Tax Reform 2018: All Eyes on Mids

Tax Reform 2018: All Eyes on Mids

Several groups have done research to address the question of how changes in the tax code for 2018 might impact charitable giving. Much of this research has focused on the fact that only 30% of Americans itemize their deductions. Some have gone further to include demographic splits by wealth or region. At Analytical Ones, we believe the most predictive measure of future donor behavior is how they have given in the past. This perspective informs all our statistical models, analytics reporting, and strategy recommendations. A national survey co-sponsored by  Donlon Agency and Analytical Ones found that in the case of 2018 tax reform, segmenting donors  by their past giving levels reveals an important piece of the story. While less than a third of Americans itemize their deductions, our most valuable charitable donors itemize at a much higher rate. As many as 75% of donors who give $1,000 or more to charity each year itemize their charitable deductions. General donors (Under $1k annual) and Major donors ($10k+) are mostly immune to the changes to the tax code for 2018.  However, nine percent of Mid-level donors ($1,000 to $9,999 annual) report that they will have a significant decrease in giving next year in response to the change. Because this group typically makes up a large portion of revenue for non-profits, it is more important than ever to have a specific strategy to cultivate and upgrade mid-level donors. See the infographic below for more...
Granny’s $5 birthday surprise won’t cut it any longer.

Granny’s $5 birthday surprise won’t cut it any longer.

I’m on the 3rd floor of a Michigan Avenue focus group facility with a group of healthcare donors. I’ve just finished describing the directions of one my go-to exercises. They’re being asked to allocate $100 how they please across the organization. A male baby-boomer, on the younger side of the boom, says something unexpected: “I can’t allocate $100… because I would be embarrassed to give this organization just $100.” What just happened? $100 is a decent gift for a direct mail donor right? $100 used to really mean something in this business! Not anymore. Not like it used to anyway. This particular focus group was 3 years ago. I’ve been following this trend through my other research since. In many settings we’ve validated that younger donors have higher first gift amounts in acquisition. But why? It’s the same reason granny sends $5 bills in birthday cards. Our perception of the value of a dollar is very different by generation. At least, that was my hypothesis. So, I tested this assumption on a survey of 300 donors. I asked, “What is the minimum gift you could make to an organization and actually make a difference?” This is an adaptation of the Van Westendorp’s Price Sensitivity Meter question: “At what price would you consider the product to be priced so low that you would feel the quality couldn’t be very good?” The results supported my hypothesis in a way a researchers only dreams about: Mean Response: Donors under 55: $171 Donors 55-70: $68 Donors 70+ $35 What does this mean? Well, in today’s world it means your low ask-strings in direct...
Should you conduct your own survey? If you have to ask, then no.

Should you conduct your own survey? If you have to ask, then no.

Online software such as Survey Monkey and Google Forms have made the power of survey research available to anyone with an internet connection rendering us a society of survey experts. And WebMD has made us all doctors… And Pinterest has made us all pastry chefs… Do you see my point already? Bill Jacobs and I share an alma mater in Northern Arizona University where we both managed survey projects for the Social Research Laboratory while obtaining our graduate degrees in Sociology. Although our time at NAU was over a decade apart, we were first connected to each other by a mutual mentor from the lab. Since then, we have shared in conducting hundreds of surveys for non-profit, as well as commercial, governmental and private clients. From time to time we get to witness the horror of the “in-house” survey. It sort of reminds me of the local news every Fourth of July when you hear about all the amateur fireworks accidents. The perceived simplicity and relative user-friendliness of the survey tools mentioned above have resulted too many times in false confidence and ‘shoot from the hip’ research. Sometimes we’ll be called in to make sense of a bad survey, but the problem is that once the data collection is done, it’s too late. At best you have useless data. At worst, you’ve been making bad decisions off of bad insights. So, how do you know if you should conduct your own survey? I’ve put together a list of top-line questions about the process. If you feel comfortable about your answers below, survey away! Sampling: • How do I create a...
What would you do about next year’s results if you had them today?

What would you do about next year’s results if you had them today?

“His name is Gary Hobson. He gets tomorrow’s newspaper today. He doesn’t know how. He doesn’t know why. All he knows is when the early edition hits his doorstep, he has twenty-four hours to set things right.” -Synopsis of “Early Edition” American TV Show (1996-2000) Remember this show? What if you could be the Gary Hobson of fundraising? What if you knew your new acquisition offer was going to bomb? Or, what if you had confidence that your bold new direction was going to pay off? You would almost certainly make different decisions. What if I told you that this power was real and that you can use it now? It isn’t magic. It’s market research. “Offer Forecasting” is a survey analysis Analytical Ones has developed to test new offers on your donors before you invest the time, money and opportunity costs into full execution. Political consultants and pollsters use a similar process of “message testing” to determine what language will win campaigns. We test new content (image, copy, etc.) on a statistically representative sample of your acquisition market, or current donors, to determine their propensity to support an array of fundraising offers. We test against a control offer for baseline results. Our methodology has been proven valid by back-testing our survey results against the successful direct mail tests they predicted. In plain English: Before you decide on your next direct mail test. Let us conduct a survey to gain input from those who matter most: the target audience. It gives you a no-risk platform to test a wider range of ideas and it can save you the lost...
American voters still have the blues, what about donors?

American voters still have the blues, what about donors?

Before running surveys for non-profits, I was a political polling nerd. While perusing the latest results I decided it would be interesting to run an experiment. All the major polling organizations have their own version of tracking the mood of American voters. I wondered what would happen if we asked our nation’s donors the same questions. I chose a mood indicator used by several organizations and conducted an online poll1  of 600 donors from across the United States. Mood indicator: “All in all, do you think things in the nation are generally headed in the right direction, or do you feel that things are off on the wrong track?” To be a donor, the respondent had to have given a gift to a non-profit organization not including a Church or other house of worship in the past 12 months. I am using the latest report from Rasmussen2 to compare the voter results to our donor study. In short, the mood of American donors is similarly divided on political lines. Conservatives feel much less optimistic about the future than liberals. This was expected since we can assume there is an enormous degree of overlap between donors and voters. However, while liberal voters are divided in their mood, liberal donors are a majority optimistic. See below. Without tracking this over time our interpretive power is limited. For example, we do not know whether these are highs or lows for any group and therefore cannot judge these results in the context of current events. There is however one conclusion that can safely be drawn from this data: Liberals who make non-profit donations are...