Data Driven Major Giving: How Analytics Can Move Your Prospects from Indifferent to Invested

Data Driven Major Giving: How Analytics Can Move Your Prospects from Indifferent to Invested April 17, 2013

Agenda • Data is the Foundation of Strategy • Using Data to • Identify Major Gift Prospects • Optimize Major Gift Portfolios • Define Ask Amounts • The Prospect Management Process • Commonly Measured Metrics and Suggested Benchmarks • Forecasting Major Giving Results Based On Pipeline Analysis • Reporting Results

Data is the Foundation of Strategy

What is Analytics? Analysis The process of breaking a complex topic or substance into smaller parts to gain a better understanding of it. Analytics The process of developing optimal or realistic decision recommendations based on insights derived through analysis Analytics + Analysis = Data Informed Decision Making

Data Leads to Actionable Insight WisdomEvaluated understanding KnowledgeApplication of data and information; answers "how” & “why” questions InformationData that are processed to be useful; provides answers to "who", "what", "where", and "when" questions DataSymbols

All Strategy Derives from Organizational Objectives and Goals • Vision Answer “Why?” Questions A world without hunger Feed the hungry • Mission • Objectives Answer “What?” Questions Increase capacity to transport excess food to those in need Increase major gift revenue by 20% • Goals • Strategies Answer “How?” Questions Invest in screening data Use data to optimize portfolios and ask values • Tactics

Capacity and likelihood to give data identify the best major gift prospects…

Use Data to Optimize Portfolios by Finding the Best Prospects Based on Capacity and Likelihood to Give (or Affinity), an entire constituency can be segmented for application of distinct strategies: For major gifts, constituents with high capacity and high affinity are shaded in green for immediate assignment and cultivation Constituents in shaded in blue are second tier prospects and should be engaged in high-touch cultivation at the annual giving level Capacity Likelihood to Give

Data Appends (Wealth, Demographic and Lifestyle Attributes) Allow Evaluation of All Constituents

Quickly Identify the Best Prospects for Major Gift Cultivation 28 shaded green have high capacity, high likelihood to give

Identify Second Tier Prospects for High-Touch Leadership Giving Program 544 shaded in blue are also good major gift candidates

Portfolios are often selected based on past giving history…

The Current Portfolios Under Management have a Total Value of $46MM • 243 prospects are currently under management (assigned to a gift officer or volunteer) • These were selected based on total giving • Values in the cells are the sum of the capacity of each individual who falls within the range • The total capacity of the prospects under management is the total number in the lower right-hand corner ($46MM)

Potential soars when portfolios are selected based on capacity and likelihood to give ratings…

243 Optimal Prospects @$286MM(Selected Based on Capacity and Likelihood Ratings) • Selecting the 243 optimal prospects yields $286MM under management • This is 6 times the capacity under management

Strategy Grows Out of Analysis • All else being equal, if 20 gifts close at 10% of capacity, this change in portfolio value would result in an additional $2MM ($2,351,452 vs. $381,501) • To activate this potential, any high-likelihood, high-capacity prospects not under management by an individual staff or volunteer should be assigned • Currently assigned prospects with lower capacity/likelihood scores should only be kept under management if they are close to or in the solicitation phase • The second tier of prospects with high capacity and likelihood scores should be “fast-tracked” in high-touch annual giving/cultivation program

Ask amounts are often based on instinct, “gut” feelings, or the comfort level of the solicitor…

Data including Capacity Estimates Allow Analysis of Major Gift Solicitations

This Organization Receives on Average Only 10% of Potential Gift Value Analysis shows gifts received are valued at approximately 10% of capacity

Gift Officers May be Defaulting to the Minimum Major Gift Level With a minimum major gift amount of $25K, it looks like prospect managers may be satisfied asking for gifts of $25K

With Gifts Closing at Just 56% of Asks, There May be Money Left on the Table On average, they are receiving gifts of $10K-$15K

If 20 Gifts are Closed with Gifts Averaging 10% of Capacity, the Organization will Realize $263,324 $131,662 x 10% x 20 Gifts $131,662 x 10% x 20 Gifts = $263,324

