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 InvestedApril 17, 2013

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Agenda

Data is the Foundation of StrategyUsing 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

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What is Analytics?

Analytics + Analysis = Data Informed Decision Making

AnalysisThe process of breaking a complex topic or substance into smaller parts to gain a better understanding of it.

AnalyticsThe process of developing optimal or realistic decision recommendations based on insights derived through analysis

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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

Wisdom

Knowledge

Information

Data

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All Strategy Derives from Organizational Objectives and Goals

Vision

Mission

Objectives

Goals

Strategies

Tactics

Increase capacity to transport excess food to those in needIncrease major gift revenue by 20%

A world without hungerFeed the hungry

Invest in screening dataUse data to optimize portfolios and ask values

Answer “Why?”

Questions

Answer “What?”

Questions

Answer “How?”

Questions

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

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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 cultivationConstituents in shaded in blue are second tier prospects and should be engaged in high-touch cultivation at the annual giving level

Capa

city

Likelihood to Give

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Use Data to Optimize Portfolios by Finding the Best Prospects

2 2 47

41 30 525

3,626 2,397 8,328

Capa

city

Likelihood to Give

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 cultivationConstituents in shaded in blue are second tier prospects and should be engaged in high-touch cultivation at the annual giving level

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

Likelihood to Give

Capacity Range Very Low Low Moderat

e High Very High Total

$5M+ 1 3 2 6

$1M up to $5M 2 1 19 23 45

$500K up to $1M 7 11 50 39 107

$250K up to $500K 34 19 301 135 489

$100K up to $250K 139 60 905 358 1,462

$50K up to $100K 6 490 469 2,155 774 3,894

$25K up to $50K 186 795 1,037 1,288 761 4,067

$15K up to $25K 132 464 498 607 365 2,066

Up to $15K 127 278 67 216 146 834

Unrated 525 484 266 466 287 2,028

Total 976 2,693 2,429 6,010 2,890 14,998

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Likelihood to Give



$5M+ 1 3 2 6

$1M up to $5M 2 1 19 23 45

$500K up to $1M 7 11 50 39 107

$250K up to $500K 34 19 301 135 489

$100K up to $250K 139 60 905 358 1,462

$50K up to $100K 6 490 469 2,155 774 3,894

$25K up to $50K 186 795 1,037 1,288 761 4,067

$15K up to $25K 132 464 498 607 365 2,066

Up to $15K 127 278 67 216 146 834

Unrated 525 484 266 466 287 2,028

Total 976 2,693 2,429 6,010 2,890 14,998

Quickly Identify the Best Prospects for Major Gift Cultivation

28 shaded green have high capacity, high likelihood to give

3 223

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Likelihood to Give



$5M+ 1 3 2 6

$1M up to $5M 2 1 19 23 45

$500K up to $1M 7 11 50 39 107

$250K up to $500K 34 19 301 135 489

$100K up to $250K 139 60 905 358 1,462

$50K up to $100K 6 490 469 2,155 774 3,894

$25K up to $50K 186 795 1,037 1,288 761 4,067

$15K up to $25K 132 464 498 607 365 2,066

Up to $15K 127 278 67 216 146 834

Unrated 525 484 266 466 287 2,028

Total 976 2,693 2,429 6,010 2,890 14,998

Identify Second Tier Prospects for High-Touch Leadership Giving Program

1950 39

301 135

544 shaded in blue are also good major gift candidates

Portfolios are often selected based on past giving history…

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Affinity ScoreCapacity Range Very Low Low Moderate High Very High Total

