Drakes Bay Fundraising
A Next Generation Fundraising Company

Archive for the ‘Modeling’ Category

Mind the Gap, National Fundraisers

Posted by Christopher Dann
Tuesday June 19, 2012
Categories: Fundraising, Modeling

While we value economies of scale as much as anyone who has thought about the concept, there are points of diminishing return that must be diligently identified. Donor base modeling, for example, has been very useful in helping fundraising find these points.

A recent study produced by the Brookings Institute Metropolitan Policy Program and reported May 31 in the New York Times suggests a point of diminishing returns national fundraisers should study carefully, especially those heeding the cry to provide better marketing communications support of their increasing expensive programs.

The study shows a widening gap in education attainment among the country’s largest 100 metropolitan areas, the areas one would focus on for media support. As education, second only to age, is a prime determining factor in both giving capacity and disposition – particularly for nonsectarian charity – paying attention to the emergent divide in educational attainment across those 100 metro areas makes economic sense.

The report shows that in 1970, while on average 12% of adults had college degrees in those 100 largest metro areas, only one fell 5 percentage points below the average and four rose 5 percentage points above.

But in 2010, while the overall average – thanks to what David Brooks called the democratization of American higher education – the overall average had risen to 32%, just half of the 100 metro areas were within the 5 percentage point rage of average, more were above, but a great many more were beneath it.

Donor base modeling may still be the best bet for finding points of diminishing return in broad-base, wholesale fundraising. But data like these will prove essential to in two respects: to making economical use of limited advertising and pr campaign dollars in support of fundraising campaigns and in targeting most productive markets for special high-dollar fundraising attention.

Swiss Army Knife – Part 2

Posted by Christopher Dann
Wednesday April 18, 2012
Categories: Fundraising, Modeling, Target Analysis, Uncategorized

The Swiss Army knife is Target Analytics’ new Loyalty Insights modeling utility described in our last post. It’s a utility with a host of varied potential applications to both on-the-ground fundraising campaigns and, as explained in the last post, to individual support business modeling.

We had Target Analytics model donor bases across a variety of sub-sectors: health, human services, public broadcasting, conservation, and cultural-humanities. That there would be differences was predictable. But the nature of the differences was intriguing and truly demonstrated how different individual support models are.

Our next step was to validate the Loyalty Insights model, and we are doing this in several ways.

First, we compared modeling results across that spectrum of organization donor bases to prior research. Those who remember our ground-breaking demonstrations of altruist and values paradigms (if you haven’t or if you have but want a refresher, click here to download a copy), would expect we’d refer back to the findings of that massive data analysis undertaken with Target Analysis six years ago. Four of the seven Loyalty Insight model groups and those organization types that can inarguably be characterized as altruist or values donor-oriented again demonstrated our hypotheses that altruist donors retain less well and provide less value over time than values donors.

Second, we validated a selection of the donor bases modeled through our Donor Base Trend Analysis (DBTA). DBTA gives us very comprehensive assessments of donor base values and trends across six years. It also has capacity for such special analyses as comparative valuations of discrete groups within a donor base.  In this way we have been able to verify Loyalty Insights typecasting through measures of donor loyalty and giving across eleven years of data. We could see, for example, that donors characterized by Loyalty Insights as, to use their terms, “Truly Connected” and “Best of the Best,” had the highest values in terms both of retention and annual cumulative giving, and that the two could be distinguished between them. On the other hand, those characterized as perpetually low-dollar donors could be shown over the years to have deserved that label.

We have begun to validate the model through fundraising campaigns and will have that data in due course. Validation through fundraising campaigns is a two step process. The first step is to simply examine campaign response from the perspective of the Loyalty Insight model’s seven group typecasting. This step is underway in spring and summer campaigns, and it will be followed by tests specific to each of the Loyalty Insight model groups.

A New Swiss Army Knife – Part 1

Posted by Christopher Dann
Tuesday April 17, 2012
Categories: Fundraising, Modeling, Target Analysis

Because we believe loyalty is the single most important attribute of ultimate donor value, we were excited to explore Target Analytics’ new Loyalty Insights model and assess its value to our clients’ fundraising programs.

Essentially, Loyalty Insights examines the giving of an organization’s 24-month donors to the subject organization as well as to organizations in Target’s huge donor database, sorts them into seven groups defined by patterns of giving behavior and consequent value and tags them accordingly.  The Loyalty Insights report also sub-sorts the seven model groups by age ranges and various measures of giving behavior and value.

It’s a campaigner’s tool in a metaphorical way the Swiss Army Knife can be used for wood carving. It is most readily used for shaping campaigns by refining donor selections through an array of new measures.

But its utility extends to such applications as major donor portfolio planning and planned gift prospecting.

Its ultimate value, in our view, is in the several ways Loyalty Insights facilitates individual support business modeling, a practice in which we all need to get very skilled.  Individual support business modeling answers these critical questions:

  • How do I manage the asset my donor base represents for maximum yield and value?
  • How can I maximize return-on-donor base development investments?
  • What share of donors’ wallets can I expect in my sector?
  • What does the Loyalty Insights profile of my sector and my donor base look like?
  • Am I competing as well as I can expect to compete in my sector?

Like the Swiss Army knife, Loyalty Insights is designed for a scalable market. Some of its pieces may not be perfectly suited to all situations and applications, and we’ve found a couple really esoteric examples.  That said, we can’t think of any organization to which this new service wouldn’t be very valuable.

For information, contact Kathy Gallagher at Target Analytics:   kgallagher@targetanalysis.com

Next Generation Fundraising and Drakes Bay Fundraising merged in the fall of 2013, bringing the longstanding professional acquaintances of their four principals – Tim Oleary, Carol Leister, Cindy Germain, and Christopher Dann – into a single company and combining the special resources and experiences of each to provide clients greater breadth and depth of service.

For more information about Next Generation Fundraising, click here.