25 June 2014
15 January 2013
A few years ago I met with an experienced Planned Giving professional who had done very well over the years without any help from predictive modeling, and was doing me the courtesy of hearing my ideas. I showed this person a series of charts. Each chart showed a variable and its association with the condition of being a current Planned Giving expectancy. The ultimate goal would have been to consolidate these predictors together as a score, in order to discover new expectancies in that school’s alumni database. The conventional factors of giving history and donor loyalty are important, I conceded, but other engagement-related factors are also very predictive: student activities, alumni involvement, number of degrees, event attendance, and so on.
This person listened politely and was genuinely interested. And then I went too far.
One of my charts showed that there was a strong association between being a Planned Giving expectancy and having a single initial in the First Name field. I noted that, for some unexplained reason, having a preference for a name like “S. John Doe” seemed to be associated with a higher propensity to make a bequest. I thought that was cool.
The response was a laugh. A good-natured laugh, but still — a laugh. “That sounds like astrology!”
I had mistaken polite interest for a slam-dunk, and in my enthusiasm went too far out on a limb. I may have inadvertently caused the minting of a new data-mining skeptic. (Eventually, the professional retired after completing a successful career in Planned Giving, and having managed to avoid hearing much more about predictive modeling.)
At the time, I had hastened to explain that what we were looking at were correlations — loose, non-causal relationships among various characteristics, some of them non-intuitive or, as in this case, seemingly nonsensical. I also explained that the linkage was probably due to other variables (age and sex being prime candidates). Just because it’s without explanation doesn’t mean it’s not useful. But I suppose the damage was done. You win some, you lose some.
Although some of the power (and fun) of predictive modeling rests on the sometimes non-intuitive and unexplained nature of predictor variables, I now think it’s best to frame any presentation to a general audience in terms of what they think of as “common sense”. Limiting, yes. But safer. Unless you think your listener is really picking up what you’re laying down, keep it simple, keep it intuitive, and keep it grounded.
So much for sell jobs. Let’s get back to the data … What ABOUT that “first-initial” variable? Does it really mean anything, or is it just noise? Is it astrology?
I’ve got this data set in front of me — all alumni with at least some giving in the past ten years. I see that 1.2% percent of all donors have a first initial at the front of their name. When I look at the subset of the records that are current Planned Giving expectancies, I see that 4.6% have a single-initial first name. In other words, Planned Giving expectancies are almost four times as likely as all other donors to have a name that starts with a single initial. The data file is fairly large — more than 17,000 records — and the difference is statistically significant.
What can explain this? When I think of a person whose first name is an initial and who tends to go by their middle name, the image that comes to mind is that of an elderly male with a higher than average income — like a retired judge, say. For each of the variables Age and Male, there is in fact a small positive association with having a one-character first name. Yet, when I account for both ‘Age’ and ‘Male’ in a regression analysis, the condition of having a leading initial is still significant and still has explanatory power for being a Planned Giving expectancy.
I can’t think of any other underlying reasons for the connection with Planned Giving. Even when I continue to add more and more independent variables to the regression, this strange predictor hangs in there, as sturdy as ever. So, it’s certainly interesting, and I usually at least look at it while building models.
On the other hand … perhaps there is some justification for the verdict of “astrology” (that is, “nonsense”). The data set I have here may be large, but the number of Planned Giving expectancies is less than 500 — and 4.6% of 500 is not very many records. Regardless of whether p ≤ 0.0001, it could still be just one of those things. I’ve also learned that complex models are not better than simple ones, particularly when trying to predict something hard like Planned Giving propensity. A quirky variable that suggests no potential causal pathway makes me wary of the possibility of overfitting the noise in my data and missing the signal.
Maybe it’s useful, maybe it’s not. Either way, whether I call it “cool” or not will depend on who I’m talking to.
