October 8, 2012

Analytics and Research in Fundraising

Last time, I wrote about how research and analytics functions are viewed in other industries in order to gain some perspective on how the two disciplines fit into a fundraising shop.
In most institution's fundraising development programs there are two categories of activity and responsibilities, front-line fundraising and back-of-the-house operations. Front-line fundraising is pretty self explanatory; it is working with donors face-to-face on a day-to-day basis and is what our prospect and relationship managers do. Sometimes we refer to this work as acting as a liaison between philanthropic donors and an organization's mission. Back-of-the-house operations encompass a lot of activities from technology management, data maintenance, gift processing and…and…and…prospect research and analytics. This goes to show that before front-line fundraisers can talk to donors, or an annual giving director can send out their mailing, quite a bit of work needs to be done to understand an individual donor’s ability and propensity to give. This work is done by analysts and prospect researchers.  

The first step in any prospect development process is analytics. Analytics staff, using advanced data mining and modeling methodologies as well as wealth screenings conducted by outside vendors, identifies an organization’s best potential prospects. These prospects are then placed into refined pools and assigned to the limited number of managers that all institutions have. In addition to identifying potential prospects, analytics staff will also produce technical reports that help management to best understand the performance of the entire development program. These activities are programmatic and on-going. Identifying potential prospects and measuring performance never ends and is an important part of stewarding an ongoing concern like a university or medical center.

Prospect research provides the specific information that is required to best solicit and steward those prospects that are merely identified by analytics. This research uses multiple techniques – surveys distributed amongst constituents, peer screening collected by research staff, and discovery visits – to determine what it takes to turn a prospect into a donor. Unlike an on-going analytics program, these research activities are specific to each prospect at that point in time. Examples of specific prospect research deliverables include donor engagement reports, donor profiles, and targeted research for unique to individuals. Each of these deliverables are individual projects that once completed lead to better insight about already identified prospects. They answer the research question: “Is this identified prospect a potential donor? And if so, under what conditions and strategy.”  

So even though analytics is a relatively new function in fundraising development, it does not replace traditional prospect research. It enhances it, and provides accountability to the entire development program through measurement. Analytics is an aid, a technical tool that improves our philanthropic work by increasing return-on-investment and better targeting very large files of prospects.          


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