Calculating Your Online $$ Potential

July 30, 2009      Admin

Convio is brandishing a new "fundraising calculator" that claims to compute the future value of your integrated direct mail, telemarketing and online fundraising stream.

Says Jordan Viator of Convio: "The tool allows nonprofit organizations to estimate their online fundraising potential based on their actual number of donors, donations and online donor activity — giving them a realistic and personalized projection of how they can grow donations over the next three years … the tool can be a great resource to anyone looking for a realistic perspective on the difference online activity can make for their organization."

So, enter a handful of variables — including total twelve month giving, online giving, total donors, online only donors and a "maturity" factor — hit the calculate button, and presto … you get an estimate of your total and online revenue, plus total and online donors, three years out (and a customized report from Convio if you share your contact info).

What do you think of that? How accurate do you think a calculator like this might be?

I suppose one way to check this one would be to enter the pertinent data from three years ago, hit the button, and see how close the calculator comes to your actual figures. Or, if you already have a three-year projection, enter your current data and see how close the calculator comes to your projection.

If any Agitator reader tries this little "validation" experiment at home, I’d love to hear the results!

Personally, I’m skeptical. Unless there’s an amazing algorithm hidden under the hood of this calculator (Convio does have tons of client data to work with), it asks too few questions to do the job well. What it might do is calculate reasonably accurately what your existing file might be worth in three years, holding aside any brand new donors who might be added to the pot over three years … none of the requested data points get at that "external" growth factor.

However, while I’m not yet giddy over this calculator, I do hope it works, because I suspect there are many small and mid-sized nonprofits out there who don’t have the in-house expertise or can’t afford consultants to make dependable multi-year forecasts.

For example, I’d like to see a calculator that calculated lifetime value for a present donor or donor segment. Or one that would tell me how soon my house file will disappear if I do no replacement prospecting!

The Agitator is curious … Have you seen or used any "off the shelf" calculators to assist your fundraising planning?

Tom

 

4 responses to “Calculating Your Online $$ Potential”

  1. Carolyn Copp says:

    I’d like to also encourage some smart math whiz to come up with a life-time value calculator…if you run across one, do let us know.

  2. Sarah Anderson says:

    The calculator is some fine snake oil. Convio’s amazing algorithm simply multiplies the inputs by 6, 5, or 4 depending on your maturity level. This is a marketing and sales tool for them, but sadly not useful for realistic fundraising planning. My charity does not build budgets or projections off of four pieces of data. I doubt others do either.

  3. Heather C says:

    Sounds like a great way for Convio to collect more data for their own purposes.

  4. Rick Malchow says:

    Danger, danger, Will Robinson!
    Yes, this calculator is too simplistic. Oversimplifying this process gives people the false sense that projections like this are simple and can be based on broad industry variables. There are several key variable missing – Tom is correct in pointing out that no acquisition data is requested. Acquisition has an enormous impact on forecasting. Nor is there any input for retention and donor value. These variables vary greatly among organizations.
    In addition, I have looked at online activity from many organizations with mature online strategy. They all have different trends based on a variety of factors – percentage of donor email addresses immediately comes to mind.