13 November 2012
Guest post by Peter Wylie and John Sammis
(Click here to download post as a print-friendly PDF: Making a Case for Modeling – Wylie Sammis)
Before you wade too far into this piece, let’s be sure we’re talking to the right person. Here are some assumptions we’re making about you:
- You work in higher education advancement and are interested in analytics. However, you’re not a sophisticated stats person who throws around terms like regression and cluster analysis and neural networks.
- You’re convinced that your alumni database (we’ll leave “parents” and “friends” for a future paper) holds a great deal of information that can be used to pick out the best folks to appeal to — whether by mail, email, phone, or face-to-face visits.
- Your boss and your boss’s bosses are, at best, less convinced than you are about this notion. At worst, they have no real grasp of what analytics (data mining and predictive modeling) are. And they may seem particularly susceptible to sales pitches from vendors offering expensive products and services for using your data – products and services you feel might cause more problems than they will solve.
- You’d like to find a way to bring these “boss” folks around to your way of thinking, or at least move them in the “right” direction.
If we’ve made some accurate assumptions here, great. If we haven’t, we’d still like you to keep reading. But if you want to slip out the back of the seminar room, not to worry. We’ve done it ourselves more times than you can count.
Okay, here’s something you can try:
1. Divide the alums at your school into ten roughly equal size groups (deciles) by class year. Table 1 is an example from a medium sized four year college.
Table 1: Class Years and Counts for Ten Roughly Equal Size Groups (Deciles) of Alumni at School A
2. Create a very simple score:
EMAIL LISTED(1/0) + HOME PHONE LISTED(1/0)
This score can assume three values: “0, “1”, or “2.” A “0” means the alum has neither an email nor a home phone listed in the database. A “1” means the alum has either an email listed in the database or a home phone listed in the database, but not both. A “2” means the alum has both an email and a home phone listed in the database.
3. Create a table that contains the percentage of alums who have contributed at least $1,000 lifetime to your school for each score level for each class year decile. Table 1 is an example of such a table for School A.
Table 2: Percentage of Alumni at Each Simple Score Level at Each Class Year Decile Who Have Contributed at Least $1,000 Lifetime to School A
4. Create a three dimensional chart that conveys the same information contained in the table. Figure 1 is an example of such a chart for School A.
In the rest of this piece we’ll be showing tables and charts from seven other very diverse schools that look quite similar to the ones you’ve just seen. At the end, we’ll step back and talk about the importance of what emerges from these charts. We’ll also offer advice on how to explain your own tables and charts to colleagues and bosses.
If you think the above table and chart are clear, go ahead and start browsing through what we’ve laid out for the other seven schools. However, if you’re not completely sure you understand the table and the chart, see if the following hypothetical questions and answers help:
Question: “Okay, I’m looking at Table 2 where it shows 53% for alums in Decile 1 who have a score of 2. Could you just clarify what that means?”
Answer. “That means that 53% of the oldest alums at the school who have both a home phone and an email listed in the database have given at least $1,000 lifetime to the school.”
Question. “Then … that means if I look to the far left in that same row where it shows 29% … that means that 29% of the oldest alums at the school who have neither a home phone nor an email listed in the database have given at least $1,000 lifetime to the school?”
Question. “So those older alums who have a score of 2 are way better givers than those older alums who have a score of 0?”
Answer. “That’s how we see it.”
Question. “I notice that in the younger deciles, regardless of the score, there are a lot of 0 percentages or very low percentages. What’s going on there?”
Answer. “Two things. One, most younger alums don’t have the wherewithal to make big gifts. They need years, sometimes many years, to get their financial legs under them. The second thing? Over the last seven years or so, we’ve looked at the lifetime giving rates of hundreds and hundreds of four-year higher education institutions. The news is not good. In many of them, well over half of the solicitable alums have never given their alma maters a penny.”
Question. “So, maybe for my school, it might be good to lower that giving amount to something like ‘has given at least $500 lifetime’ rather than $1,000 lifetime?”
