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Presentation on theme: "Target Analytics 1 © 2014 Blackbaud PROSPECT RESEARCH: BUILDING A BRIDGE TO FUNDRAISING SUCCESS."— Presentation transcript:


2 Target Analytics 2 © 2014 Blackbaud PRESENTER: Founder of Blackbaud Analytics, which became Target Analytics 34 years as development officer and consultant Author and Frequent Presenter on Planned Giving, Major Gifts, Prospect Research and Industry Topics Law degree, University of Wisconsin-Madison Lives in Lafayette, California Lawrence Henze, J.D., Principal Consultant

3 Target Analytics 3 © 2014 Blackbaud AGENDA Prospect research philosophy Entire database Research Metrics Descriptive analytics Predictive analytics Individual research Worth knowing? Discoverable? Where is the information found? Putting it together – Cohesive Development Summary and Questions How much information do I need to know?

4 Target Analytics 4 © 2014 Blackbaud IDENTIFYING PROSPECTS: BEST PRACTICES Past Behavior Analytics and Predictive Modeling Wealth Screening Research Field Qualification

5 Target Analytics 5 © 2014 Blackbaud PROSPECT RESEARCH PHILOSOPHY

6 Target Analytics 6 © 2014 Blackbaud PROSPECT RESEARCH PHILOSOPHY

7 Target Analytics 7 © 2014 Blackbaud PROSPECT RESEARCH PHILOSOPHY

8 Target Analytics 8 © 2014 Blackbaud START WITH TRUE UNDERSTANDING OF YOUR FUNDRAISING ‘STATUS QUO’ Traditional Pyramid ‘unlikely’

9 Target Analytics 9 © 2014 Blackbaud A MORE LIKELY SCENARIO

10 Target Analytics 10 © 2014 Blackbaud PROSPECT IDENTIFICATION SUCCESS… Is most likely when: -You possess accurate information on and awareness of your current status -The process is fluid, ongoing, and not reactionary -The results are integrated into engagement, cultivation and solicitation strategies -Those strategies are supported by a relationship management system -You have a commitment to evaluate and monitor your progress, and revise strategies, programs to fit the data -There is accountability

11 Target Analytics 11 © 2014 Blackbaud WHAT ARE YOUR PROSPECT IDENTIFICATION NEEDS? ? ? ? ? ? ? ? ?



14 Target Analytics 14 © 2014 Blackbaud BOTTOM-UP OR TOP-DOWN? Principal Major Annual

15 Target Analytics 15 © 2014 Blackbaud PROSPECT IDENTIFICATION THROUGH ANALYTICS What analytics has taught us: -Analytics may validate tradition, and also… -Indicate change -Certain fundraising axioms are not supported by data -Predictive analytics more accurately identifies giving prospects at all levels -Planned giving: Loyalty and fiscal conservatism more important than age -Major giving: Most major giving prospects are discoverable through annual giving behavior

16 Target Analytics 16 © 2014 Blackbaud  Low likelihood scores and low target giving ranges  Minimize investment  Consider reduced resource application SEGMENTATION FOR ACTIONABLE RESULTS Combining Likelihood and Capacity  Highest scores and high assets  Further qualification and research  May need individual cultivation  Lower likelihood scores, but high target giving ranges and assets  Need to be sold on your mission  Longer term cultivation  High likelihood scores and low or mid-level target giving ranges  Targeted upgrade, mid-level gift strategies  Increase annual giving giving likelihood giving capacity Low Potential Long Term Prospects High Touch Upgrade or Acquire

17 Target Analytics 17 © 2014 Blackbaud Predictive modeling is far more effective at identifying major/principal donors Only 31% of the revenue came from new donors with publicly identifiable assets Only 13% of the revenue from the test group had publicly identifiable wealth. Modeling is very effective identifying mid-level and planned gift prospects Wealth data alone very ineffective at identifying annual and planned gift prospects LESSONS FROM 21 YEARS OF ANALYTICS

18 Target Analytics 18 © 2014 Blackbaud THE CHANGING LANDSCAPE OF PROSPECT RESEARCH More research professionals are comfortable or proficient in analytics -More emerging experts Demand for ongoing metrics and analytics is increasing Wealth is becoming harder to quantify, let alone obtain Growing interest in determining affinity, engagement, as more professionals accept the dominant role of affinity in the giving equation Better, more accurate behavioral, financial, and demographic data available for analytics Terms such as BI (business intelligence), BIG DATA, and analytics are found everywhere The question is: Are we doing the right analytics?

