Guest post by Peter B. Wylie, with John Sammis
Not long ago, this question came up on the Prospect-DMM list, generating some discussion: How do you measure the rate of increasing giving for donors, i.e. their “velocity”? Can this be used to find significant donors who are poised to give more? This question got Peter Wylie thinking, and he came up with a simple way to calculate an index that is a variation on the concept of “recency” — like the ‘R’ in an RFM score, only much better.
This index should let you see that two donors whose lifetime giving is the same can differ markedly in terms of the recency of their giving. That will help you decide how to go after donors who are really on a roll.
You can download a printer-friendly PDF of Peter’s discussion paper here: An Index of Increasing Giving for Major Donors
Back in February and March, Kevin MacDonell published a couple of posts about RFM for this blog (Automate RFM scoring of your donors with this Python script and An all-SQL way to automate RFM scoring). If you’ve read these, you know Kevin was talking about a quick way to amass the data you need to compute measures of RECENCY, FREQUENCY, and MONETARY AMOUNT for a particular set of donors over the last five fiscal years.
But how useful, really, is RFM? This short paper highlights some key issues with RFM scoring, but ends on a positive note. Rather than chucking it out the window, we suggest a new twist that goes beyond RFM to something potentially much more useful.
Download the PDF here: Why We Are Not in Love With RFM
Thanks to data available via the 2010 US Census, for any educational institution that provides us zip codes for the alums in its advancement database, we can compute such things as the median income and the median house value of the zip code in which the alum lives.
Now, we tend to focus on internal data rather than external data. For a very long time the two of us have been harping on something that may be getting a bit tiresome: the overemphasis on finding outside wealth data in major giving, and the underemphasis on looking at internal data. Our problem has been that we’ve never had a solid way to systematically compare these two sources of data as they relate to the prediction of giving in higher education.
John Sammis has done a yeoman’s job of finding a very reasonably priced source for this Census data as well as building some add-ons to our statistical software package – add-ons that allow us to manipulate the data in interesting ways. All this has happened within the last six months or so, and I’ve been having a ball playing around with this data, getting John’s opinions on what I’ve done, and then playing with the data some more.
The data for this piece come from four private, small to medium sized higher education institutions in the eastern half of the United States. We’ll show you a smidgeon of some of the things we’ve uncovered. We hope you’ll find it interesting, and we hope you’ll decide to do some playing of your own.
Download the full, printer-friendly PDF of our study here (free, no registration required): Census ZIP data Wylie & Sammis.