Fundraising Intelligence: Measuring Fundraising Return on Investment and the Impact of Prospect...

Fundraising Intelligence: Measuring Return on Investment and

the Impact of Prospect Research

with Sally Boucher and Faön Mahunik

• CFRE fundraising professional• Background in Higher Ed, the

arts, and human services development

• Fundraising & nonprofit management consultant

• Primary author of Best Practices for Prospect Research in Higher Education Fundraising Report

• Regular speaker with AFP, CASE, APRA, AHP, VA Fundraising Institute and others

Sally Boucher

2

Faön Mahunik

• Director of Research Analytics at CCS

• Oversees firm’s internal data analysis & tailored constituent strategies

• Background in research and analytical experience in Higher Ed, development & fundraising

• Previous experience in private consulting firm3

Agenda

Introduction

Prospect Research and the Impact on Fundraising

Prospect Research and Prospect Management Metrics Additional Measurements Case Studies

4

The Non-profit Funding Model

$ for Mission

$ for Education and Promotion

Charitable Support

5

Non-Profit

Mission

PUBLIC = Funder + Beneficiary

Return on Investment

Return on Investment, or “ROI,” is a simple calculation:

Return on Investment (ROI) =

Net Revenue (Gross Revenue – Expense of Investment)

Expense of Investment

Cost to Raise a Dollar(CRD) =Expense of InvestmentNet Revenue

6


Annual Fund Mailing:Assumptions:1,500 pieces to loyal donorsCosts: Printing:$300

Mailing: $200Total Cost = $500Results: 20% response=300 giftsAverage gift size = $8.33Total Revenue = $2,500

ROI: $2500-$500 = 400%$500

CRD: $500 = $0.25$2500-$500

7

Major Gifts for year-long period:Assumptions:2 Full-time MGO’sSalaries average $90K/yearAll other expenses (travel, marketing, benefits, cultivation) = $100KTotal Expenses: 190KTotal Revenues: 30 gifts closed, average gift size $25K= $750K

ROI: $750,000-$190,000 = 295%$190,000

CRD: $190,000__ = $0.34$750,000-$190,000


8

9

Cost to Raise a Dollar

10

Cost to Raise a Dollar

Calculating Return on Investment for Fundraising Operations

Overall Major Gifts Annual FundCorp &

FoundationsPlanned Giving

Expenses

Subtotal Salary & Benefits $1,195,000 $575,000 $220,000 $187,500 $212,500

Subtotal Direct Expenses $219,200 $149,500 $23,500 $17,200 $29,000

TOTAL EXPENSES $2,609,200 $1,299,500 $463,500 $392,200 $454,000

TOTAL GIFT REVENUE $16,500,000 $8,600,000 $1,500,000 $2,100,000 $4,300,000

NET REVENUE (Total Gift Revenue-Total Expenses) $13,890,800 $7,300,500 $1,036,500 $1,707,800 $3,846,000

Cost per Dollar Raised $0.16 $0.15 $0.31 $0.19 $0.11

Return on Investment 532% 562% 224% 435% 847%


11

Agenda

Introduction



12

What is Prospect Research?

• Prospect Research helps to – Identify new prospects with wealth and inclination

to give– Segment and prioritize existing donors– Determine target ask amounts– Provide important background information to

development officers

13

The Value of Prospect Research

• “Investment” in Prospect Research

More Donors = Increase in RevenueLarger Gift Sizes = Increase in Revenue

• Justify Prospect Research with Measurement

14

Investing in Prospect Research

Organization Size HPOs Others % Difference

Large 4.40 1.55 184%

Medium 2.00 1.07 87%

Small 1.66 0.73 127%

Grand Total 2.51 1.12 124%

15

• Average Number of Full-Time Researchers at HPOs: 2.51 (124% difference)

• Conclusion: High-Performing Organizations invest in Prospect Research Personnel

2009 Higher Education Report: Best Practices for Prospect Research in Higher Education Fundraising


• Online Data Mining Tools– Databases and Aggregators – Value: Provides public record data on donors,

corporations, and foundations– Cost: Varies (can be expensive)