19 Target Analytics 19 © 2014 Blackbaud ANALYTICS/PROSPECT SCREENING Using data mining, predictive modeling, and wealth/hard asset appends to augment your knowledge of donors and prospects To provide a rating or ranking system that allows you to differentiate or segment your prospects -Increase effectiveness and efficiency A process that begs for an implementation plan A process that begs for implementation

20 Target Analytics 20 © 2014 Blackbaud WHAT DRIVES SCREENING PROJECTS? Identifying the Needs of the Organization Planning for the Research Develop Consensus and Commitment Application of the Results -Owning the Results -Distributing the Results -Initial Action Items -Relationship Management Evaluation


22 Target Analytics 22 © 2014 Blackbaud STANDARD DEVIATIONS AND OUTLIERS

23 Target Analytics 23 © 2014 Blackbaud IDENTIFYING THE SCREENING NEEDS OF YOUR ORGANIZATION - WARNINGS “There is great pleasure to be gained from useless knowledge” Bertrand Russell ( ) The screening info you need is the data you use…everything else is fluff…don’t buy fluff Prioritize the needs of your organization If you are screening with a vendor, make sure they care about and respond to your needs -Beware of packages -See ‘fluff’ above

24 Target Analytics 24 © 2014 Blackbaud SCREENING NEEDS - TIMING “Should we screen?” has been replaced by “When should we screen?” “When should we screen?” may be as painstakingly simple as “we will screen when we have the budget” Avoid budget limitations by undertaking internal data mining whenever possible -Simple strategies presented later in PowerPoint Increase the likelihood that you will have future budget funds by implementing your current (next) screening effort fully

25 Target Analytics 25 © 2014 Blackbaud IDENTIFYING THE NEED FOR SCREENING “Wisdom outweighs any wealth” Sophocles, (496 B.C. – 406 B.C.) Antigone Don’t be seduced by wealth data alone, even if your needs are primarily in major giving and principal giving Propensity combined with capacity provides the best comprehensive measure of a prospect -This has been tested and proven

26 Target Analytics 26 © 2014 Blackbaud IDENTIFYING THE NEED FOR SCREENING Annual fund screening – the best place to start? -Remember the pyramid and ultimate giving Annual fund questions? -Who makes annual gifts? Is a member? -What does a loyal donor look like? -Who can give more? -Who is unlikely to give again? -Which lapsed donors are likely to be recaptures -Who gives at the same time every year? -Who gives via direct mail? ? Telemarketing? Website? -Who is most likely to make an unrestricted gift? Restricted gift?

27 Target Analytics 27 © 2014 Blackbaud IDENTIFYING THE NEED FOR SCREENING Major giving or capital campaigns? -Identifying emerging major gift prospects -Pre-campaign screening -Mid-campaign screening -Post campaign screening Planned giving Wealth Identification Membership modeling/cluster analysis -Likelihood to be a member, renew, etc. -Membership groupings and characteristics Which other questions would you like answered?

28 Target Analytics 28 © 2014 Blackbaud INTERNAL DATA MINING – RFM ANALYSIS RFM Analysis -Recency (most recent gift this year, last year, or more distant) -Frequency (gave in each of the last three years, one of the last three years, none of the last three years) -Monetary value (largest gift in three years > $100, $50-100, < $50

29 Target Analytics 29 © 2014 Blackbaud PLANNING FOR THE RESEARCH “A goal without a plan is just a wish” Antoine de Saint-Exupery ( ) author The Little Prince Whether DIY or hired research, your goal should be to have the outline of a plan in place before receipt of the results. What are the key elements of the plan?

