Post on 02-Dec-2014
description
Building Strategy Using Data-Derived Insights: Major Gifts
800.933.4446 | www.wealthengine.com | info@wealthengine.com
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Presented By
Sally BoucherDirector of Research, WealthEngine Institute
Sally Boucher, CFRE, is the Director of Research at WealthEngine with a 15-year background in higher education, the arts, and human services development. She has provided professional services to hundreds of non-profit organizations.
Sally is the primary author of the Growing Individual Gifts Workbook, the Best Practices for Prospect Research in Higher Education Fundraising Report, and a contributor to the Measuring Fundraising Return on Investment and the Impact of Prospect Research white paper. She regularly presents on analytics, return on investment, research and major giving.
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Building Strategy Using Data and Analytics
This presentation is based on information in WealthEngine Institute’s workbook, Growing Individual Gifts: An Analytic Approach to Data-Driven Success.
For more strategies on using data and analytics, join WealthEngine Institute.
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WealthEngine Helps Nonprofits Find the Right People for the Right Purpose
Fully integrated. Scalable. Best in class. Your results are ready.
Who are my best donors and prospects? Analytics allows you to draw conclusions and make informed decisions.
What can I learn about these people? In-depth, contextual information to better understand each of your prospects.
How can I find more prospects just like them? Leading tools to build your prospect pipeline and thoughtfully expand your reach.
What strategies should I use to reach them? Customized insight and advice to develop and execute your fundraising strategy with precision.
Use Analytics to Drive Strategy
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What is Analytics?
Analytics + Analysis = Data Driven Decision Making
AnalysisThe process of breaking a complex topic or substance into smaller parts to gain a better understanding of it.
AnalyticsThe process of developing optimal or realistic decision recommendations based on insights derived through analysis
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Data Leads to Actionable Insight
WisdomEvaluated understanding
KnowledgeApplication of data and information; answers "how” & “why” questions
InformationData that are processed to be useful; provides answers to "who", "what", "where", and "when" questions
DataSymbols
Wisdom
Knowledge
Information
Data
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All Strategy Derives from Organizational Objectives and Goals
Vision
Mission
Objectives
Goals
Strategies
Tactics
Increase capacity to transport excess food to those in need
Increase major gift revenue by 20%
A world without hunger
Feed the hungry
Invest in screening data
Use data to optimize portfolios and ask values
Answer
“Why?” Questions
Answer
“What?” Questions
Answer
“How?” Questions
Capacity and likelihood to give data identify the best major gift prospects…
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Use Data to Optimize Portfolios by Finding the Best Prospects
Based on Capacity and Likelihood to Give (or Affinity), an entire constituency can be segmented for application of distinct strategies:
For major gifts, constituents with high capacity and high affinity are shaded in green for immediate assignment and cultivationConstituents in shaded in blue are second tier prospects and should be engaged in high-touch cultivation at the annual giving level
Cap
acit
y
Likelihood to Give
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Use Data to Optimize Portfolios by Finding the Best Prospects
2 2 47
41 30 525
3,626 2,397 8,328
Cap
acit
y
Likelihood to Give
Based on Capacity and Likelihood to Give (or Affinity), an entire constituency can be segmented for application of distinct strategies:
For major gifts, constituents with high capacity and high affinity are shaded in green for immediate assignment and cultivationConstituents in shaded in blue are second tier prospects and should be engaged in high-touch cultivation at the annual giving level
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Data Appends (Wealth, Demographic and Lifestyle Attributes) Allow Evaluation of All Constituents
Affinity Score
Capacity RangeVery Low
LowModerat
eHigh
Very High
Total
$5M+ 1 3 2 6
$1M up to $5M 2 1 19 23 45
$500K up to $1M 7 11 50 39 107
$250K up to $500K 34 19 301 135 489
$100K up to $250K 139 60 905 358 1,462
$50K up to $100K 6 490 469 2,155 774 3,894
$25K up to $50K 186 795 1,037 1,288 761 4,067
$15K up to $25K 132 464 498 607 365 2,066
Up to $15K 127 278 67 216 146 834
Unrated 525 484 266 466 287 2,028
Total 976 2,693 2,429 6,010 2,890 14,998
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Affinity Score
Capacity RangeVery Low
LowModerat
eHigh
Very High
Total
$5M+ 1 3 2 6
$1M up to $5M 2 1 19 23 45
$500K up to $1M 7 11 50 39 107
$250K up to $500K 34 19 301 135 489
