A.I. and Fundraising

A.I. and Fundraising

A couple of months ago I blogged about the lack of digital disruption in fundraising. This blog is going to be about the future impact on AI on fundraising – or the lack of it. AI, or artificial intelligence, is one of the most popular topics if you peruse LinkedIn posts these days. Most the articles take one of two approaches: 1. Get ready, AI is going to be wonderful! OR 2. Look out, AI is going to be dreadful! For AI to work, a couple of key things need to be in place. First, AI works best with tasks that are routine and can be standardized. Fundraising is anything but routine and standard. While there are best practices approaches most fundraising professionals would agree on, for every rule there are a dozen exceptions. And the best “exception” for one nonprofit organization is generally not the same for another nonprofit. This is going to require that AI be super flexible. And as we know, complexity is the enemy of automation. This leads me to my second point. Because AI solutions will have to be complex and variable in the fundraising environment, it will likely be expensive. Like all innovations, business verticals with the most to gain are usually the first to adopt. So, between the general lack of money in the nonprofit space and the relatively low payroll threshold of fundraising professionals (I’m with you here) it is unlikely that AI will have much of a foothold in fundraising anytime...
Busting Myths: “Multi-Channel Donors are More Valuable”

Busting Myths: “Multi-Channel Donors are More Valuable”

This is a longer one. If you don’t like details, skip to the ending. The Question For at least the last 10 years, I have heard it said often that donors who give through more than one channel are more valuable than those who give to only one channel. Let’s take a deeper look with a typical org’s data.          Where the Myth Began First up is the misleading calculation that has been used to justify that Dual-Channel donors are more valuable than Single-Channel donors – Lifetime Value of Single-Channel vs. Dual-Channel Donors: Simply comparing the LTV of Dual-Channel to Single-Channel donors paints what appears to be a clear picture: Dual-Channel donors aresignificantly more valuable.                                 While technically true from one perspective, in the actual spirit of the analysis, it is false. Dual-Channel has an inherent bias in that it requires a donor to have 2+ gifts, thus inflating their value against many single-gift, Single-Channel donors.               An Insightful Tweak                        A more rigorous look controls for the problem above by comparing the value of donors who have given 2+ gifts.                                 When you look at it this way, Dual-Channel donors ($847) are still more valuable than Direct Mail Only donors ($258), but in this case slightly less valuable than Online Only ($936). What Does This Mean? Does that mean you should stop cultivating your Online donors in the mail for fear of downgrading them? Absolutely not. Online Only donors are generally harder to retain than Direct Mail. In fact, Online donors are lot less likely to give multiple gifts in the first place. 44% gave a 2nd gift within 3 years...
Has Digital Disruption Skipped Fundraising?

Has Digital Disruption Skipped Fundraising?

The intent of today’s blog is to start a dialog. So, I hope you choose to offer your 2 cents. Over the past 20-years, the digital economy has disrupted just about each industry. Particularly in the business to consumer arenas. How we check out things we are interested in buying and how we purchase them has fundamentally changed. From buying clothes and plane tickets to watching our favorite movies – the internet is now the primary way we do these things. Yet, there are two notable exceptions: Grocery shoppingDonating money While there are digital components to each of these exceptions, they remain minor components. I have some hypotheses. But I’d really like to know what you all think. Why haven’t these two industries been disrupted? And are there any similarities about grocery shopping and donation money that might help us understand this all better. I’m all...
A Walk Into the Sunset or a Walk Off a Cliff

A Walk Into the Sunset or a Walk Off a Cliff

Blackbaud Institute’s 2018 Charitable Giving Report was recently released, and though giving was up 1% (due to large donors), the most disappointing metric for 2018 is that online giving remains stuck below 10% of total giving. Ten years ago, most of us (including myself) predicted that more money would be coming in online than offline by 2019. But donors have been stubbornly resisting the digital transition. This pesky fact has been the subject of much discussion around the watering holes at fundraising conferences. Digital has disrupted nearly every facet of the economy since its arrival a generation ago. Remember travel agents, mail catalogs and Blockbuster Videos? Yet, by and large, the old ways of fundraising remain unchanged. I think most of us would agree that digital fundraising will replace direct mail at some point. The question on my mind is whether direct mail will have a slow, steady walk into the sunset, or will it walk off a cliff because of some new Silicon Valley...

The Power of Anonymity

I have a daughter graduating from high school this month. Her class is heading for a mission trip to serve an orphanage in the Dominican Republic for a week. For her to go on this trip, she had to raise her own support of $1,500, or pay for it out of her savings. Honestly, I was hoping that she could raise half of the money, and then we’d kick in the other half. So, she started her own GoFundMe campaign, and to my utter shock, in the first day she hit her fundraising goal. Apparently, there were a couple of anonymous donors who made some big gifts. I don’t know who these people are, but I am grateful to them. And because I don’t know who these people are (they might even be reading this blog) I am motivated to be grateful to everyone I talk to. Because, I just don’t know. That got me thinking. In my line of work, we go to great lengths to segment donors based on their past or potential giving. And while I have oodles of data that show this is an effective utilitarian approach, I wonder if this approach does cause us to curtail our gratitude? I take these kinds of questions seriously. It’s one of the reasons I love fundraising. We are always struggling to optimize fundraising with a balance of art and science. And while we at Analytical Ones always think your decision should be anchored in the data, they must also be anchored in...
Dual Channel/Schmual Channel

Dual Channel/Schmual Channel

Google the term “dual channel donors” and you will get a plethora of websites stating the virtues of cultivating donors via multiple channels. Some of this information is all myth. We’ve recently done several analyses on dual channel donors, and here’s what we found: They are a lot more valuable than single channel donors, but you already knew that. That’s partly because by definition they are two gift donors. But even when you control for that, dual channel donors are still give more than a donor giving 2 gifts in one channel But here’s the thing, dual channel donors are as rare as unicorns. In any given year, only about 3% of your file give in two or more channels. Most surprisingly, the year after they convert to dual channel behavior, most of these donors revert to single channel giving. And they are equally likely to be offline only giving the following year as online only. So, rather than focusing getting donors to give in two channels, which I think is a waste of time, concentrate on making it super easy for her to give in the channel of her...