When I started doing predictive modelling, I was keenly interested in picking the best and coolest predictor variables. As my understanding deepened, I turned my attention to how to define the dependent variable in order to really get at what I was trying to predict. More recently, however, I’ve been thinking about refining or limiting the population of constituents to be scored, and how that can help the model.
What difference does it make who gets a propensity score? Up until maybe a year ago, I wasn’t too concerned. Sure, probably no 22-year-old graduate had ever entered a planned giving agreement, but I didn’t see any harm in applying a score to all our alumni, even our youngest.
Lately, I’m not so sure. Using the example of a planned gift propensity model, the problem is this: Young alumni don’t just get a score; they also influence how the model is trained. If all your current expectancies were at least 50 before they decided to make a bequest, and half your alumni are under 30 years old, then one of the major distinctions your model will make is based on age. ANY alum over 50 is going to score well, regardless of whether he or she has any affinity to the institution, simply because 100% of your target is in that age group.
The model is doing the right thing by giving higher scores to older alumni. If ages in the sample range from 21 to 100+, then age as a variable will undoubtedly contribute to a large chunk of the model’s ability to “explain” the target. But this hardly tells us anything we didn’t already know. We KNOW that alumni don’t make bequest arrangements at age 22, so why include them in the model?
It’s not just the fact that their having a score is irrelevant. I’m concerned about allowing good predictor variables to interact with ‘Age’ in a way that compromises their effectiveness. Variables are being moderated by ‘Age’, without the benefit of improving the model in a way that we get what we want out of it.
Note that we don’t have to explicitly enter ‘Age’ as a variable in the model for young alumni to influence the outcome in undesirable ways. Here’s an example, using event attendance as a predictor:
Let’s say a lot of very young alumni and some very elderly constituents attend their class reunions. The older alumni who attend reunions are probably more likely than their non-attending classmates to enter into planned giving agreements — for my institution, that is definitely the case. On the other hand, the young alumni who attend reunions are probably no more or less likely than their non-attending peers to consider planned giving — no one that age is a serious prospect. What happens to ‘event attendance’ as a predictor in which the dependent variable is ‘Current planned giving expectancy’? … Because a lot of young alumni who are not members of the target variable attended events, the attribute of being an event attendee will be associated with NOT being a planned giving expectancy. Or at the very least, it will considerably dilute the positive association between predictor and target found among older alumni.
I confirmed this recently using some partly made-up data. The data file started out as real alumni data and included age, a flag for who is a current expectancy, and a flag for ‘event attendee’. I massaged it a bit by artificially bumping up the number of alumni under the age of 50 who were coded as having attended an event, to create a scenario in which an institution’s events are equally popular with young and old alike. In a simple regression model with the entire alumni file included in the sample, ‘event attendance’ was weakly associated with being a planned giving expectancy. When I limited the sample to alumni 50 years of age and older, however, the R squared statistic doubled. (That is, event attendance was about twice as effective at explaining the target.) Conversely, when I limited the sample to under-50s, R squared was nearly zero.
True, I had to tamper with the data in order to get this result. But even had I not, there would still have been many under-50 event attendees, and their presence in the file would still have reduced the observed correlation between event attendance and planned giving propensity, to no useful end.
You probably already know that it’s best not to lump deceased constituents in with living ones, or non-alumni along with alumni, or corporations and foundations along with persons. They are completely distinct entities. But depending on what you’re trying to predict, your population can fruitfully be split along other, more subtle distinctions. Here are a few:
- For donor acquisition models, in which the target value is “newly-acquired donor”, exclude all renewed donors. You strictly want to have only newly-acquired donors and never-donors in your model. Your good prospects for conversion are the never-donors who most resemble the newly-acquired donors. Renewed donors don’t serve any purpose in such a model and will muddy the waters considerably.
- Conversely, remove never-donors from models that predict major giving and leadership-level annual giving. Those higher-level donors tend not to emerge out of thin air: They have giving histories.
- Looking at ‘Age’ again … making distinctions based on age applies to major-gift propensity models just as it does to planned giving propensity: Very young people do not make large gifts. Look at your data to find out at what age donors were when they first gave $1,000, say. This will help inform what your cutoff should be.
- When building models specifically for Phonathon, whether donor-acquisition or contact likelihood, remove constituents who are coded Do Not Call or who do not have a valid phone number in the database, or who are unlikely to be called (international alumni, perhaps).
- Exclude international alumni from event attendance or volunteering likelihood models, if you never offer involvement opportunities outside your own country or continent.
Those are just examples. As for general principles, I think both of the following conditions must be met in order for you to gain from excluding a group of constituents from your model. By a “group” I mean any collection of individuals who share a certain trait. Choose to exclude IF:
- Nearly 100% of constituents with the trait fall outside the target behaviour (that is, the behaviour you are trying to predict); AND,
- Having a score for people with that trait is irrelevant (that is, their scores will not result in any action being taken with them, even if a score is very low or very high).
You would apply the “rules” like this … You’re building a model to predict who is most likely to answer the phone, for use by Phonathon, and you’re wondering what to do with a bunch of alumni who are coded Do Not Call. Well, it stands to reason that 1) people with this trait will have little or no phone contact history in the database (the target behaviour), and 2) people with this trait won’t be called, even if they have a very high contact-likelihood score. The verdict is “exclude.”
It’s not often you’ll hear me say that less (data) is more. Fewer cases in your data file will in fact tend to depress your model’s R squared. But your ultimate goal is not to maximize R squared — it’s to produce a model that does what you want. Fitting the data is a good thing, but only when you have the right data.