>Visits necessary to close. </li></ul></ul></ul><ul><ul><li>Average time to close proposals. </li></ul></ul><ul><ul><li>Yield rates. </li></ul></ul><ul><ul><li>Production rates (dollar and volume respective to officer type and portfolio distribution). </li></ul></ul>
  39. 39. Possible metrics: Strategic Stewardship <ul><ul><li>Dates to resume cultivation for all “managed” stewardship prospects. </li></ul></ul><ul><ul><li>Stewardship strategies: “How will we move this prospect back into cultivation?” </li></ul></ul><ul><ul><li>Receipted/acknowledged/recognized. </li></ul></ul><ul><ul><li>Endowment reporting frequency and level appropriate for current or future gift level. </li></ul></ul>
  40. 40. Key to Reporting <ul><ul><li>Data that has an impact on results—rather than untested assumptions and rules of thumb. </li></ul></ul><ul><ul><li>Benchmark reports showing performance on impact variables and progress towards goal. </li></ul></ul><ul><ul><li>Focusing attention on high impact—low performance. </li></ul></ul>Reinforce Here Last Focus Here Third Reinforce Here Second Focus Here First
  41. 41. Data Preparation and Modeling: Report Inventory Name of Report Purpose Key Data Elements Distribution Frequency Person/s Responsible 1 2 3 4 5 6 7 8 9 10
  42. 42. Customized Cultivation Strategies
  43. 43. This backpack is on its way to Alaska for a hiking trip.
  44. 44. This one is headed for a beach vacation in Mexico.
  45. 45. What would you pack in these backpacks?
  46. 46. This young alum became very wealthy quickly by starting a business.
  47. 47. This successful faculty member is about to retire after receiving a prestigious award.
  48. 48. This community member had a granddaughter cared for in the university hospital.
  49. 49. This guy hires lots of your alumni.
  50. 50. What would you pack in these backpacks?
  51. 51. Unique Performance Drivers <ul><ul><li>Different prospects require different strategies. </li></ul></ul><ul><ul><li>At the cultivation level, this may be intuitive. </li></ul></ul><ul><ul><li>From a prospecting and prospect management perspective, it is more difficult to measure. </li></ul></ul><ul><ul><li>Data mining is an effective strategy for developing performance driver strategies. </li></ul></ul>
  52. 52. Quantifying Performance Drivers Using Data Mining <ul><ul><li>Determine business process and goals. </li></ul></ul><ul><ul><li>Identify segments. </li></ul></ul><ul><ul><li>Gather behavioral and geo-demographic data. </li></ul></ul><ul><ul><li>Model performance drivers for unique clusters. </li></ul></ul><ul><ul><li>Evaluate and implement. </li></ul></ul>
  53. 53. Identify Segments <ul><ul><li>Naturally Occurring Segments </li></ul></ul><ul><ul><ul><li>Age/Graduation Decades. </li></ul></ul></ul><ul><ul><ul><li>Alumni, Friends, Parents. </li></ul></ul></ul><ul><ul><ul><li>Industry of Work. </li></ul></ul></ul><ul><ul><ul><li>Source of Wealth (family, corporate success, and entrepreneur). </li></ul></ul></ul><ul><ul><li>Derived Segments </li></ul></ul><ul><ul><ul><li>Giving Characteristics. </li></ul></ul></ul><ul><ul><ul><li>Cluster Models. </li></ul></ul></ul>
  54. 54. Gather Behavioral Data for All Constituents <ul><ul><li>Alumni event attendance. </li></ul></ul><ul><ul><li>Chalk-talks. </li></ul></ul><ul><ul><li>Met the president. </li></ul></ul><ul><ul><li>Member of primary boards. </li></ul></ul><ul><ul><li>Member of advisory committees. </li></ul></ul><ul><ul><li>Number of visits. </li></ul></ul><ul><ul><li>Average time between visits. </li></ul></ul><ul><ul><li>Time between first gift and first major gift. </li></ul></ul><ul><ul><li>Time between first visit and first or next major gift. </li></ul></ul><ul><ul><li>Lectures on campus. </li></ul></ul><ul><ul><li>Fine arts events. </li></ul></ul><ul><ul><li>Athletics tickets (in box with leadership). </li></ul></ul><ul><ul><li>Used a volunteer solicitor. </li></ul></ul><ul><ul><li>Etc. </li></ul></ul>Consider first, things the institution does to engage a prospect.
  55. 55. Model Performance Drivers for Unique Clusters <ul><li>Correlation Analysis </li></ul><ul><ul><li>Create split groups of random prospects and prospects by cluster. </li></ul></ul><ul><ul><li>Run correlation estimates between behavioral data points and major giving. </li></ul></ul><ul><li>Discriminant Modeling </li></ul><ul><ul><li>Classify each segment as a number (ex. 1–6) in one field. </li></ul></ul><ul><ul><li>Use this field as your grouping variable. </li></ul></ul><ul><ul><li>Use the behavioral data and/or other data as the independents. </li></ul></ul>
  56. 56. Evaluation <ul><ul><li>Identify the top 5–10 behavioral data points from correlation and discriminant modeling. </li></ul></ul><ul><ul><li>Build custom cultivation strategies for a study group using these top drivers. </li></ul></ul><ul><ul><li>Maintain a control group where the drivers are not specifically incorporated (business as usual). </li></ul></ul><ul><ul><li>Does the success rate increase in the study group? </li></ul></ul><ul><ul><li>Continue to tune the progression overtime. </li></ul></ul>
  57. 57. Implementation <ul><ul><li>Apply the recommended cultivation paths in strategy building forms and discussions. </li></ul></ul><ul><ul><li>Consider same approach for direct mail and phone strategies. </li></ul></ul><ul><ul><li>Continuously refine over time—remember to try alternate clusters. </li></ul></ul>
  58. 58. Now that you know what to pack …
  59. 59. Enjoy Your Trip!
  60. 60. 7251 Ohms Lane Minneapolis, Minnesota 55439 ph: 952-921-0111 fax: 952-921-0109 email: donorcast@bwf.com website: www.donorcast.com Joshua Birkholz Principal, Bentz Whaley Flessner Director of DonorCast 79767/JMB:cry/021009

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