CoolData blog

9 October 2015

Ready for a sobering look at your last five years of alumni giving?

Guest post by Peter B. Wylie and John Sammis

  

Download this discussion paper here: Sobering Look at last 5 fiscal years of alumni giving

 

My good friends Wylie and Sammis are at it again, digging into the data to ask some hard questions.

 

This time, their analysis shines a light on a concerning fact about higher education fundraising: A small group of donors from the past are responsible for the lion’s share of recent giving.

 

My first reaction on reading this paper was, well, that looks about right. A school’s best current donors have probably been donors for quite some time, and alumni participation is in decline all over North America. So?

 

The “so” is that we talk about new donor acquisition but are we really investing in it? Do we have any clue who’s going to replace those donors from the past and address the fact that our fundraising programs are leaky boats taking on water? Is there a future in focusing nearly exclusively on current loyal donors? (Answer: Sure, if loyal donors are immortal.)

 

A good start would be for you to get a handle on the situation at your institution by looking at your data as Wylie and Sammis have done for the schools in their discussion paper. Download it here: Sobering Look at last 5 fiscal years of alumni giving.

 

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25 August 2014

Your nonprofit’s real ice bucket challenge

It was only a matter of time. Over the weekend, a longtime friend dumped a bucket of ice water over his head and posted the video to Facebook. He challenged three friends — me included — to take the Ice Bucket Challenge in support of ALS research. I passed on the cold shower, but this morning I did make a gift to ALS Canada, a cause I wouldn’t have supported had it not been for my friend Paul and the brilliant campaign he participated in.*

Universities and other charities are, of course, watching closely and asking themselves how they can replicate this phenomenon. Fine … I am skeptical that central planning and a modest budget can give birth to such a massive juggernaut of socially-responsible contagion … but I wish them luck.

While we can admire our colleagues’ amazing work and good fortune, I am not sure we should envy them. In the coming year, ALS charities will be facing a huge donor-retention issue. Imagine gaining between 1.5 and 2 million new donors in the span of a few months. Now, I have no knowledge of what ALS fundraisers really intend to do with their hordes of newly-acquired donors. Maybe retention is not a goal. But it is a sure thing that the world will move on to some other craze. Retaining a tiny fraction of these donors could make the difference between the ice bucket challenge being just a one-time, non-repeatable anomaly and turning it into a foundation for long-term support that permanently changes the game for ALS research.

Perhaps the ice bucket challenge can be turned into an annual event that becomes as established as the walks, runs and other participatory events that other medical-research charities have. Who knows.

For certain is that the majority of new donors will not give again. Also for certain is that it would be irresponsibly wasteful for charities to spread their retention budget equally over all new donors.

Which brings me to predictive modeling. Some portion of new donors WILL give again. Maybe something about the challenge touched them more deeply than the temporary fun of the ice bucket dare. Maybe they learned something about the disease. Maybe they know someone affected by ALS. There is no direct way to know. But I would be willing to bet that higher levels of engagement can be found in patterns in the data.

What factors might be predictors of longer-term engagement? It is not possible to say without some analysis, but sources of information might include:

  • How the donor arrived at the site prior to making a gift (following a link from another website, following a link via a social media platform, using a search engine).
  • How the donor became aware of the challenge (this is a question on some giving pages).
  • Whether they consented to future communications: Mail, email, or both.
  • Whether the donor continued on to a page on the website beyond the thank you page. (Did they start watching an ALS-related video and if so, how much of it did they watch?)
  • Whether the donor clicked on social media button to share the news of their gift, and where they shared it.

Shreds of ambiguous clues scattered here and there, admittedly, but that is what a good predictive model detects and amplifies. If it were up to me, I would also have asked on the giving page whether the donor had done the ice bucket thing. A year from now, my friend Paul is going to clearly remember the shock of pouring ice water over his head, plus the positive response he got on Facebook, and this will bring to mind his gift and the need to give again. My choosing not to do so might be associated with a lower level of commitment, and thus a lower likelihood of renewing. Just a theory.**

Data-informed segmentation aimed at getting a second gift from newly-acquired donors is not quite as sexy as being an internet meme. However, unlike riding the uncontrollable wave of a social media sensation, retention is something that charities might actually be able to plan for.

* I would like to see this phenomenon raise all boats for medical charities, therefore I also gave to Doctors Without Borders Canada and the Molly Appeal for Medical Research. Check them out.

** Update: I am told that actually, this question IS asked. I didn’t see it on the Canadian site, but maybe I just missed it. Great!

POSTSCRIPT

I was quoted on this topic in a story in the September 4th online edition of the Chronicle of Philanthropy. Link (subscribers only): After Windfall, ALS Group Grapples With 2.4-Million Donor Dilemma

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