30 Target Analytics 30 © 2014 Blackbaud OBSTACLES TO PROSPECT DEVELOPMENT: THE SILO APPROACH Annual giving Donor relations CRM Shadow database Membership Special events Major giving Planned giving Prospect Research Prospects

31 Target Analytics 31 © 2014 Blackbaud KEY ELEMENTS OF THE PLAN Integration into your database/CRM software (priority) -Plan in advance to have technical resources scheduled for incorporation of results into database -Speak with vendor references to identify potential issues for software upload -Seek deadline from technical resource staff Utilization of delivered software -May be best place to house wealth data detail and conduct additional searches -If upload into CRM is delayed, this software becomes more critical

32 Target Analytics 32 © 2014 Blackbaud KEY ELEMENTS OF THE PLAN Creation of an implementation team -Include representative of each functional area to receive results or to be affected by implementation -Opportunity to eliminate silo barriers -Team should explore cross-functional implementation ideas -Team leader should be “owner” of the data with authority granted by advancement leadership. Use deadlines rather than meetings to move action items forward -For example, discussion items for meetings to be shared in advance along with specific implementation proposals

33 Target Analytics 33 © 2014 Blackbaud KEY ELEMENTS OF THE PLAN Creation of an implementation team -Include representative of each functional area to receive results or to be affected by implementation -Opportunity to eliminate silo barriers -Team should explore cross-functional implementation ideas -Team leader should be “owner” of the data with authority granted by advancement leadership. Use deadlines rather than meetings to move action items forward -For example, discussion items for meetings to be shared in advance along with specific implementation proposals

34 Target Analytics 34 © 2014 Blackbaud KEY ELEMENTS OF THE PLAN Distribution of the data to users -Research and development services staff probably best owners of the data -Create business rules for data use Access rules Update rules for wealth data Warning -Avoid data manipulation, replace with results implementation! -Vendor delivered tools can be very addictive -Data addicts often fail to implement

35 Target Analytics 35 © 2014 Blackbaud KEY ELEMENTS OF THE PLAN Implementing wealth results -Will wealth data supplement modeling scores or serve as a stand- alone rating system? -Will you share wealth results with development officers without verification? -How will you use this data to identify new prospects? -What criteria will be used to eliminate or remove prospects from existing portfolios? -How do you capture verification data from development officer call reports?

36 Target Analytics 36 © 2014 Blackbaud ANALYTICS ON YOUR OWN Simple age analysis by size or type of gift Gift size and frequency of solicitation Years of giving before first major gift Creating an engagement score -Quantity and quality of internal information

37 Target Analytics 37 © 2014 Blackbaud INTERNAL DATA MINING – RFM ANALYSIS RFM Analysis -Recency (most recent gift this year, last year, or more distant) -Frequency (gave in each of the last three years, one of the last three years, none of the last three years) -Monetary value (largest gift in three years > $100, $50-100, < $50

38 Target Analytics 38 © 2014 Blackbaud Grouping individuals of similar characteristics into respective categories Way of taking a lot of data and grouping people into subsets in a meaningful way Mosaic, PRIZM, PersonicX, Niches are all pre-made cluster data overlays you can purchase CLUSTER ANALYSIS

39 Target Analytics 39 © 2014 Blackbaud Mosaic Clusters - segmentation.html segmentation.html Example: CLUSTER ANALYSIS

40 Target Analytics 40 © 2014 Blackbaud CLUSTERS AND BEQUEST INTENTIONS Segment by known bequest intentions For example, 76% of bequest donors are described by 7 of the 26 clusters 24% of the non-bequest donors were also described by the same 7 clusters Concentrate on these prospects who are included in 1 of the 7 clusters for bequest cultivation and solicitation Applications of cluster data

41 Target Analytics 41 © 2014 Blackbaud MODELING 101: 3 STEPS What are you looking for?Common Denominators: The ModelScoring the Database Annual donors?

42 Target Analytics 42 © 2014 Blackbaud QUESTIONS MODELING MAY ADDRESS  Annual giving likelihood  Membership likelihood  Transitional giving likelihood  Major giving likelihood  Principal giving likelihood  Planned giving likelihood  Bequest likelihood  IRA contribution?  Target Gift Range  Cause/Mission/Fund  Restricted or Unrestricted giving  Event attendance to giving  Engagement modeling  CRT likelihood  Annuity likelihood  Gifts of real estate?

