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
Return on Investment
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
Return on Investment
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 $0.11
Return on Investment 532% 562% 224% 435% 847%
Return on Investment
11
Agenda
Introduction
Prospect Research and the Impact on Fundraising
Prospect Research and Prospect Management Metrics Additional Measurements Case Studies
12
What is Prospect Research?
• Prospect Research helps to – Identify new prospects with wealth and inclination
to give– Segment and prioritize existing donors– Determine target ask amounts– Provide important background information to
development officers
13
The Value of Prospect Research
• “Investment” in Prospect Research
More Donors = Increase in RevenueLarger Gift Sizes = Increase in Revenue
• Justify Prospect Research with Measurement
14
Investing in Prospect Research
Organization Size HPOs Others % Difference
Large 4.40 1.55 184%
Medium 2.00 1.07 87%
Small 1.66 0.73 127%
Grand Total 2.51 1.12 124%
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• Average Number of Full-Time Researchers at HPOs: 2.51 (124% difference)
• Conclusion: High-Performing Organizations invest in Prospect Research Personnel
2009 Higher Education Report: Best Practices for Prospect Research in Higher Education Fundraising
Investing in Prospect Research
• Online Data Mining Tools– Databases and Aggregators – Value: Provides public record data on donors,
corporations, and foundations– Cost: Varies (can be expensive)
16
Investing in Prospect Research
• Peer Screening– Reviewing of prospect lists by individuals or groups– Value: Uncovers relationships, details, and wealth– Cost: No or Minimal Cost
17
Investing in Prospect Research
• Modeling and Analytics– In-House or Outsourced modeling and data
analytics– Value: Can answer specific questions– Cost: Varies (can be expensive)
18
Investing in Prospect Research
• Other Research Sources– Internet, Media and Data Sources– Value: Backbone of prospect research offices– Costs: Free or Subscription Cost (varies)
19
Investing in Prospect Research
# of Records Screened 12,000 36,000 165,000
Average Cost of Screening ($.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
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• 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
Prospect Research and the Impact on Fundraising
Prospect Research and Prospect Management Metrics Additional Measurements Case Studies
21
Metrics
Metrics Defined: “A business metric is any type of measurement used to gauge some quantifiable component of an organization’s performance”
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Good Metrics
RelevantMeasurable
Actionable
Prospect Research & Prospect Management Goals
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•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
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• 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
Prospect Identification Metrics
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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%
Prospect Identification Metrics
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
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•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
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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
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•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
Prospect Management Metrics
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Cultivation
Solicitation
Stewardship
330 250 210 170 60 40
Fundraising Pipeline Analysis
Prospect Management Metrics
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
Prospect Management Metrics
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
Prospect Management Metrics
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
Prospect Research and the Impact on Fundraising
Prospect Research and Prospect Management Metrics Additional Measurements Case Studies
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
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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
Prospect Research and the Impact on Fundraising
Prospect Research and Prospect Management Metrics Additional Measurements Case Studies
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
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Barnard College (ROI)
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
Barnard College (ROI)
• 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: $0)
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Christian Aid (CRD)
• £5 million goal for “In Their Lifetime” campaign started in 2008 – ~£4 million raised to date
• Goal: Establish The Ambassadors Programme– Mini Campaign aimed specifically at mid-level
donors within the overall campaign– £10,000-£50,000 over 3-5 years– 4 month work period
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Christian Aid (CRD)
• Process:– Wealth Screening– Determined UK donor “hot spots”– Additional prospect research and analysis
• Results:– 10 Strategic Events held in “hot spots”– Engaged 28 Ambassadors– Raised £675,000
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Christian Aid (CRD)
• The CRD of the Ambassadors Programme was £.08 (~$.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)
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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
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