January 29, 2013

Annual Giving Analytics (Part 1)

This is the first entry in a two-part series dedicated to Annual Giving analytics. These posts are derived from a webinar that was given by Bentz Whaley Flessner partner Joshua Birkholz and BWF’s Annual Giving expert Heather Greig. They are available to be viewed on the BWF youtube channel.

This post will explore the relationship that business and data analytics can have with Annual Giving operations and the next post will be more in-depth with regards to the techniques and methodologies that can be used.

Analytics generally fits into the business process of a philanthropic fundraising organization in the following sequence:

- Initial segmentation & prospecting if an organization's constituency. 
- Portfolio optimization for major gift solicitation and performance management of operations.  
- Advanced forecasting and simulations to better understand how much money can be raised.     

Most readers understand segmentation but there are many ways to segment an annual giving constituency, including:

1)      Philanthropic Interests
2)      Engagement and touch points: events attended, publications received, services provided, etc.
3)      Giving History such and length of giving relationship or amount given
4)      Channels by which gifts are made: mail, phone, or online.
  
Analytics generally supports prospect research by deriving a quantitative scoring methodology that measures how close or “warm” an individual is to the organization. Scores can then be used to prioritize which individuals should have a more complete dossier completed. 

Performance enhancement is the category of analytics usage that best describes its relationship with Annual Giving. Annual Giving is usually considered “low gifts at high volume” and the cost to raise each dollar is relatively high. But the true value of Annual Giving is not necessarily in how much money is raised at the lowest possible cost, but instead to cultivate a culture of philanthropy and engagement at an institution. All of these factors, maybe somewhat misaligned, make Annual Giving operations ripe for quantitative analytics. Our next post will explore specific techniques and methodologies for integrating analytics into the Annual Giving business process.     

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