43 Target Analytics 43 © 2014 Blackbaud Giving History Biographical Information Relationship analysis ANALYTICS THROUGH MODELING Gift Level Segmentation Capacity and Wealth Inclination and Behavior Data Your Data Principal GivingMajor Giving Mid-Level Giving Annual Giving or Membership

44 Target Analytics 44 © 2014 Blackbaud SAMPLE SEGMENTATION

45 Target Analytics 45 © 2014 Blackbaud Annual Giving Mid-Level Giving Major Giving Principal Giving P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P P SAMPLE RESULTS – DATABASE SEGMENTATION DATABASE 10,000 RECORDS

46 Target Analytics 46 © 2014 Blackbaud ANNUAL FUND IMPLEMENTATION Upgrade potential Acquisition of new donors from current prospect pool Acquisition of new donors from new prospect pool Elimination of poor prospects from solicitation process -Saving solicitation money -Reallocating to more fruitful fundraising activities

47 Target Analytics 47 © 2014 Blackbaud MAJOR GIVING IMPLEMENTATION Proactive prospect identification Highlighting new prospects Eliminating comfort prospects Cleansing portfolios Placing emerging prospects into an upgraded annual fund solicitation

48 Target Analytics 48 © 2014 Blackbaud BequestAnnuityCRT Excellent Likelihood Very Good Likelihood 22841, Good Likelihood 3,4363, Planned Giving Segmentation

49 Target Analytics 49 © 2014 Blackbaud PLANNED GIVING IMPLEMENTATION Avoid concentration on older, wealthy individuals Integration of communication strategies with annual giving and donor relations Train major gift officers on the basics of planned giving -Create awareness of split gift opportunities Recognition of loyalty Put planned giving prospects into a relationship management system

50 Target Analytics 50 © 2014 Blackbaud RESEARCH IMPLEMENTATION PROACTIVE RESEARCH! Become the architect of a prospect identification strategy Expand the borders of prospect research Career success and personal rewards Think beyond traditional practices Think globally, include prospects of all types Have a plan for everyone -include those who will not be solicited -Use analytics to determine: Those who should be solicited Those who should be personally solicited Those who should be solicited less Those who should not be solicited at all

51 Target Analytics 51 © 2014 Blackbaud INDIVIDUAL RESEARCH FOR THE NON-RESEARCHER

52 Target Analytics 52 © 2014 Blackbaud WHAT DOES THE PROFESSIONAL RESEARCHER HAVE THAT YOU DON’T? Time Resources Training Experience

53 Target Analytics 53 © 2014 Blackbaud WHAT DO YOU HAVE? A need to know specific information about a prospect’s capacity Access to public information Personal knowledge of the prospect

54 Target Analytics 54 © 2014 Blackbaud WHAT DO YOU NEED TO KNOW? Where does your prospect live? Does she/he own property? Where does your prospect work? Does that employment contribute to gift capacity? Does the prospect give elsewhere? How much? Where is your prospect connected in the community?

55 Target Analytics 55 © 2014 Blackbaud THINGS YOU WILL NEVER BE ABLE TO FIND Your prospect’s net worth The size of his/her bank account Documentation of conspicuous consumption Most investments Inheritances or family money Almost anything the prospect wants to keep private

56 Target Analytics 56 © 2014 Blackbaud COUNT THE COST BEFORE YOU BEGIN Nothing worthwhile is free – even if you don’t pay money Sometimes it’s worth it to pay a little money if you can -Trade cash for convenience -Vendors improve access to public data Don’t get trapped in analysis paralysis Know that misinformation is mixed in with the information on many sources Give yourself a time limit -As you’re learning to use these resources, you might need more time -As you gain proficiency, you should shoot for about 1 hour per prospect

57 Target Analytics 57 © 2014 Blackbaud REAL ESTATE Assessment data is available on all US properties The kind of home a family owns usually reflects its economic status Primary source is the assessor for the county or township where the property is located Two values to look for -Assessed value -Market value Links to assessor’s websites: www.pulawski.net1234

58 Target Analytics 58 © 2014 Blackbaud REAL ESTATE If you don’t know the county for the property, look it up here: -Search for the address -USPS server returns the standard format and a link to “mailing industry information” for that property -Click on that link to get the county Get a rough idea of the market value at Willing to spend a little money? has indexed real estate information from most counties across the -Search many counties simultaneously -Retrieving a single real estate record costs about $7.