Answer. Absolutely. There’s nothing sacrosanct about the thousand dollar level that we chose for this piece. You can certainly lower the amount, but you can also raise the amount. In fact, if you told us you were going to try several different amounts, we’d say, “Fantastic!”
Okay, let’s go ahead and have you browse through the rest of the tables and charts for the seven schools we mentioned earlier. Then you can compare your thoughts on what you’ve seen with what we think is going on here.
(Note: After looking at a few of the tables and charts, you may find yourself saying, “Okay, guys. Think I got the idea here.” If so, go ahead and fast forward to our comments.)
Table 3: Percentage of Alumni at Each Simple Score Level at Each Class Year Decile Who Have Contributed at Least $1,000 Lifetime to School B
Table 4: Percentage of Alumni at Each Simple Score Level at Each Class Year Decile Who Have Contributed at Least $1,000 Lifetime to School C
Table 5: Percentage of Alumni at Each Simple Score Level at Each Class Year Decile Who Have Contributed at Least $1,000 Lifetime to School D
Table 6: Percentage of Alumni at Each Simple Score Level at Each Class Year Decile Who Have Contributed at Least $1,000 Lifetime to School E
Table 7: Percentage of Alumni at Each Simple Score Level at Each Class Year Decile Who Have Contributed at Least $1,000 Lifetime to School F
Table 8: Percentage of Alumni at Each Simple Score Level at Each Class Year Decile Who Have Contributed at Least $1,000 Lifetime to School G
Table 9: Percentage of Alumni at Each Simple Score Level at Each Class Year Decile Who Have Contributed at Least $1,000 Lifetime to School H
Definitely a lot of tables and charts. Here’s what we see in them:
- We’ve gone through the material you’ve just seen many times. Our eyes have always been drawn to the charts; we use the tables for back-up. Even though we’re data geeks, we almost always find charts more compelling than tables. That is most certainly the case here.
- We find the patterns in the charts across the seven schools remarkably similar. (We could have included examples from scores of other schools. The patterns would have looked the same.)
- The schools differ markedly in terms of giving levels. For example, the alums in School C are clearly quite generous in contrast to the alums in School F. (Compare Figure 3 with Figure 6.)
- We’ve never seen an exception to one of the obvious patterns we see in these data: The longer alums have been out of school, the more money they have given to their school.
- The “time out of school” pattern notwithstanding, we continue to be taken by the huge differences in giving levels (especially among older alums) across the levels of a very simple score. School G is a prime example. Look at Figure 7 and look at Table 8. Any way you look at these data, it’s obvious that alums who have even a score of “1” (either a home phone listed or an email listed, but not both) are far better givers than alums who have neither listed.
Now we’d like to deal with an often advanced argument against what you see here. It’s not at all uncommon for us to hear skeptics say: “Well, of course alumni on whom we have more personal information are going to be better givers. In fact we often get that information when they make a gift. You could even say that amount of giving and amount of personal information are pretty much the same thing.”
We disagree for at least two reasons:
Amount of personal information and giving in any alumni database are never the same thing. If you have doubts about our assertion, the best way to dispel those doubts is to look in your own alumni database. Create the same simple score we have for this piece. Then look at the percentage of alums for each of the three levels of the score. You will find plenty of alums who have a score of 0 who have given you something, and you will find plenty of alums with a score of 2 who have given you nothing at all.
We have yet to encounter a school where the IT folks can definitively say how an email address or a home phone number got into the database for every alum. Why is that the case? Because email addresses and home phone numbers find their way into alumni database in a variety of ways. Yes, sometimes they are provided by the alum when he or she makes a gift. But there are other ways. To name a few:
- Alums (givers or not) can provide that information when they respond to surveys or requests for information to update directories.
- There are forms that alums fill out when they attend a school sponsored event that ask for this kind of information.
- There are vendors who supply this kind of information.