$5M+ $7,983,010 $7,983,010

$1M up to $5M $10,481,105

$10,481,105

$500K up to $1M $4,120,173 $4,120,173

$250K up to $500K $370,479 $341,000 $440,241 $6,786,036 $7,937,755

$100K up to $250K $601,489 $332,565 $1,545,482 $6,350,829 $8,830,365

$50K up tp $100K $196,430 $243,806 $712,639 $3,133,520 $4,286,395

$25K up to $50K $94,259 $289,513 $201,514 $583,946 $1,119,834 $2,289,066

$15K up to $25K $39,287 $24,468 $73,790 $134,884 $272,430

Up to $15K $40,226 $10,961 $36,692 $87,880

Unrated $27,383 $15,889 $11,409 $9,571 $64,252

Total $161,868 $1,513,087

$1,143,353

$3,378,469

$40,155,653

$46,352,430

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 givingValues in the cells are the sum of the capacity of each individual who falls within the range

$46,352,430

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…

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243 Optimal Prospects @$286MM(Selected Based on Capacity and Likelihood Ratings)

Affinity Score

Capacity Range Very Low Low Moderate High Very High Total

$5M+ 89,015,427 19,223,723 108,239,150

$1M up to $5M 35,938,650 48,700,146 84,638,796

$500K up to $1M 34,221,647 27,739,460 61,961,108

$250K up to $500K 30,862,459 30,862,459

$100K up to $250K

$50K up tp $100K

$25K up to $50K

$15K up to $25K

Up to $15K

Unrated

Total 159,175,725 126,525,788 285,701,513

Selecting the 243 optimal prospects yields $286MM under managementThis is 6 times the capacity under management

89,015,427 19,223,723 108,239,150

35,938,650 48,700,146 84,638,796

34,221,647 27,739,460 61,961,108

30,862,459 30,862,459

285,701,513

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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 assignedCurrently assigned prospects with lower capacity/likelihood scores should only be kept under management if they are close to or in the solicitation phaseThe 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…

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Data including Capacity Estimates Allow Analysis of Major Gift Solicitations

Prospect Manager or Major

Gift Officer

Average Capacity

of Prospects

Average Ask

Amount

% of Capacity

Asked

Average Gift

Amount% of Ask Received

% of Capacity Received

Jocelyn $95,617 $24,286 25% $10,242 42% 11%

Sarah $167,708 $24,167 14% $16,667 69% 10%

Total $131,662 $24,226 18% $13,455 56% 10%

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This Organization Receives on Average Only 10% of Potential Gift Value

Prospect Manager

Average Capacity

of Prospects

Average Ask

Amount

% of Capacity

Asked

Average Gift



Jocelyn $95,617 $24,286 25% $10,242 42% 11%

Sarah $167,708 $24,167 14% $16,667 69% 10%

Total $131,662 $24,226 18% $13,455 56% 10%

Analysis shows gifts received are valued at approximately 10% of capacity

11%

10%

10%

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Gift Officers May be Defaulting to the Minimum Major Gift Level

Prospect Manager

Average Capacity

of Prospects

Average Ask

Amount

% of Capacity

Asked

Average Gift



Jocelyn $95,617 $24,286 25% $10,242 42% 11%

Sarah $167,708 $24,167 14% $16,667 69% 10%

Total $131,662 $24,226 18% $13,455 56% 10%

With a minimum major gift amount of $25K, it looks like prospect managers may be satisfied asking for gifts of $25K

$24,286

$24,167

$24,226

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With Gifts Closing at Just 56% of Asks, There May be Money Left on the Table