16


• Peer Screening– Reviewing of prospect lists by individuals or groups– Value: Uncovers relationships, details, and wealth– Cost: No or Minimal Cost

17


• Modeling and Analytics– In-House or Outsourced modeling and data

analytics– Value: Can answer specific questions– Cost: Varies (can be expensive)

18


• Other Research Sources– Internet, Media and Data Sources– Value: Backbone of prospect research offices– Costs: Free or Subscription Cost (varies)

19


# of Records Screened 12,000 36,000 165,000

Average Cost of Screening ($.20 per record)

$2,400 $7,200 $33,000

Average # of New Prospects Identified(17% of total)

2,040 6,120 28,050

Average # Visited by Personnel(19% identified)

388 1,163 5,330

# of Closed Gifts (10% of visited) 39 116 533

Average $ Raised $969,000 $2,907,000 $13,323,750

Average ROI $966,600 $2,899,800 $13,290,750

20

• Potential ROI realized over 1-2 years is great• Conclusion: ROI of Wealth Screening can be significant

2009 Higher Education Report: Best Practices for Prospect Research in Higher Education Fundraising

Agenda

Introduction



21

Metrics

Metrics Defined: “A business metric is any type of measurement used to gauge some quantifiable component of an organization’s performance”

22

Good Metrics

RelevantMeasurable

Actionable

Prospect Research & Prospect Management Goals

23

•Identify 200 new prospects for major gifts

Prospect Identification

•Qualify 70% of identified prospects•Qualify 30 prospects at $50K+ levels•Increase pool of rated prospects by 20%

Prospect Research

•Assign 90% of prospects qualified at $50K+•Move 50% of assigned prospects into cultivation

Prospect Management

24

• Identify 200 new prospects for major gifts Prospect

Identification

Prospect Identification Metrics

Possible Metrics:

• Number of Prospects Identified• Number of Prospects Identified by Source

• Time spent by source


25

Number of Prospects Identified in Period

Research SourceNumber of Prospects

Time Spent in Hours

Percent of Prospects ld’d

in Period

Percent of Time Spent in

PeriodPeer Referral 46 164 12% 26%

Push Technology 22 36 7% 6%Subscriptions 3 48 1% 8%Data Mining Score 39 72 13% 11%Wealth Screening 126 164 40% 26%Parent Screening 59 68 17% 11%Staff Referral 17 30 6% 5%$5K Gift Report 4 24 1% 4%$1K Gift Report 14 24 4% 4%Total for Period 330 630 100% 100%


26

2011 2010 2009 20080

50

100

150

200

250

300

350

Goal

Actual

Peer

Ref

erra

l

Push

Tec

hnol

ogy

Subs

crip

tions

Data

Minin

g Sc

ore

Wea

lth S

cree

ning

Pare

nt S

cree

ning

Staff

Ref

erra

l

$5K G

ift R

epor

t

$1K G

ift R

epor

t0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Number of Prospects

Time Invested

Prospect Research Metrics

27

•Qualify 70% of identified prospects•Qualify 30 prospects at $50K+ levels

Prospect Research

Possible Metrics:

• Number of Prospects Qualified• Number of Prospects Qualified by Source

• Number of Prospects Qualified by Capacity Level

• Time spent by source

Prospect Research MetricsNumber of Prospects Research Qualified in Period

Research Source Identified$1MM

+

$500K to

$1MM

$100K to

$500K

$50K to

$100K

$10K to

$50K

Total Qualified

$10K+Percent

Qualified

Time to

Qualify/Hours

Percent of Time Spent

Time per prospect

Peer Referral 46 0 2 2 14 20 38 83% 43 18% 1.13

Push Technology 22 1 1 0 7 11 20 91% 15 6% 0.75

Subscriptions 3 0 0 1 1 2 67% 4 2% 2.00

Data Mining Score 39 0 2 2 7 19 30 77% 45 18% 1.50

Wealth Screening 126 1 3 12 21 45 82 65% 65 27% 0.79

Parent Screening 59 1 0 3 17 29 50 85% 44 18% 0.88

Staff Referral 17 0 0 2 2 8 12 71% 8 3% 0.67

$5K Gift Report 4 0 1 0 0 2 3 75% 4 2% 1.33

$1K Gift Report 14 0 0 1 4 8 13 93% 16 7% 1.23

Total for Period 330 3 9 23 72 143 250 76% 244 100% 0.98

Prospect Research Metrics

29

Peer R

efer

ral

Push

Techn

ology

Subsc

riptio

ns

Data

Mini

ng S

core

Wea

lth S

cree

ning

Paren

t Scr

eenin

g

Staff

Refer

ral

$5K G

ift R

epor

t

$1K G

ift R

epor

t0

20

40

60

80

100

120

140

Non-Qualified Prospects

Qualified Prospects

39

23

72143

Number of Prospects Qualifiedby Capacity Level

$1MM+

$500K to $1MM

$100K to $500K

$50K to $100K

$10K to $50K

Prospect Management Metrics

30

•Assign 90% of prospects qualified at $50K+•Move 50% of assigned prospects into cultivation

Prospect Management

Possible Metrics:

• Number of Prospects Assigned• Number of Prospects Moved to Cultivation• Number of Prospects Moved to Solicitation• Number of Gifts Closed• Length of Time in Stages• Number of Contacts

Identification

Qualification

Assignment


31

Cultivation

Solicitation

Stewardship

330 250 210 170 60 40

Fundraising Pipeline Analysis


Research SourceIdentified

Research Qualified

Percent Converted

Assigned

Percent Converted

Cultivated

Percent Converted

Solicited

Percent Converted

Stewarded

Percent Converted

Conversion Identification to Stewardship

Peer Referral 46 38 83% 32 84% 26 81% 12 46% 8 67% 17%

Push Technology 22 20 91% 15 75% 11 73% 4 36% 2 50% 9%

Subscriptions 3 2 67% 1 50% 1 100% 0 0% 0 0%

Data Mining Score 39 30 77% 25 83% 20 80% 12 60% 9 75% 23%

Wealth Screening - 2008 126 82 65% 75 91% 64 85% 16 25% 11 69% 9%

Parent Screening- 2008 59 50 85% 40 80% 31 78% 7 23% 5 71% 8%

Staff Referral 17 12 71% 10 83% 8 80% 5 63% 3 60% 18%

$5K Gift Report 4 3 75% 3 100% 2 67% 1 50% 1 100% 25%

$1K Gift Report 14 13 93% 9 69% 7 78% 3 43% 1 33% 7%

Total for Period 330 250 76% 210 84% 170 81% 60 35% 40 67% 12%32


Pipeline Efficiency

Identified Qualified Assigned Cultivated Solicited Stewardship0

50

100

150

200

250

300

350

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

76%

84%81%

35%

67%

Percent Converted to Next Stage

Number of Prospects at Stage

33


Individual Major Gifts for

Q4 2009 Research SourceMajor Gift Assignment

Research Rating

(low end)Amount Received

Overage or (Underage) from Rating

Date Prospect Identified

Date Gift Received

Length of Cultivation (in months)

Number of

Contacts

Gift 1 Wealth Screening Jane Brown$1,000,00

0 1,000,000 $0 12/13/2007 12/5/2009 24 9

Gift 2 $1K Gift Report Jim Butler $100,000 50,000 -$50,000 6/25/2008 12/10/2009 18 5

Gift 3 Staff ReferralSarah Smith $50,000 25,000 -$25,000 8/19/2007 11/15/2009 27 8

Gift 4 Peer ReferralJennifer Dunn $500,000 1,500,000 $1,000,000 4/13/2008 12/1/2009 20 7

Gift 5 Parent ScreeningJennifer Dunn $250,000 85,000 -$165,000 1/10/2008 10/26/2009 22 8

Gift 6 Wealth Screening Jim Butler $25,000 35,000 $10,000 11/15/2007 10/16/2009 23 5

Gift 7 Parent Screening Jane Brown $50,000 25,000 -$25,000 4/7/2007 11/4/2009 31 12

