Demographic shifts: Is your data-mining approach as well?

Actuaries are some of the most successful analytics practitioners when it comes to predicting future events in very specific or individual ways, so this article describing the difficulties many actuaries are having given demographic shifts and the mercurial economic climate reminds me that my own analytics ideas, whether “standard” for all projects or custom tailored to a specific model, should be reviewed and where necessary revised.

Many models I have built have excluded age as a discreet or continuous independent over concerns regarding sensitivity to outliers (sometimes it is however include with grad decade as a proxy). This article presents some interesting information that while I already knew, had never considered in respect to my work: U.S. population is working longer, pushing retirement age higher and higher.

The implications I believe are both explicit and implicit. Directly, the trend towards working longer may necessitate a change in traditional assumptions of major gift work. Often there are general demographic “sweet spots” in age, relatively consistent from institution to institution. Certainly donors in their 70’s and 80’s have different giving behavior than those in their 30’s and 40’s. You may consider these “stages” in a donor’s life where they may have different attitudes towards making a major gift, or a planned gift, etc.

I have not observed a “rule of thumb” regarding major gifts and retirement age. Some individuals like to give while still working full time, others wait until retirement “settles in”, and some even use a major gift as a “kick off” to their transition from employment to retirement. American’s working longer on average impacts all three phenomenons.

Less directly, it may be important to consider the effect of older Americans working longer on younger generations of the American work force. Certainly with a glut of highly experienced employees choosing to remain past the average age for retirement, it may be suppressing the career growth opportunities of younger generations. The boomers will retire however, and this may also produce a vacuum effect of leadership and experience. Younger generations, who may have felt stalled by the logjam “at the top” may suddenly find themselves advancing at a rate greater than predecessors.

Maybe its time I reconsider how to use this most consistent and measureable longitudinal variables in my work.

Demographic Shifts Present Actuaries With Challenges And Opportunities
New Orleans, LA – Demographic changes are impacting the underwriting and pricing of many insurance products and the implications of these changes are creating new challenges and opportunities for property/casualty insurers, a panel of experts told attendees at the Casualty Actuarial Society’s 2009 Spring Meeting.

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How would you prefer to be sliced and diced?

Analytics has been pushed to the foreground of American minds by the 2008 election cycle. TV and news media provide seemingly endless hours of pundits and commentators discussing data and predictions. This analysis is based off of complex modeling as well as basic segmentation; political analytics brought us the terms "Soccer Moms" and "NASCAR dads" after all. While not the professional specialty area of most that read this blog, analytics is getting a lot of attention, and in many cases being applied in increasingly prominent ways.

I recently finished the book Microtrends by Political Analyst Svengali Mark Penn. The book offers a provocative analysis of “undiscovered,” yet potentially important populations in America, and promoted strategies on how to engage them and effect change. This idea of almost hyper segmentation has forced me to consider the ways in which I segment data and the resulting application.

I fundamentally believe that studying a heterogeneous group on a more micro level has great benefits, but I believe there can be costs as well. I hope others in our field give thoughtful consideration to the ways we “slice and dice” our data, as well as how “fine” we choose too cut.

You can segment individuals in a variety of ways, but many of these ways may not be useful for the questions you seek to answer. I may be identified as a “mid-twenties jazz music buff,” an “urban chess student and wine lover,” or as someone who “drives American” because I own a Pontiac. These are all accurate segments that connect me with others and offer some snapshots into my interests and purchasing preferences—but is it helpful to you? I feel there is a normal distribution related to the amount of segmentation conducted—a natural sweet spot, after which further division can create more problems than answers, or more incorrect conclusions than accurate ones.

Following the questions of “how do we cut” as well as “how deep” lies the next step: how should we use this information? Does segmentation serve as the sign post for a new fundraising strategy? Or does it simply signal more research? There are successful applications of both I believe, but it depends on the segmentation process and the questions you are trying to answer.

Read this article, consider analytic's emerging seat at the table in our world, and then ask yourself this question:

“How would I want to be identified (segmented) by organizations or causes I care about?”

What’s for Dinner? The pollsters want to know

If there’s butter and white wine in your refrigerator and Fig Newtons in the cookie jar, you’re likely to vote for Hillary Clinton. Prefer olive oil, Bear Naked granola and a latte to go? You probably like Barack Obama, too. And if you’re leaning toward John McCain, it’s all about kicking back with a bourbon and a stuffed crust pizza while you watch the Democrats fight it out next week in Pennsylvania.

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Web Analytics Primer from an "Evangelist"

This is a great new article by Avinash Kaushik, the “Analytics Evangelist” for Google. I have posted a few other articles that touch on the topic of web analytics because I consider this a relatively untapped, but potentially rich source of information.

This is a very good primer for web analytics. Kaushik describes basic concepts in how website usage, or “visit” data, has utility. These concepts are fundamental, but certainly are still the most widely used in website analytics.

