Modeling Yields Better Returns
Here’s an article from Fundraising Success that I set aside awhile back to reflect upon.
I’m glad I did. Written by fundraising consultants Tiffany Neill and Lynn Mehaffy, it’s a useful little gem … kind of a "nuts & bolts" Modeling 101 for fundraisers.
I’m especially intrigued by their discussion of milking more insight from merge-purges. They suggest assessing the results of merge-purges of house files with outside lists when assembling lists for prospecting, not just using the process to suppress names. Fundraisers can use this as a way of estimating what share of wallet their organization might be getting from their current individual donors, many (if not most) of whom are giving to mutiple organizations working in the same space.
By looking at merge results, you can calculate what percentages of your donor base are giving to only your organization, versus those giving to various numbers of groups in your outside list population (i.e., your competitive set) … and segment and score donors accordingly. You can then evaluate responsiveness to renewals and house appeals by these "share of wallet" segments, and use those findings to test differing levels of investment for different segments.
One of a number of interesting ideas n this piece.
Tiffany and Lynn, you deserve a raise!
Tom
One response to “Modeling Yields Better Returns”
Behavioral Science Q & A
Integrating an individual giving appeal with other communications from a charity can have both positive and negative effects, and the outcome largely depends on how it’s executed. Advantages of Integration Brand Consistency: Maintaining a consistent appearance and messaging across all communications can reinforce the org’s brand identity and strengthen brand recognition and trust among your […]
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I’m not aware of any in-market tests specifically comparing recurring vs. gift frequency language. I suspect the answer might not be the same with all gift frequencies, nor with all people. It sounds like a great opportunity for you to test and find out what works for your audience. Based on the literature, here’s a couple […]
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Based on what we know from existing data, those renewal notices can actually be pretty effective in getting people to donate. They tap into our psychology – creating a sense of urgency, reminding us of past support, and using personalization to make the message hit home. They’re playing on our natural tendencies to feel obligated […]
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Interesting question. I had a quick look at the testing done on this topic. On the positive side, in all cases, over half of donors decide to cover the fee. In some cases, it goes as high as 65%. Not a negligible percentage at all. Here’s another test from iRaiser showing consistent results (see point […]
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There’s just one thing to consider when designing a supporter journey: the supporter. More specifically, you need to take into account: Who the supporter is i.e. their identity, which is the reason they support this cause, and their personality, which describes the way they “see” and process the world. These will determine the kind of […]
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I’m not an expert in this but a quick search surfaced this article on the effect of tax reforms on 2019’s charitable giving. The researchers didn’t find a reduction. Actually, they observed an “increase in charitable contributions in 2019, even with the lower tax rates and the dramatically smaller number of taxpayers who itemize their […]
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This is a terrific piece from Tiffany Neill and Lynn Mehaffy! It covers an aspect of direct-response (or, direct-mail) fundraising practice and management that one does not always see discussed very often … but should be!
I can personally vouch for the effectiveness and benefits of this kind of multilevel data mining in one’s donor file or “house file” in advance of any appeal. It certainly involves more work — sometimes a lot more work. But, the added labor is always worth the time and energy involved when you consider the ROI in terms of response, income and critical information obtained.
About 30 years ago, I had the pleasure of working closely with Alan Sack, then the senior VP of Hub Mail in Boston. The firm served as direct-mail/direct-response vendor to the Massachusetts Easter Seal Society where I had the job of development/PR director — a one-man shop! We had a donor file made up of more than 200,000 records, just about all of them from direct-mail solicitation, and few of them ever approached for personal giving on any regular basis.
Alan Sack was an early and well-known proponent of vigorous and aggressive list management using techniques that few attempted with nonprofit donor files in those days. He convinced us and a number of other Easter Seal chapters to begin list manipulation and data mining in some new ways, and creative merge/purge and the type of “modeling” that Tiffany and Lynn describe were among Sack’s methods. He also designed and developed some of the most creative and exciting mail packages one typically found in those days.
All of this said, the most important result of these initiatives those many years ago, and the testimonial to what Tiffany and Lynn have suggested today, is that this kind of list management can lead to greatly increased contributed income from direct-response appeals and open the doors to new relationships and opportunities with an organization’s donors.
Our efforts in this regard with the Massachusetts Easter Seal Society’s donor file 30 years ago greatly improved the organization’s direct-mail fundraising returns. It also enabled the organization to develop, for the very first time, a donor file subgroup of individuals who could be approached for face-to-face, highly personalized solicitation of major gifts on an annual basis. Suddenly, the development program had a whole new dimension beyond direct-mail!
Thanks, Alan! You were a genius!