If ask amounts are adjusted to reflect capacity on an individual basis, fundraising potential increases…

Adjusting Average Ask Amount Up to 25% of Capacity on Average Leads to Higher Asks Sarah’s asks are adjusted from 14% to 25% of capacity, resulting in an average ask of $41,927

Higher Asks Lead to Higher Closed Gift Amounts This leads to a 17% of capacity average gift for Sarah and 15% overall

If 20 Gifts are Closed with Gifts Averaging 15% of Capacity, the Organization will Realize $394,986 $131,662 x 15% x 20 Gifts = $394,986 $131,662 x 15% x 20 Gifts

Strategy Grows Out ofAnalysis • All else being held constant, If 20 gifts close at 15% of capacity on average, this will result in $394,986 in revenue • This represents an additional $131,662 in revenue over prior asks • Ask amounts do not need to be a set and static percentage of capacity, but should be evaluated on an individual basis • Questions to ask include: • Are we one of this prospect’s top three priorities? • Is this prospect enthusiastic about a particular project or program? • Do we have a funding need that meshes with this prospect’s interests? • What other current commitments do they have? • If gift officers default to a low ask amount, consider training to boost confidence in the ratings and/or confidence in the process

Realize Untapped Fundraising Potential • By analyzing file capacity and modeling likelihood to give, this organization was able to increase capacity under management and (without closing more gifts) increase potential funds raised by $2MM • By analyzing ask amounts in relation to capacity, this organization was able to identify a weakness in their major gift program and by encouraging each gift officer to ask for a minimum of 25% of capacity, increases fundraising potential by $131,662 • If this organization realizes even 10% of this potential $2.1MM gain, they will have realized a Return on Investment (ROI)of 740% based on a $25,000 investment in data and analytics

Prospect Management

The Management Process “Management is concerned with ensuring plans and strategies are implemented, that progress is monitored, that corrective action is taken when required and that results are reported and stakeholders are kept informed.”

Major Gift Maturation Process “It can take 18 to 24 or more months to cultivate and secure a major gift. Therefore, it is as important to measure and manage the activities that lead to major giving as to measure dollars in the door.”

Evaluating Major Gift Activities Are your portfolio’s balanced? “Depending on your stage of campaign, seniority of gift officers, and age of major gift program, you may want to manage the prospect pipeline by emphasizing movement from cultivation into solicitation, or increased activity qualifying new prospects.”

Common Major Gift Officer Performance Metrics

Major Gift Metrics and Benchmarks

Forecasting Major Gift Results with Pipeline Analysis

Campaign Pipeline Report

Campaign Pipeline Analysis Goal Year One Year Two Year Three Study & Planning Phase Quiet Phase Public Phase 9-12 Months 12 – 15 Months 6-12 Months

Reporting Results For Maximum Impact

Reporting for Maximum Impact

Which Has More Impact? If you are demonstrating a trend, use a graph _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Year

Which Has More Impact? If you are demonstrating parts of a whole, use a pie chart Funding by Constituency

Which Has More Impact? If you are showing information in two dimensions, use a matrix 1500 Annual Giving Prospects 317 Major Gift Prospects Affinity 2500 Do Not Solicit 962 High Touch Cultivation Prospects Ability

Which Has More Impact? If you are showing information in time, use a timeline • Average time from Identification to closed gift: 36 months • Average number of face to face contacts: 6 • Average number of touch points (non-substantive contacts): 8

Which Has More Impact? • Or This? Key: ---- Average Number of Touch Points 8

Presenting Information Visually • When working in Excel™, take the next step to explore charts • In PowerPoint™, use Smart Art options • When explaining a process, use a flow chart • When explaining a trend, use a graph • When comparing categories, use a bar chart • When explaining history, use a timeline • When explaining progress in a project, use a Gantt Chart “How you present information can be as important as what you present.”

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Data Driven Major Giving: How Analytics Can Move Your Prospects from Indifferent to Invested