Prospect Manager

Average Capacity

of Prospects

Average Ask

Amount

% of Capacity

Asked

Average Gift



Jocelyn $95,617 $24,286 25% $10,242 42% 11%

Sarah $167,708 $24,167 14% $16,667 69% 10%

Total $131,662 $24,226 18% $13,455 56% 10%

On average, they are receiving gifts of $10K-$15K

$10,242

$16,667

$13,455

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

Prospect Manager

Average Capacity

of Prospects

Average Ask

Amount

% of Capacity

Asked

Average Gift



Jocelyn $95,617 $24,286 25% $10,242 42% 11%

Sarah $167,708 $24,167 14% $16,667 69% 10%

Total $131,662 $24,226 18% $13,455 56% 10%

$131,662 x 10% x 20 Gifts

$131,662 10%

$131,662 x 10% x 20 Gifts = $263,324

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

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Prospect Manager

Average Capacity

of Prospects

Average Ask

Amount

% of Capacity

Asked

Average Gift



Jocelyn $95,617 $24,286 25% $10,242 42% 11%

Sarah $167,708 $41,927 25% $28,929 69% 17%

Total $131,662 $32,915 25% $19,585 59% 15%

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

$41,927 25%

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Prospect Manager

Average Capacity

of Prospects

Average Ask

Amount

% of Capacity

Asked

Average Gift



Jocelyn $95,617 $24,286 25% $10,242 42% 11%

Sarah $167,708 $41,927 25% $28,929 69% 17%

Total $131,662 $32,915 25% $19,585 59% 15%

Higher Asks Lead to Higher Closed Gift Amounts

This leads to a 17% of capacity average gift for Sarah and 15% overall 15%

17%

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Prospect Manager

Average Capacity

of Prospects

Average Ask

Amount

% of Capacity

Asked

Average Gift



Jocelyn $95,617 $24,286 25% $10,242 42% 11%

Sarah $167,708 $41,927 25% $28,929 69% 17%

Total $131,662 $32,915 25% $19,585 59% 15%

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

15%$131,662

$131,662 x 15% x 20 Gifts $131,662 x 15% x 20 Gifts = $394,986

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All else being held constant, If 20 gifts close at 15% of capacity on average, this will result in $394,986 in revenueThis represents an additional $131,662 in revenue over prior asksAsk amounts do not need to be a set and static percentage of capacity, but should be evaluated on an individual basisQuestions 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

Strategy Grows Out of Analysis

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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 $2MMBy 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 $131,662If 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

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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.”

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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.”

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Evaluating Major Gift Activities

Stage of Prospect Development

Prospect Manager Discovery Cultivation Solicitation Stewardship Total

Jocelyn 27 56 33 36 152

Sarah 16 42 4 3 65

Total 43 98 37 39 217

Percent in Stage 20% 45% 17% 18% 100%

“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.”

Are your portfolio’s balanced?

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Common Major Gift Officer Performance Metrics

• For Full-time MGO: 100-150Number of Personal Visits

• 50% to 75% depending on stages of portfolioPercentage of Unique Visits

• 15 to 25, varies by wealth of portfolioProposals Submitted

• 5 to 20, roughly 30% to 60% of asksNumber of Gifts Closed

• 60% to 85% of “ask” or solicitationAmount of Gifts Closed

• Provides incentive for teamwork and discourages hoarding and poaching of prospectsAssists

• Dollars raised/costs of fundraising (including salaries)ROI

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Major Gift Metrics and Benchmarks

Metric Standard Benchmarks* Organization Benchmarks

Low High Example Your Historic Your GoalPortfolio Size 100 200 150 % in Discovery 10% 30% 18% % in Cultivation 30% 60% 40% % in Solicitation 20% 30% 25% % in Stewardship 10% 20% 17% # of Solicitations per Year 38 % of Solicitations Closing per Year 33% 66% 50% # of Solicitations Closing per Year 19 Time to Close a Major Gift 12 months 30 months % of Ask Received 60% 85% # of Research Rated Leads per Gift 30 # of Prospects in Discovery per Gift 6 # of Prospects in Cultivation per Gift 3

*Benchmarks were obtained from a literature review and represent our best estimates from internal and external sources.