Now here’s the kicker. Your reactions to everything you’ve seen in this piece are critical. If you’re going to go to a skeptical boss to try to make a case for scouring your alumni database for new candidates for major giving, we think you need to have several reactions to what we’ve laid out here:
1. “WOW!” Not, “Oh, that’s interesting.” It’s gotta be, “WOW!” Trust us on this one.
2. You have to be champing at the bit to create the same kinds of tables and charts that you’ve seen here for your own data.
3. You have to look at Table 2 (that we’ve recreated below) and imagine it represents your own data.
Table 2: Percentage of Alumni at Each Simple Score Level at Each Class Year Decile Who Have Contributed at Least $1,000 Lifetime to School A
Then you have to start saying things like:
“Okay, I’m looking at the third class year decile. These are alums who graduated between 1977 and 1983. Twenty-five percent of them with a score of 2 have given us at least $1,000 lifetime. But what about the 75% who haven’t yet reached that level? Aren’t they going to be much better bets for bigger giving than the 94% of those with a score of 0 who haven’t yet reached the $1,000 level?”
“A score that goes from 0 to 2? Really? What about a much more sophisticated score that’s based on lots more information than just email listed and home phone listed? Wouldn’t it make sense to build a score like that and look at the giving levels for that more sophisticated score across the class year deciles?”
If your reactions have been similar to the ones we’ve just presented, you’re probably getting very close to trying to making your case to the higher-ups. Of course, how you make that case will depend on who you’ll be talking to, who you are, and situational factors that you’re aware of and we’re not. But here are a few general suggestions:
Your first step should be making up the charts and figures for your own data. Maybe you have the skills to do this on your own. If not, find a technical person to do it for you. In addition to having the right skills, this person should think doing it would be cool and won’t take forever to finish it.
Choose the right person to show our stuff and your stuff to. More and more we’re hearing people in advancement say, “We just got a new VP who really believes in analytics. We think she may be really receptive to this kind of approach.” Obviously, that’s the kind of person you want to approach. If you have a stodgy boss in between you and that VP, find a way around your boss. There’s lots of ways to do that.
Do what mystery writers do; use the weapon of surprise. Whoever the boss you go to is, we’d recommend that you show them this piece first. After you know they’ve read it, ask them what they thought of it. If they say anything remotely similar to: “I wonder what our data looks like,” you say, “Funny you should ask.”
Whatever your reactions to this piece have been, we’d love to hear them.
10 October 2012
Guest post by John Sammis and Peter B. Wylie
Thanks to all of you who read and commented on our recent paper comparing logistic regression with multiple regression. We were not sure how popular this topic would be, but Kevin told us that interest was high, and there were a number of comments and questions. There were several general themes in the comments; Kevin has done an excellent job responding, but we thought we should throw in our two cents.
Why not just use logistic?
The point of our paper was not to suggest that logistic regression should not be used — our point was that multiple regression can achieve prediction results quite similar to logistic regression. Based on our experience working with and training fundraising professionals getting introduced to analytics, logistic regression can be intimidating. Our goal is always to get these folks to use analytics to help with their fundraising initiatives. We find many of them catch on with multiple regression, and much less so with logistic regression.
Predicted values vs. probabilities
We understand that the predicted values generated by multiple regression are different from the probabilities generated by logistic regression. Regardless of the statistic modeling technique we use, we always bin the raw prediction or probability values into equal-sized score levels. We have found that score level bins are easier to use than raw values. And using equal-sized score levels allows for easier evaluation of the scoring model.
“I cannot agree”
Some commenters, knowledgeable about statistics, said they would not use multiple regression when the inputs called for logistic. According to the rules, if the target variable is binary, then linear modelling doesn’t make sense — and the rules must be obeyed. In our view, this rigid approach to method selection is inappropriate for predictive modelling. The use of multiple linear regression in place of logistic regression may not always make theoretical sense, but predictive modellers are concerned with whether or not a model produces an output that is useful in practical terms. The worth of a model is testable against new, real-world data, therefore a model has only one criterion for determining “appropriate” use: Whether it really predicts what the modeler claims it will predict. The truth is revealed during evaluation.