Gift 8 Peer ReferralSarah Smith $100,000 50,000 -$50,000 3/28/2008 10/2/2009 18 4

Gift 9 Peer ReferralJames Guttierez $250,000 250,000 $0 6/30/2008 10/31/2009 16 7

Gift 10 Wealth ScreeningJames Guttierez

$5,000,000 1,500,000 -$3,500,000 8/12/2008 12/17/2009 16 10

Gift 11 $1K Gift Report Jane Brown $50,000 30,000 -$20,000 9/16/2007 12/30/2009 27 3

Summary $7,375,00

0 $4,550,000 -$2,825,000 22 mos average

7 average

Agenda

Introduction



35

Additional Measurements

• Are ROI and CRD the only measure of success?– Rate of return %

• # of Solicitations/# of Gifts Received– Average gift size– Average cost per gift

• Fundraising costs/# of gifts– Overall Cost %

• Fundraising costs/Total contributions

• Basic Benchmarking

36

Additional Measurements

• AFP’s 2010 Fundraising Effectiveness Survey Report

Gain/Loss Ratio = current year gains/losses prior year total results

– $ gained/lost from New Donors– $ gained/lost from Recaptured Donors– $ gained/lost from Upgraded Donors– $ from Donors who gave the same amount

37

Agenda

Introduction



38

Case Studies

39

Barnard College

Parents Fund Program

2010 ROI = 12,285%

Christian Aid

The Ambassadors Programme

CRD = £.08 (~$.13)

Barnard College (ROI)

• The Barnard Parents Fund– Launched in 2009 – Increased relationship between Research and

Parents Program Officer• Wealth Screenings since 2003 – implementation process

varied– Prospect Research and Event Specific Research

• Barnard Hosted Events• Parent Hosted Events

40


41

• Identified Top Level Prospect for Parent’s Fund Council – FY2010: 36 Parent/Families– FY2011: 39 Parent/Families

• Identified Top Level Prospects to serve as Event Hosts– 4 Events Hosted in FY2010– 6 Events Hosted/Planned in

FY2011


• The ROI of The Barnard Parent Fund was 12,285%

ROI = Net Revenue $589,724 Total Investment $4,800

– Wealth Screening 269 parents (~$300)– Barnard Hosted Events (Total Cost: $4,500) – Parent Hosted Events (Total Cost: $0)

42

Christian Aid (CRD)

• £5 million goal for “In Their Lifetime” campaign started in 2008 – ~£4 million raised to date

• Goal: Establish The Ambassadors Programme– Mini Campaign aimed specifically at mid-level

donors within the overall campaign– £10,000-£50,000 over 3-5 years– 4 month work period

43

Christian Aid (CRD)

• Process:– Wealth Screening– Determined UK donor “hot spots”– Additional prospect research and analysis

• Results:– 10 Strategic Events held in “hot spots”– Engaged 28 Ambassadors– Raised £675,000

44

Christian Aid (CRD)

• The CRD of the Ambassadors Programme was £.08 (~$.13)

CRD = Investment £5,620 Net Revenue £672,132

– Wealth Screening (Total Cost: ~£620, $1,000)– 10 Events (Total Cost: ~£1,000, $1,600)– Staff Travel (Total Cost: ~£2,000, $3,200)– 200 Brochure Mailings (Total Cost: ~£2,000, $3,200)

45

Questions?

Contact Us:[email protected]

Sally BoucherPlatinum Consultant, [email protected]

@WealthEngine www.facebook.com/pages/WealthEngine/60059589198

Faön MahunikDirector of Research Analytics, [email protected]

@CCSAnalyticswww.facebook.com/ccsfundraising

Contact Us

47

mailto:[email protected]

http://www.facebook.com/pages/WealthEngine/60059589198

mailto:[email protected]

http://www.facebook.com/ccsfundraising

Fundraising Intelligence: Measuring Fundraising Return on Investment and the Impact of Prospect...

Business

Transcript of Fundraising Intelligence: Measuring Fundraising Return on Investment and the Impact of Prospect...