59 Target Analytics 59 © 2014 Blackbaud DONATIONS Political donations benefiting federal candidates are reported by the Federal Election Commission Gift sizes are limited, but can total $115,500 in a two year election cycle Not a charitable gift, but… Strong correlation between political giving and charitable giving FEC report may also show home address, employer and business title You’ll learn which way they lean politically

60 Target Analytics 60 © 2014 Blackbaud DONATIONS Go to -Enter the prospect’s nameprospect’s name -You may need to try nicknames to get more complete results (John Smith and Jack Smith) -Results screen shows all political donors by that namepolitical donors name -Narrow down the results by noting the donor’s city and state Willing to spend a little money? -No legal requirement for charitable donations to be reported has collected over 50 million donation records from annual -Can search by many different parameters including name and zip -Annual subscription costs $800

61 Target Analytics 61 © 2014 Blackbaud PUBLIC COMPANY INSIDERS Insiders must disclose stock holdings in companies with which they have one of these relationships -Director -Top officer -10% shareholder Most people who own stock are not insiders Insiders typically are 1% or less of a nonprofit constituency Go to 1 2www.j3sg.com12 -Quick Search -Insider Reports -Enter your prospect’s name and click Go

62 Target Analytics 62 © 2014 Blackbaud INCOME If your prospect is an insider, you’re in luck. Find insider top officer salaries here: For most prospects, you’ll need to depend on salary surveys to get a ballpark estimation

63 Target Analytics 63 © 2014 Blackbaud OTHER PROFESSIONALS Lawyers: Martindale-Hubbell ( Doctors: -AMA ( -AIM Docfinder ( ZoomInfo: General profiles on professionals automatically compiled from Internet sources ( LinkedIn: A social networking site for professionals ( Hoovers: A business directory searchable by executive name ( 1

64 Target Analytics 64 © 2014 Blackbaud SOCIAL MEDIA SEARCH – search Twitter on - search various social media on – search

65 Target Analytics 65 © 2014 Blackbaud WHY NOT START WITH GOOGLE? A large portion of the Internet is invisible to Google Google returns a lot of junk that must be filtered by hand Targeted research yields targeted results Use key words learned early in your research to improve your Google search as the final step

66 Target Analytics 66 © 2014 Blackbaud STREAMLINING YOUR PROSPECT RESEARCH Do you have more time or more money? If funds are available, vendors enable one stop shopping for prospect data from public sources Searches multiple public sources simultaneously Enter a name and address to gather information that could take you hours to collect manually

67 Target Analytics 67 © 2014 Blackbaud Philanthropic Interests Hard Asset Data Wealth Indicators The largest collection of public donations available with more than 90 Million philanthropic gift records; NOZA adds over a million donation records to its database each month An enormous database of corporate information: public and private company officers, private company ownership, officer bios, company descriptions and valuation Public stock holdings/transactions by corporate officers, directors, major shareholders; transaction histories, updated stock prices through BATS Exchange Primary and secondary holdings of real estate, estimated property values, including properties in trusts Detailed self-reported biographical information including education, interests, children, etc. Indicators of wealth, including presence of luxury items like planes, yachts, investments, income and net worth estimates Identifies officers of two kinds of nonprofits: public charities (grant seeking) and private foundations (grant making – includes family foundations) Market Guide from Reuters provides biographical and financial data on pubic company officers and directors In-depth information on more than 2 Million federal elections contributions including amount and recipient FEC WEALTHPOINT® DATA SOURCES

68 Target Analytics 68 © 2014 Blackbaud WEALTH IN CONTEXT Households with a net worth of $1.5M-$10M, 2004 IRS data, published in 2008 [2] Includes cash and cash management accounts. [3] Includes all government bonds, bonds issued by corporations and foreign governments, mortgages and notes, cash value life insurance, and diversified mutual funds. [4] Includes Individual Retirement Accounts, annuities, and self-employed or Keogh plans. [5] Includes non-corporate businesses, farms, and limited partnerships.