$100K up to $250K 139 60 905 358 1,462
$50K up to $100K 6 490 469 2,155 774 3,894
$25K up to $50K 186 795 1,037 1,288 761 4,067
$15K up to $25K 132 464 498 607 365 2,066
Up to $15K 127 278 67 216 146 834
Unrated 525 484 266 466 287 2,028
Total 976 2,693 2,429 6,010 2,890 14,998
Quickly Identify the Best Prospects for Major Gift Cultivation
28 shaded green have high capacity, high likelihood to give
3 2
23
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Affinity Score
Capacity RangeVery Low
LowModerat
eHigh
Very High
Total
$5M+ 1 3 2 6
$1M up to $5M 2 1 19 23 45
$500K up to $1M 7 11 50 39 107
$250K up to $500K 34 19 301 135 489
$100K up to $250K 139 60 905 358 1,462
$50K up to $100K 6 490 469 2,155 774 3,894
$25K up to $50K 186 795 1,037 1,288 761 4,067
$15K up to $25K 132 464 498 607 365 2,066
Up to $15K 127 278 67 216 146 834
Unrated 525 484 266 466 287 2,028
Total 976 2,693 2,429 6,010 2,890 14,998
Identify Second Tier Prospects for High-Touch Leadership Giving Program
19
50 39
301 135
544 shaded in blue are also good major gift candidates
Portfolios are often selected based on past giving history…
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Affinity Score
Capacity Range Very Low Low Moderate High Very High Total
$5M+ $7,983,010 $7,983,010
$1M up to $5M $10,481,10
5$10,481,10
5
$500K up to $1M $4,120,173 $4,120,173
$250K up to $500K $370,479 $341,000 $440,241 $6,786,036 $7,937,755
$100K up to $250K $601,489 $332,565 $1,545,482 $6,350,829 $8,830,365
$50K up tp $100K $196,430 $243,806 $712,639 $3,133,520 $4,286,395
$25K up to $50K $94,259 $289,513 $201,514 $583,946 $1,119,834 $2,289,066
$15K up to $25K $39,287 $24,468 $73,790 $134,884 $272,430
Up to $15K $40,226 $10,961 $36,692 $87,880
Unrated $27,383 $15,889 $11,409 $9,571 $64,252
Total $161,868$1,513,08
7$1,143,35
3$3,378,46
9$40,155,6
53$46,352,4
30
The Current Portfolios Under Management have a Total Value of $46MM
243 prospects are currently under management (assigned to a gift officer or volunteer)These were selected based on total givingValues in the cells are the sum of the capacity of each individual who falls within the range
$46,352,430
The total capacity of the prospects under management is the total number in the lower right-hand corner ($46MM)
Potential soars when portfolios are selected based on capacity and likelihood to give ratings…
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243 Optimal Prospects @$286MM(Selected Based on Capacity and Likelihood Ratings)
Affinity Score
Capacity Range Very Low Low Moderate High Very High Total
$5M+ 89,015,427 19,223,723 108,239,150
$1M up to $5M 35,938,650 48,700,146 84,638,796
$500K up to $1M 34,221,647 27,739,460 61,961,108
$250K up to $500K 30,862,459 30,862,459
$100K up to $250K
$50K up tp $100K
$25K up to $50K
$15K up to $25K
Up to $15K
Unrated
Total 159,175,725 126,525,788 285,701,513
Selecting the 243 optimal prospects yields $286MM under managementThis is 6 times the capacity under management
89,015,427 19,223,723 108,239,150
35,938,650 48,700,146 84,638,796
34,221,647 27,739,460 61,961,108
30,862,459 30,862,459
285,701,513
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Strategy Grows Out of Analysis
All else being equal, if 20 gifts close at 10% of capacity, this
change in portfolio value would result in an additional $2MM
($2,351,452 vs. $381,501)
To activate this potential, any high-likelihood, high-capacity
prospects not under management by an individual staff or
volunteer should be assigned
Currently assigned prospects with lower capacity/likelihood
scores should only be kept under management if they are close
to or in the solicitation phase
The second tier of prospects with high capacity and likelihood
scores should be “fast-tracked” in high-touch annual
giving/cultivation program
Ask amounts are often based on instinct, “gut” feelings, or the comfort level of the solicitor…
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Data including Capacity Estimates Allow Analysis of Major Gift Solicitations
Prospect Manager or Major Gift Officer
Average Capacity
of Prospects
Average Ask
Amount
% of Capacity
Asked
Average Gift
Amount
% of Ask Received
% of Capacity Received
Jocelyn $95,617 $24,286 25% $10,242 42% 11%
Sarah $167,708 $24,167 14% $16,667 69% 10%
Total $131,662 $24,226 18% $13,455 56% 10%
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This Organization Receives on Average Only 10% of Potential Gift Value
Prospect Manager
Average Capacity
of Prospects
Average Ask
Amount
% of Capacity
Asked
Average Gift
Amount
% of Ask Received
% of Capacity Received
Jocelyn $95,617 $24,286 25% $10,242 42% 11%
Sarah $167,708 $24,167 14% $16,667 69% 10%
Total $131,662 $24,226 18% $13,455 56% 10%
Analysis shows gifts received are valued at approximately 10% of capacity
11%
10%
10%
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Gift Officers May be Defaulting to the Minimum Major Gift Level
Prospect Manager
Average Capacity
of Prospects
Average Ask
Amount
% of Capacity
Asked
Average Gift
Amount
% of Ask Received
% of Capacity Received
Jocelyn $95,617 $24,286 25% $10,242 42% 11%