A modest proposal
No one reading this should simply take our word that these two dissimilar methods yield similar results. Neither should anyone dismiss it out of hand without providing a critique based on real data. We would encourage anyone to try doing something on your own with data using both techniques and show us what you find. In particular, graduate students looking for a thesis or dissertation topic might consider producing something under this title: “Comparing Logistic Regression and Multiple Regression as Techniques for Predicting Major Giving.”
Heck! Peter says that if anyone were interested in doing a study like this for a thesis or dissertation, he would be willing to offer advice on how to:
- Do a thorough literature review
- Formulate specific research questions
- Come up with a study design
- Prepare a proposal that would satisfy a thesis or dissertation committee.
That’s quite an offer. How about it?
16 January 2012
Some of the best predictors in my models are related to the presence or absence of phone numbers and addresses. For example, the presence of a business phone is usually a highly significant predictor of giving. As well, a count of either phone or address updates present in the database is also highly correlated with giving.
Some people have difficulty accepting this as useful information. The most common objection I hear is that such updates can easily come from research and data appends, and are therefore not signals of affinity at all. And that would be true: Any data that exists solely because you bought it or looked it up doesn’t tell you how someone feels about your institution. (Aside from the fact that you had to go looking for them in the first place — which I’ve observed is negatively correlated with giving.)
Sometimes this objection comes from someone who is just learning data mining. Then I know I’m dealing with someone who’s perceptive. They obviously get it, to some degree — they understand there’s potentially a problem.
I’m less impressed when I hear it from knowledgeable people, who say they avoid contact information in their variable selection altogether. I think that’s a shame, and a signal that they aren’t willing to put in the work to a) understand the data they’re working with, or b) take steps to counteract the perceived taint in the data.
If you took the trouble to understand your data (and why wouldn’t you), you’d find out soon enough if the variables are useable:
- If the majority of phone numbers or business addresses or what-have-you are present in the database only because they came off donors’ cheques, then you’re right in not using it to predict giving. It’s not independent of giving and will harm your model. The telltale sign might be a correlation with the target variable that exceeds correlations for all your other variables.
- If the information could have come to you any number of ways (with gift transactions being only one of them), then use with caution. That is, be alert if the correlation looks too good to be true. This is the most likely scenario, which I will discuss in detail shortly.
- If the information could only have come from data appends or research, then you’ve got nothing much to worry about: The correlation with giving will be so weak that the variable probably won’t make it into your model at all. Or it may be a negative predictor, highlighting the people who allowed themselves to become lost in the first place. An exception to the “don’t worry” policy would be if research is conducted mainly to find past donors who have become lost — then there might be a strong correlation that will lead you astray.
An in-house predictive modeler will simply know what the case is, or will take the trouble to find out. A vendor hired to do the work may or may not bother — I don’t know. As far as my own models are concerned, I know that addresses and phone numbers come to us via a mix of voluntary and involuntary means: Via Phonathon, forms on the website, records research, and so on.
I’ve found that a simple count of all historical address updates for each alum is positively correlated with giving. But a line plot of the relationship between number of address updates and average lifetime giving suggests there’s more going on under the surface. Average lifetime giving goes up sharply for the first half-dozen or so updates, and then falls away just as sharply. This might indicate a couple of opposing forces: Alumni who keep us informed of their locations are more likely to be donors, but alumni who are perpetually lost and need to be found via research are less likely to be donors.
If you’re lucky, your database not only has a field in which to record the source of updates, but your records office is making good use of it. Our database happens to have almost 40 different codes for the source, applied to some 300,000 changes of address and/or phone number. Not surprisingly, some of these are not in regular use — some account for fewer than one-tenth of one percent of updates, and will have no significance in a model on their own.
