Upgrade ROI

Upgrade ROI

Since The Great Recession, two of the macro trends in fundraising are: 1) Organizations’ active donor counts are declining; and, 2) The donors who stay active have been giving more. Thus far, the increase in individual donor value has mitigated the decline in the donor counts. So, organizations are raising more money. As the top end of the donor pyramid has become a greater portion of an organizations’ overall giving, it has become more important for all organizations to efficiently identify donors on the file that have the potential to upgrade to major donor status. At Analytical Ones, we have seen our major donor identification models become one of our most popular products. To see why, check out the table. This table shows the 12-month donor values “before and after” Analytical Ones created a major donor identification model for a client. On the left side of the table in blue are the model scores (1-6+, the higher the score the higher the probability for conversion) and the number of donors who were identified with that score. The next column, in yellow, shows the retention rate by model score. All of the donors identified have better than average retention. In the green columns are the percent of donors who upgraded (gave more than they did the previous 12-months) and the percent that converted to major donor status that year. Note, as their score increases, so does the percent of conversions. In the orange columns we show three metrics. The 12-month value of the donors who did upgrade before the client received our major donor identification model, and the 12-month value...
The Power of a Major Donor Model

The Power of a Major Donor Model

  Think about this and see if it doesn’t convince you of the value of a major donor model to identify prospects on your donor database. These are actual numbers from one of our clients. What are the odds of any donor reaching major donor status? About 1 in 1500 What are the odds of a donor with a net worth of $1 million becoming a major donor? About 1 in 900 What are the odds of a donor whose first gift is $100 or more becoming a major donor? About 1 in 400 What are the odds of a donor with an Analytical One’s top major donor prospect score becoming a major donor? About 1 in 4 Any...
Modeling – Art vs. Science (What is a Model – Part II)

Modeling – Art vs. Science (What is a Model – Part II)

My first full-time job was as a Statistical Analyst building credit scoring models at a company that no longer exists. Now virtually all of those models are built by FICO and my old company was absorbed by them years ago. It was a great first job and one reason was because I certainly learned what it takes to get a loan or a credit card and what NOT to do if you wanted good credit. I learned that having a credit card or two is good, but having 24 credit cards that are all maxed out is bad. That’s where some of the art part of building a model comes in. I talked about the science of building a model in my last blog, but one of the exciting parts of building a model for us analysts is more of an art — finding a new variable that hasn’t been used before. For example, in building a model to tell if you’re a good credit risk, it may be bad if you have a lot of debt, or it may be a good thing because you’re a high earner and you have a loan for a house and two cars and a boat. A bigger risk is your debt ratio – you total amount of debt divided by your total amount of credit. If that’s too high and you’re maxed out, that’s bad. In fundraising, sometimes the variables that are less obvious may tell us that you are more likely to be a major donor or planned giving donor or that you’re more likely to reactivate from being a...