Percentages and values will vary by organization depending on maturity of program, stage of campaign, geographic region, wealth profile of constituency, level of affinity of constituency and many other factors. Benchmarks should be used with caution, and it is always best to benchmark against your historic results

Forecasting Major Gift Results with Pipeline Analysis

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Gift Levels

Number of Gifts Needed

Dollars Needed Per Level

Cumulative Total

Needed

Cumulative Total

Received

CumulativePercent Received

$ Value of Proposals Submitted

Pipeline Expected Yield (40%)

$ Value of Proposals Planned (1-3

months)

Future Pipeline Expected Yield (20%)

Total Expected Pipeline

$400,000 1 $400,000 $400,000 $500,000 25% $0 $0 $0 $0 $0

$200,000 1 $200,000 $600,000 $700,000 35% $0 $0 $0 $0 $0

$100,000 2 $200,000 $800,000 $800,000 40% $200,000 $80,000 $0 $0 $80,000

$50,000 3 $150,000 $950,000 $850,000 43% $50,000 $20,000 $50,000 $10,000 $110,000

$30,000 3 $90,000 $1,040,000 $910,000 46% $30,000 $12,000 $30,000 $6,000 $128,000

$20,000 10 $200,000 $1,240,000 $1,070,000 54% $20,000 $8,000 $20,000 $4,000 $140,000

$15,000 12 $180,000 $1,420,000 $1,160,000 58% $45,000 $18,000 $15,000 $3,000 $161,000

$10,000 15 $150,000 $1,570,000 $1,210,000 61% $60,000 $24,000 $10,000 $2,000 $187,000

$5,000 20 $100,000 $1,670,000 $1,230,000 62% $20,000 $8,000 $30,000 $6,000 $201,000

$3,000 30 $90,000 $1,760,000 $1,242,000 62% $3,000 $1,200 $75,000 $15,000 $217,200

$2,000 40 $80,000 $1,840,000 $1,274,000 64% $12,000 $4,800 $36,000 $7,200 $229,200

$1,000 50 $50,000 $1,890,000 $1,299,000 65% $10,000 $4,000 $15,000 $3,000 $236,200

Varies Many $110,000 $2,000,000 $1,333,000 67% $0 $0 $76,000 $15,200 $251,400

Campaign Pipeline Report

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Campaign Pipeline Analysis

Year One Year Two Year ThreeStudy & Planning Phase Quiet Phase Public Phase 9-12 Months 12 – 15 Months 6-12 Months

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

$2,000,000

Pipeline + Receipts

Receipts

Pipeline

Goal

Reporting Results For Maximum Impact

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Reporting for Maximum Impact

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Which Has More Impact?

2007 2008 2009 2010 20110%2%4%6%8%

10%12%14%16%

% of donors renewing after 1st gift Year

% of donors renewing

after 1st gift2007 14%2008 13%2009 11%2010 12%2011 10%

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

If you are demonstrating a trend, use a graph

Year

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Funding by Constituency

Board 17%Volunteers 20%Members 15%Service

Recipients 19%Event

Particpants 4%Friends 25%

17%

20%

15%19%

4%

25%

BoardVolunteersMembersService Recip-ientsEvent ParticpantsFriends

Funding by Constituency

If you are demonstrating parts of a whole, use a pie chart

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Ability

Affini

ty

317 Major Gift

Prospects

962 High Touch

Cultivation Prospects

1500 Annual Giving

Prospects

2500 Do Not Solicit

Segments Number

Low Affinity/Low Capacity2,500

High Affinity/Low Capacity 1,500

Low Affinity/High Capacity 962

High Affinity/High Capacity 317

If you are showing information in two dimensions, use a matrix

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Average time from Identification to closed gift: 36 months Average number of face to face contacts: 6Average number of touch points (non-substantive contacts): 8

If you are showing information in time, use a timeline

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Or This?

Key:

----

Average Number of Touch Points 8

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Presenting Information Visually

When working in Excel™, take the next step to explore chartsIn PowerPoint™, use Smart Art optionsWhen explaining a process, use a flow chartWhen explaining a trend, use a graphWhen comparing categories, use a bar chartWhen explaining history, use a timelineWhen 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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Tony GlowackiPresident & [email protected]

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data driven major giving: how analytics can move your prospects from indifferent to invested

Documents

knowledgeapplication

data leads

status data

high capacity

major gifts

best major gift

high affinity

screening datause data