For the most common source types, though, an analysis of their association with giving is very interesting. Some codes are positively correlated with giving, some negatively. In most cases, a variable is positive or negative depending on whether the update was triggered by the alum (positive), or by the institution (negative). On the other hand, address updates that come to us via Phonathon are negatively correlated with giving, possibly because by-mail donors tend not to need a phone call — if ‘giving’ were restricted to phone solicitation only, perhaps the association might flip toward the positive. Other variables that I thought should be positive were actually flat. But it’s all interesting stuff.
For every source code, a line plot of average LT giving and number of updates is useful, because the relationship is rarely linear. The relationship might be positive up to a point, then drop off sharply, or maybe the reverse will be true. Knowing this will suggest ways to re-express the variable. I’ve found that alumni who have a single update based on the National Change of Address database have given more than alumni who have no NCOA updates. However, average giving plummets for every additional NCOA update. If we have to keep going out there to find you, it probably means you don’t want to be found!
Classifying contact updates by source is more work, of course, and it won’t always pay off. But it’s worth exploring if your goal is to produce better, more accurate models.
6 October 2011
Effective fundraisers tell stories. When we communicate with prospective donors, we do well to evoke feelings and emotions, and go light on the facts. We may attempt to persuade with numbers and charts, but that will never work as well as one true and powerful story, conveyed in word and image.
But what about the stories we tell to ourselves? Humans need narratives to make sense of the world, but our inborn urge to order events as “this happened, then that happened” leads us into all kinds of unsupported or erroneous assumptions, often related to causation.
How many times have you heard assertions such as, “The way to reach young alumni donors is online, because that’s where they spend all their time”? Or, “We shouldn’t ask young alumni to give more than $20, because they have big student loans to pay.” Or, “There’ s no need to look beyond loyal donors to find the best prospects for Planned Giving.” Or, “We should stop calling people for donations, because focus groups say they don’t like to get those calls.”
Such mini-narratives are all around us and they beguile us into believing them. Who knows whether they’re true or not? They might make intuitive sense, or they’re told to us by people with experience. Experts tell us stories like this. National donor surveys and reports on philanthropic trends tell stories, too. And we act on them, not because we know they’re true, but because we believe them.
Strictly speaking, none of them can be “true” in the sense that they apply everywhere and at all times. Making assertions about causation in connection with complex human behaviours such as philanthropy is suspect right from the start. Even when there is some truth, whose truth is it? Trend-watchers and experts who know nothing about your donors are going to lead you astray with their suppositions.
I’m reminded of the scene in the movie Moneyball, now playing in theatres, in which one grizzled baseball scout says a certain player must lack confidence “because his girlfriend is ugly.” We can hope that most received wisdom about philanthropy is not as prodigiously stupid, but the logic should be familiar. Billy Beane, general manager of the Oakland A’s, needed a new way of doing things, and so do we.
The antidote to being led astray is learning what’s actually true about your own donors and your own constituency. It’s a new world, folks: We’ve got the tools and the smarts to put any assertion to the test, in the environment of our own data. The age of basing decisions on fact instead of supposition has arrived.
No doubt some feel threatened by that. I imagine a time when something like observation-driven, experimental medicine started to break on the scene. Doctors treating mental illness by knocking holes in peoples’ skulls to let out the bad spirits must have resisted the tide. The witch-doctors, and the baseball scouts obsessed with ugly girlfriends, may have had a lot of experience, but does anyone miss them?
The role of the analyst is not to shut down our natural, story-telling selves. No. The role of the analyst is to treat every story as a hypothesis. Not in order to explode it necessarily, but to inject validity, context, and relevance. The role of the analyst, in short, is to help us tell better and better stories.
This blog post is part of the Analytics Blogarama, in which bloggers writing on all aspects of the field offer their views on “The Emerging Role of the Analyst.” Follow the link (hosted by SmartData Collective) to read other viewpoints.