Data Driven Advancement

The Plan Introduction and Overview. Prospect Management Process Summary. Data Driven Metrics Customized Strategies.

Why do some organizations raise twice the dollars with the same staffing? Prospect Potential Nature of the constituency. Strategy Identification and prioritization of the prospect pool. Integration into a prospect pipeline. Execution A “major” gift mentality. A culture of solicitation-focused case stating.

A successful prospect management system … Facilitates relationships between your organization and prospects. Leads to solicitation—awareness, involvement, and ownership. Has agenda-driven moves. Is guided by the case for support. Contents of strategies align prospect interests with organizational priorities.

Why Do Donors Give? Their value portfolio is in alignment with your value portfolio.

Value Portfolio For an individual: Collection of interests, motivations, life goals, and firmly held beliefs guiding a person through life. For a nonprofit: Collection of purposes, motivations, organizational goals, mission, and vision defining its purpose for existing.

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.

Common Giving Motivations Global and historic impact. Emotional response. Personal benefit. Obligation or duty. Loyalty.

Global and Historic Impact Want to change the world for the better. Often view philanthropy as an investment in the future of society. Will fund research, service programs, outreach initiatives, transformational “big ideas,” etc.

Global and Historic Impact “ 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 “ I decided to try and preserve things that, but for my money, might go away forever. ” —Robert W. Wilson

Emotional Response Have a broad sense of empathy. Respond to emotional appeals. Give in response to times of crisis (personal or external). Prevalent in direct mail and online (Katrina, tsunami, etc.). Often tricky to convert to major donors unless it strikes close to home.

Emotional Response “ 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., After losing 2 year-old child

Personal Benefit Give to areas that bring personal joy. Many arts and athletics donors give from personal motivations. Often describe interests in terms of community benefit. We need a thriving arts community. A winning team is good for our city.

Personal Benefit “ I'm 78 and want OSU to be competitive in the Big 12 before I'm gone.” —T. Boone Pickens “ Film is history. How can that not be an important part of society?” —George Lucas, On $175 million gift to USC

Obligation or Duty? Very prevalent in religious giving. “ Giving-back” is a common obligation message. Pledge drives in broadcasting exemplify this approach. Although a strong personal motivation, when used in messaging (from a nonprofit) it can have reverse effects.

Obligation or Duty? “ I'm doing it because I earn far out of proportion to what I am worth to this world.” —Lorry I. Lokey

Loyalty Loyalty is an earned motivation. Whether from fundraising or from other experiences, loyalty builds up over time. Commonly incorporates nostalgia messages.

Loyalty Needs Needs met consistently Loyalty + =

How do we consistently meet prospect needs? Systematic Prospect Management

Benefits Managing complex portfolios with simple processes. Unified and consistent communication with constituents. Prioritization of major gift prospects. Keeping on track with cultivation. Enabling research to support major gift officer work.

Threats Shadow systems. Offline brains. Lack of trust in the system. Lack of participation in the system.

Prospect Management Process Summary

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

Process Staging Let’s review the stages. From the anonymous record on the database to the major gift donor in stewardship.

Identification Market Research techniques including: Wealth Screening Surveys Data Mining Peer Screening Anonymous Records

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.

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.

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.

Stewardship Stewardship Solicitation Cultivation Strategy Development

Objectives of Prospect Management Feed the pipeline with suspects. Qualify the suspects. Develop strong portfolios. Develop cultivation strategies to align case and personal values. “ Move” prospects with financial capacity closer to the organization. Solicit prospects at the appropriate amount. Strategic stewardship to “move” prospects back into cultivation.

Possible metrics: Feeding the Pipeline New suspects identified each month/year. Research qualification productivity. Suspects researched. Suspects qualified and forwarded for discovery. Efficiency of qualification work (relative to level). Cost-benefit of screening and data mining projects. Ratings. Overall pool volume and capacity. Program-specific volume and capacity.

Possible metrics: Qualifying the Suspects Effectively “passing the ball” from research to the frontline (ratio of referrals to discovery meetings). Numbers of discovery contacts made by gift officers. Conversion rates (from suspect to prospect) by gift officer—controlling for capacity and affinity measurements.

Monitor Portfolios Evaluate contact and yield activity. Evaluate gift officer skill sets in relation to cultivation cycle. Distribution by capacity and propensity Are officers successful with certain segments? Are they successful at certain activities? Test aligning gift officers to prospects with aligning characteristics.

Cultivation Strategies Strategies in place for all managed prospects. Target ask amount, project, and date. Plan for building affinity and aligning interests. Thoughtful strategies.

Possible metrics: Moves Contacts/Personal visits made. Cultivation contacts by type: Awareness activities. Involvement activities. Ownership reinforcement activities. Time in stage (days/weeks). Time between contacts. Average time from strategy to proposal submission.

Possible metrics: Solicitation Capacity vs. targeting. Important to have prospect research participation. Average gap ratio by gift officer. Ask amounts vs. expected amounts. Solicitation contacts by type. Proposals submitted. Visits necessary to close. Average time to close proposals. Yield rates. Production rates (dollar and volume respective to officer type and portfolio distribution).

Possible metrics: Strategic Stewardship Dates to resume cultivation for all “managed” stewardship prospects. Stewardship strategies: “How will we move this prospect back into cultivation?” Receipted/acknowledged/recognized. Endowment reporting frequency and level appropriate for current or future gift level.

Key to Reporting Data that has an impact on results—rather than untested assumptions and rules of thumb. Benchmark reports showing performance on impact variables and progress towards goal. Focusing attention on high impact—low performance. Reinforce Here Last Focus Here Third Reinforce Here Second Focus Here First

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

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.

Unique Performance Drivers Different prospects require different strategies. At the cultivation level, this may be intuitive. From a prospecting and prospect management perspective, it is more difficult to measure. Data mining is an effective strategy for developing performance driver strategies.

Quantifying Performance Drivers Using Data Mining Determine business process and goals. Identify segments. Gather behavioral and geo-demographic data. Model performance drivers for unique clusters. Evaluate and implement.

Identify Segments Naturally Occurring Segments Age/Graduation Decades. Alumni, Friends, Parents. Industry of Work. Source of Wealth (family, corporate success, and entrepreneur). Derived Segments Giving Characteristics. Cluster Models.

Gather Behavioral Data for All Constituents Alumni event attendance. Chalk-talks. Met the president. Member of primary boards. Member of advisory committees. Number of visits. Average time between visits. Time between first gift and first major gift. Time between first visit and first or next major gift. Lectures on campus. Fine arts events. Athletics tickets (in box with leadership). Used a volunteer solicitor. Etc. Consider first, things the institution does to engage a prospect.

Model Performance Drivers for Unique Clusters Correlation Analysis Create split groups of random prospects and prospects by cluster. Run correlation estimates between behavioral data points and major giving. Discriminant Modeling Classify each segment as a number (ex. 1–6) in one field. Use this field as your grouping variable. Use the behavioral data and/or other data as the independents.

Evaluation Identify the top 5–10 behavioral data points from correlation and discriminant modeling. Build custom cultivation strategies for a study group using these top drivers. Maintain a control group where the drivers are not specifically incorporated (business as usual). Does the success rate increase in the study group? Continue to tune the progression overtime.

Implementation Apply the recommended cultivation paths in strategy building forms and discussions. Consider same approach for direct mail and phone strategies. Continuously refine over time—remember to try alternate clusters.

Now that you know what to pack …

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

Data Driven Advancement

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Data Driven Advancement