69 Target Analytics 69 © 2014 Blackbaud RESEARCH DONE, NOW WHAT? There is no magic formula that translates research data into the perfect ask amount Research is no substitute for good relationship building Goals of your research -Find evidence of philanthropy -Suggest a gift vehicle -Rank prospects based on evidence of capacity -Estimate gift capacity Some estimation methods -A prospect may give 5-10% of annual income -Total real estate x 4 x 5% (only when real estate value >= $500K) -Total stock holdings x 4 x 5% (only when stock value >= $100K) -5% of all known assets (only when assets ≈> $1 million)

70 Target Analytics 70 © 2014 Blackbaud PROSPECT IDENTIFICATION Your best prospects are already on your own database Corollary: Just because someone is wealthy doesn’t mean she’ll give anything to you

71 Target Analytics 71 © 2014 Blackbaud INTERNAL DATA MINING – PEER SCREENING Your board members and key volunteers are anxious to help you raise money A screener can review names in 30 minutes or so Questions -Do you know the prospect? -Estimated wealth and income -Rate sentiment toward the organization -Are you willing to make an introduction? Ideal conditions -Well connected screeners

72 Target Analytics 72 © 2014 Blackbaud CAN’T GET ENOUGH? has an annotated list of links useful for doing additional prospect research, including alternatives to the sites shown Your public library may have access to online and print resources that you would have to pay for Need to hire a freelancer? Go here for an incomplete list of reputable firms: OtherPages.htm#ResearchFirms

73 Target Analytics 73 © 2014 Blackbaud PUTTING IT ALL TOGETHER

74 Target Analytics 74 © 2014 Blackbaud PRINCIPLES OF RELATIONSHIP MANAGEMENT Moves management was implemented as a major giving tool -Personal relationships are the basis of successful major giving programs Need a more expansive view Integrate research, cultivation, solicitation and stewardship into a cyclical strategy Need a new name for the process -Relationship management -You can take steps to strengthen a relationship that would not be a ‘move’

75 Target Analytics 75 © 2014 Blackbaud RELATIONSHIP MANAGEMENT Definition: Strategically developed global and personalized activities designed to cultivate and strengthen relationships based on the belief that each prospect is unique Prospects emerge from different sources and paths Solicitation styles should reflect multiple paths

76 Target Analytics 76 © 2014 Blackbaud RELATIONSHIP MANAGEMENT What do you need for a successful relationship management process? -Commitment -Database management -Research -Outreach -Oversight

77 Target Analytics 77 © 2014 Blackbaud COMMITMENT Why do the research, if you are not going to implement the results? Is your organization ready to do things differently? Use the plan as a guide, but…for example -If the research results reveal great planned giving potential, but the plan ignores or downplays planned giving, you alter the plan -In other words, do what presidential candidates do in debates: pivot

78 Target Analytics 78 © 2014 Blackbaud DATABASE MANAGEMENT Commit to good database practices -Integrity -Updates -Appends/screening/analysis -Call reports -Tracking cultivation and solicitation progress

79 Target Analytics 79 © 2014 Blackbaud OUTREACH Cultivation and Solicitation -Development officers hired with specific contact goals -Professional training Include mentorship Enlist donors to help with training –Focus groups -Creating the right priorities for development officers Try to avoid job responsibilities that conflict with contact goals –Trust me, this is a HUGE issue

80 Target Analytics 80 © 2014 Blackbaud OVERSIGHT Management -Do not install a relationship management process if there will be no oversight or accountability (waste of time) -There MUST be observed movement (accountability) -Portfolios must be fluid Leadership -Successful development practices may be implemented from the bottom if -They are not practiced at the top

81 Target Analytics 81 © 2014 Blackbaud EVALUATION Easier to receive screening/analytical funds if successes are documented At specific intervals review the achieved/non-achieved goals -Don’t wait longer than six months for the first analysis -After that… Annual giving evaluations should be ongoing Prospect movement through relationship management system to be reviewed at least quarterly

82 Target Analytics 82 © 2014 Blackbaud SUMMARY AND QUESTIONS Contact: White Papers: My thanks to David Lamb, my long-term colleague and friend for his assistance in the preparation of this presentation:

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