Sarah $167,708 $24,167 14% $16,667 69% 10%
Total $131,662 $24,226 18% $13,455 56% 10%
With a minimum major gift amount of $25K, it looks like prospect managers may be satisfied asking for gifts of $25K
$24,286
$24,167
$24,226
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With Gifts Closing at Just 56% of Asks, There May be Money Left on the Table
Prospect Manager
Average Capacity
of Prospects
Average Ask
Amount
% of Capacity
Asked
Average Gift
Amount
% of Ask Received
% of Capacity Received
Jocelyn $95,617 $24,286 25% $10,242 42% 11%
Sarah $167,708 $24,167 14% $16,667 69% 10%
Total $131,662 $24,226 18% $13,455 56% 10%
On average, they are receiving gifts of $10K-$15K
$10,242
$16,667
$13,455
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If 20 Gifts are Closed with Gifts Averaging 10% of Capacity, the Organization will Realize $263,324
Prospect Manager
Average Capacity
of Prospects
Average Ask
Amount
% of Capacity
Asked
Average Gift
Amount
% of Ask Received
% of Capacity Received
Jocelyn $95,617 $24,286 25% $10,242 42% 11%
Sarah $167,708 $24,167 14% $16,667 69% 10%
Total $131,662 $24,226 18% $13,455 56% 10%
$131,662 x 10% x 20
Gifts
$131,662 10%
$131,662 x 10% x 20 Gifts =
$263,324
If ask amounts are adjusted to reflect capacity on an individual basis, fundraising potential increases…
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Prospect Manager
Average Capacity
of Prospects
Average Ask
Amount
% of Capacity
Asked
Average Gift
Amount
% of Ask Received
% of Capacity Received
Jocelyn $95,617 $24,286 25% $10,242 42% 11%
Sarah $167,708 $41,927 25% $28,929 69% 17%
Total $131,662 $32,915 25% $19,585 59% 15%
Adjusting Average Ask Amount Up to 25% of Capacity on Average Leads to Higher Asks
Sarah’s asks are adjusted from 14% to 25% of capacity, resulting in an average ask of $41,927
$41,927 25%
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Prospect Manager
Average Capacity
of Prospects
Average Ask
Amount
% of Capacity
Asked
Average Gift
Amount
% of Ask Received
% of Capacity Received
Jocelyn $95,617 $24,286 25% $10,242 42% 11%
Sarah $167,708 $41,927 25% $28,929 69% 17%
Total $131,662 $32,915 25% $19,585 59% 15%
Higher Asks Lead to Higher Closed Gift Amounts
This leads to a 17% of capacity average gift for Sarah and 15% overall 15%
17%
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Prospect Manager
Average Capacity
of Prospects
Average Ask
Amount
% of Capacity
Asked
Average Gift
Amount
% of Ask Received
% of Capacity Received
Jocelyn $95,617 $24,286 25% $10,242 42% 11%
Sarah $167,708 $41,927 25% $28,929 69% 17%
Total $131,662 $32,915 25% $19,585 59% 15%
If 20 Gifts are Closed with Gifts Averaging 15% of Capacity, the Organization will Realize $394,986
15%$131,662
$131,662 x 15% x 20
Gifts $131,662 x 15% x 20 Gifts =
$394,986
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All else being held constant, If 20 gifts close at 15% of capacity
on average, this will result in $394,986 in revenue
This represents an additional $131,662 in revenue over prior
asks
Ask amounts do not need to be a set and static percentage of
capacity, but should be evaluated on an individual basis
Questions to ask include:– Are we one of this prospects top three priorities?
– Is this prospect enthusiastic about a particular project or program?
– Do we have a funding need that meshes with this prospect’s interests?
– What other current commitments do they have?
If gift officers default to a low ask amount, consider training to
boost confidence in the ratings and/or confidence in the process
Strategy Grows Out of Analysis
Organizations that invest in analytics and data develop strategies that realize untapped fundraising potential
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Key Takeaways from Today’s Presentation:
By analyzing file capacity and modeling likelihood to give, this
organization was able to increase capacity under management
and (without closing more gifts) increase potential funds
raised by $2MM
By analyzing ask amounts in relation to capacity, this
organization was able to identify a weakness in their major gift
program and by encouraging each gift officer to ask for a
minimum of 25% of capacity, increases fundraising potential
by $131,662
If this organization realizes even 10% of this potential $2.1MM
gain, they will have realized a Return on Investment (ROI)of
740% based on a $25,000 investment in data and analytics
More wealth and fundraising intelligence
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Knowledge Center & Thought Leadership
We support innovation and advancement in the field…
Growing Individual Gifts WorkbookTools you need to grow your fundraising results
ProspectResearchResources.comFree tools for every research request
WealthEngine InstituteFree education, knowledge sharing and networking
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Questions? Contact Us!
800.933.4446www.wealthengine.com
info@wealthengine.com
If you’d like to learn more about how you can implement data driven solutions in your nonprofit, contact us!
Read more about WealthEngine’s Analytics for Nonprofits here.