The applications for analysis for the six basic measures mentioned:

■ Visits
■ Page views
■ Pages/visit
■ Bounce rate
■ Average time on site
■ % new visits

These are universal in creating core metrics for a website—you need to have some place to start to know where you are going.

Basic ideas off the top of my head for these simple applications include:
1) Basic web stats for an online donations page—what is the “close” rate of those who visit?
2) Tracking sourcing from online pages—what are the most effective and least effective “links” sending people to your online donations page?
3) Identifying other interest areas through usage stats—are there other surprising sources on your site that have generated strong interest? Special events, news, messages? Possible affinities or, at the very least, interests may lie undetected.

And this is just a start. Obviously, as you layer and link pages, data, etc., the specificity of the analysis can increase sharply. This is a basic start.

Try it out. Show a colleague—see if they are interested…

New to Web Analytics? Confused about Web Analytics? Think it is too hard? Scared of tools and consultants?

This post is for you, its goal: Web Analytics Demystified! Yeah!

Web Analytics is complex. That is what it is. Complex.

Get the nuance? Complex. Mysterious. Inviting. Come in. Sit down. See what’s there. No free rides. You’ll do your part, your efforts will have a rich payback.

Complex holds the promise that you’ll get it. Nay, you can get it. Come in, welcome.
Start with this post.

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Fundraising and Philanthropy: Yesterday, Today, and Tomorrow

Many of you may have seen this OnPhilanthropy article discussing the history and future of fundraising and philanthropy. As it points out, even though the dollars to nonprofits are increasing rapidly, competition for these dollars are also increasing. This will challenge us to grow our capacity for understanding our donors and relating to them more effectively.

The world of tomorrow will not only be one of increased public and political pressure for nonprofit accountability, but it will also see increasing reliance upon financial sustainability and impact measurement. Donors will move away from making "gifts," to creating philanthropic contracts in which the donor expectations are legally binding, often held in perpetuity by their recipient.

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Awarding Advancement Services

I think it is wonderful that Ithaca College recognized the contribution of an Advancement Services professional, Lori Watkins, to their campaign. Congratulations Lori!

Although the focus of this service is to highlight analytics, I am always pleased to see fundraising organizations reap the benefits of investment in infrastructure. Services, research, and operations are critical to fundraising success.

See the award posting

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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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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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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Reporting gifts in real time

The folks at the Wikimedia Foundation, which supports Wikipedia and the multi-lingual access to online information, have a great online-gift reporting tool. The Wikimedia Foundation C.O.R.E or Central Online Reporting Engine uses the blog-comment concept as a way to combine community-building, online giving, and gift acknowledgement into one process.

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America the Charitable

The CS Monitor revealed some interesting surprises about philanthropy in the USA. Among them is the economic impact. They write:

Charitable giving plays an even larger role in the economy than is suggested by some $260 billion in annual contributions. Each dollar of giving appears to create $19 of extra national income...

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Generational Giving Habits

Here is a new analysis of generational giving habits. Be sure to read the footnote to the article explaining the $6,000 average.

BOSTON, December 7, 2006 - Baby Boomers report that they will give more to charity in 2006 than in 2005, with average total donations of $6,000. This is the highest level among all generations surveyed and about 20 percent higher than the overall donor average of $5,000, according to a new nationwide survey by the Fidelity® Charitable Gift FundSM 1, which is one of the nation's largest public charities and has the largest donor-advised fund program in the United States.2

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Nonprofits Spend Billions to Reach Consumers

Tom Watson of onPhilanthropy discusses nonprofit marketing spending in a recent blog posting.

Never has the world of brands and consumer culture been more closely aligned with philanthropy - and the human desire to change the world for the better. World leaders, captains of industry, rock stars and mega-athletes. They're all embracing philanthropy in the new 21st century, bringing a "win now" mentality to the marketplace, and vowing to see to it that their dollars really do bring about change.

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Measuring Corporate Giving

How do we assess the impact of corporate giving? This article from onPhilanthropy discusses new metrics.

"As corporate giving matures within the broader field of corporate social responsibility, so too will the methods by which to measure it. Farron Levy writes that “the quest continues for that elegant, singular equation that measures CSR’s total return on investment.” As individuals and organizations continue to pursue that elusive goal, it is clear that the era of just giving for giving’s sake is over, and a new world of assessing the impact of corporate giving is upon us."

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Interview with Steve Cone

This MarketingProfs interview with Steve Cone has some great information on branding. Much of this applies well to direct marketing fundraising.

"how you use the Web depends a lot on the type of business you are in and who your audience is. As a general rule, the more affluent the target audience the more attention you should pay to how the Web should be integrated into your marketing campaign. And, for certain, your own Web site must be best in its class."

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