For the beginner - How to Raise Money for a Nonprofit

What intrigues me about this "fundraising 101" article is the section on target marketing. Certainly, understanding your target market should be a core principle of fundraising. And this article reflects basic ways of starting down this path. What continues to surprise me is how few established organizations can really describe their core audiences. Many of these organizations have sophisticated cultivation and solicitation methods, but their target marketing and research methods do not go far beyond this basic approach.

Part of your job as a fundraiser is to identify those persons and organizations likely to be interested in the programs and services that you offer. Asking people for a donation to a nonprofit that has no interest to them is folly. Targeting a small number of potential donors is an efficient way to focus your efforts.

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The Mind of Online Auction Bidders - Raising Money for Nonprofits

The new cMarket survey of over 1,000 online auction participants, shows online fundraising auctions are hotter than ever. The data reveals what participants are thinking, what motivates them, their characteristics, and what non-profit organizations can learn from it to increase their fundraising success in 2007. The survey also identifies patterns of the highly coveted “Big Spender,” and his parsimonious opposite.

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Process Analytics and ASU Advising

Many fundraising analytics professionals use modeling for prospect identification. However, a new opportunity is tuning business processes.

Arizona State University is building a program for managing the process of advising. A goal of advising is to help see the student to graduation. By tuning this path and providing simulation for changing paths, advising would offer better service to the students.

Moves management processes see prospects along various paths as well. By tuning these paths and providing simulations for altering areas of interest, capacity, and affinity levels, development would offer better service to the prospects.

Provost Betty Capaldi, the university’s top academic official, is building a computer system that will tell students what classes they need to graduate, when they need to take them and, if they want to change direction, how to switch their major.

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More Fundraising Database Breaches

It seems that Universities are increasing as targets for hackers. Most of the analytics professionals in fundraising run their data mining projects in flat file environments. These continuous warnings should remind us to be extra careful in how we handle and transmit the modeling data sets.

The University of Idaho in Moscow yesterday began sending letters to more than 331,000 people warning them about the potential compromise of their personal data following the theft of three desktop computers in November. Meanwhile, in a separate incident, officials at the University of Arizona in Tucson are investigating a computer break-in that disrupted several school services this week and continued to keep an online procurement system offline even today.

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Booster Ranking System

The University of South Carolina introduced a new ranking system for athletics donors. This ranking includes consecutive giving, giving levels, and designations. Individuals with higher scores have increased choices for tickets.

The point system will allow Gamecock Club officials to determine who gets parking passes and tickets to away football games and bowl games. The existing priority system, which ranks members within their particular giving level, will continue to be used for season-ticket assignments.

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Nonprofits need to convert episodic donors

DM News, a great resource for this field, published an article on shifting marketing strategy for nonprofits. It points out that new tools are changing how nonprofits approach their constituents. Carol Cassidy from the American Red Cross said, "From electronic screening to analytics to research, a variety of cost-effective services and products are available for all sizes of nonprofits to utilize."

Many organizations are taking advantage of new advancements in prospecting and marketing technology from vendors. However, many are also bringing these skills in-house. Certainly, it depends on the size and sophistication of your nonprofit--especially the often under-staffed development/advancement services area.

"It is no longer acceptable to treat all of your donors in the same manner, no matter the source of acquisition, A fully integrated approach is becoming an expectation of the donating public."

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5 Key Steps to Prospect Relationship Management

I've seen references to the 5 key steps to Prospect Relationship Management published by Canoe Money. These were written from a business perspective. In fundraising, Prospect Relationship Management is generally used synonymously with Moves Management or PM&T. This methodology is a better fit with what I would call "Suspect Relationship Management."

Although often overlooked, these first interactions with an organization can set the tone for the life of the relationship. I took the 5 steps from the article and commented on them from a fundraising analytics perspective.

1. Knowing
Use profiling technologies to analyze the predominant segments in your database. By knowing the various ways individuals become donors or are motivated to give, you will be better equipped for the entire relationship.

2. Follow Up
Be aware of all touch points your prospects have with your organizations. Are they coming to events, sports, fine arts, or lecture series? Have they participated in alumni activities or reunions? Are their children applicants for admissions? Have they been patients recently? All of these are opportunities for follow-up. And, they contribute to the movement through the pipeline.

3. Communication
The take-away for fundraising is to customize earlier in the process. Even when prospects are unknown to you (anonymous records in your database) can you be managing the relationship? With analytics, you can segment these populations to provide custom messaging and cultivation.

4. Tracking
As with all scorecarding and dashboard methodologies, determining metrics that matter happens over time. As you track different events, activities, and strategies, always measure against the impact on increased production. Tracking also enables stronger modeling for future segmentation and prioritization.

5. Refining
Be willing to change your benchmarks. Don't let the metrics exist for their own sake. The purpose is to increase gift production and manage infrastructure efficiency.

Managing that process is the art of Prospect Relationship Management ("PRM"), the lesser-known cousin of CRM and a critical contributor to the business development process. When executed effectively, prospect relationship management achieves two important goals. First, it shortens the selling cycle, creating a positive financial impact in the short term. Second, it lengthens the life of the customer for your business - and that creates a positive financial impact in the long term.

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Analytics vs. Screening

I am often asked to compare and contrast analytics and screening. Analytics generally refers to statistical data analysis tools such as data mining, segment profiling, modeling, etc. Screening generally refers to data purchasing to enhance a file with wealth or biographical data.

Screening and analytics answer different questions. If you were to ask, "who has the means to give a major gift?" you would need to acquire wealth data either through screening or prospect research. If you were to ask, "who is likely to give a major gift to us?" you would need to use analytics or surveys. However, surveys are limited by response rates.

Analytics may be used to determine which records to screen. Screening acquires external assets and biographical information to address the ability to give. However, not all asset data is public, only some records will receive ratings, and the data is often best used for major gift identification.

Analytics incorporates internal data and external data to address the likelihood of giving. It is a science of probability. All records receive a score, and all departments can benefit from analytics. Some of my clients had me build models predicting giving to specific colleges or units like the library or the law school. Organizations with in-house data mining/analytics programs frequently build models for specific constituency groups.

Screening:

• Pros: Actual wealth data, helps inform capacity to give, can bring efficiency to research
• Cons: Limited to information in public databases, not everyone gets rated, people can hide from these sources, cost of outsourcing

Analytics

• Pros: Every record can be scored, can bring efficiency to research, builds understanding of the database, effectively done in-house
• Cons: provides probability data rather than actual data, requires investment in skill development or should be outsourced, can be difficult to explain to non-technical staff

Colleges raising more, but from fewer alumni

Universities consistently report equal or higher levels of giving from non alumni at the major level. When this is discussed, the solution always jumps back to increasing focus on alumni participation. Of course, increasing this participation is a good thing.

What amazes me is the success in engaging non alumni at the major level when they are generally ignored in broad-based acquisition strategies. What are the opportunity risks of ignoring non alumni from the beginning? Perhaps, universities should consider "constituent participation rate" as a higher metric than "alumni participation rate."

The following article discusses this trend.

"All over the country, the percentage of alumni giving has dropped, and it's a concern among all institutions except maybe for the very elite," said Sheldon Caplis, vice president for institutional advancement at UMBC.

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