Category Archives: data analytics

Prospecting, Analytics and Data for Gift Planning

The St. Louis Planned Giving Council was a terrific setting to discuss changes (and continuations) in prospect development. The group discussed what’s the same, what’s new, what’s working and what’s on the horizon.

You can find my presentation on the topic here: SLPGC – Prospecting Discussion, November 2014.

Best of luck with your fundraising initiatives as year end approaches.

 

 

3 Analytics Challenges: Context, Endogeneity and Spurious Results

Donor Analytics ContextAn interesting visual depiction of spurious correlation (check it out here) reminded me of my grad school days and the rigor with which I would build hypotheses. Rather than let R, SPSS, or Excel correlate away and then proclaim some amazing finding, I started from the reasons and results I expected to validate with data. The difference is, all too often, that the former approach tells you very little due to endogeneity, spurious results, and the lack of context.

Some organizations–Google is known for this–will say “don’t worry about the why”. Some have referred to this approach as “theory-free“, a nice euphemism to indicate how little long-term value we might find in these correlations. Now, for consumer behavior where Big Data is truly present  perhaps this works. But, data points are rarely available for nonprofit analytics in the same way as, say, Target and Wal-Mart have data…although there are new options underway, like David Lawson’s newsci.co.

And, if you talk with a gift officer who’s been disappointed with predictive modeling results, you see a different picture. From that vantage point, the analytics results are frequently devoid of context. The result confirm what we already knew (“these prospects look rich! they live in a nice neighborhood!”) or reflect a pattern we already see (“they gave last year! let’s ask them again!”). Yet, modeling doesn’t typically improve relationships with prospects.

A big culprit: Context. Donor context is critical in building relationships. And, context is quite challenging to incorporate into modeling. The following are real examples of discussions about potential prospects surfaced by a context-free model:

  • “Sure, Jane looks promising, but we don’t have a phone number to reach her and no volunteer connection, so how likely is it she’s approachable?”
  • “Absolutely, Ed looks great, but did you know he just filed for divorce?”

The solution to this issue isn’t to cast off analytics. It’s to improve it. Start with and add in theory. Guard against spurious results. Don’t elevate an endogenous variable as meaningful. And, most of all, our industry needs resources that can actually add context to results. As a student of philanthropy, I am anxiously awaiting the time when our new science of analytics better delivers on the hype and improves our understanding of donor behaviors, while avoiding endogeneity and spurious results.

Are you using Infographics as reporting tools? You should be.

During National Business Intelligence (BI) Month, a number of top-notch infographics have caught my eye. These handy visuals are really reports, depicting data and details germane to a topic. But, they are also much more. They provide guidance about how to use the data. They tell a story. They provide business process guidance. In short, they’re quite helpful and you should be looking into how these can help your fundraising efforts.

I should note that I know this topic is not new. Infographics have been around for years and some folks have declared them irrelevant or unhelpful. However, any visualization of information that tells the story you need told can be valuable, so infographics likely have utility in your shop.

BWF Analytics Infographic

For example, our firm created a handy infographic (on the right) to present data from a survey we conducted on analytics. This image is really many reports in one. It presents the data in a logical order. In general, it is a useful guide to the topic of fundraising analytics, benchmarking for staff, and related information.

So, how should you set about creating an infographic?

  1. Determine your topic. Infographics can be great for 40,000 foot ideas as well as minutia, but generally not both.
  2. Find your data. What data do you have to display? What data would you like to go get?
  3. Lay out your story. The visual aspects of this process are important. Do you want the reader to “take it all in”, “follow along”, or just see some useful visual depictions of data and interpretation?
  4. Pick a infographic tool and get going. Many tools are out there. Check out this resource for some good and free tools.

Finally, I thought I’d take some of my own advice (for a change!). Below is the inaugural fundraisingoperations.com infographic. It uses data from a survey I did for my 2011 book An Executive’s Guide to Fundraising Operations. While my effort isn’t as amazing as this awesome college football bowl game pic, I created it in 20 minutes. Have any great infographic examples? Drop your links in the comments. Happy infographic-ing!

Data Quality and Quantity, v2
This pic presents data from Cannon’s 2011 book on fundraising operations, which shows how data quality expectations and perceptions vary.

January is National Business Intelligence Month…

…didn’t you know that? Of course you didn’t. With the holidays, closing some year-end gifts (not to mention the books), and learning an awful lot about Amazon’s post-holiday online return policy, how could you keep up with all of the information being thrown at you. It’s hard enough to have the right information, much less use it effectively. Plus, it’s not really National Business Intelligence Month. I made that part up.

So, why the subterfuge? We need to draw attention to the critical need in the advancement business for more and better reporting and analysis. Some of you already have what you need. Some stopped looking years ago. Some have that “special” report that some poor person spends hours to prepare. But, most of us want better reporting, the kind that actually helps us make decisions about the business and tells us things we otherwise wouldn’t have known.

Better reporting requires a few things. This flow chart shows the way to better reporting. But, even more important than creating reporting is turning it into business intelligence.

Report Development Cycle

Let’s work to get even better data into even more clear reports that drives even better decisions. Let’s stop with the ad hoc, don’t-really-learn-much urgent reporting and develop a thoughtful suite of reporting that allows you to direct the team. Let’s develop shared definitions and expectations, allowing our reports to mean the same thing no matter the audience. So, know that I think about it, let’s make January National Business Intelligence Month. Make sure to put it on your calendar for next year.

December 2012 is National Month Month…

…or so I tweeted a few weeks ago. My plan is to envelope the work we lovingly call fundraising operations, or advancement services, or “the back office”, or “you know, that stuff they do with computers” into 12, neat monthly categories. The purpose is to drawn attention to whole sets of work that we sometimes avoid but can never quite escape (I’ve tried).

So, for those of us so fortunate to be toiling away the day after December 25th, what “National _____ Month” would you designate and why?

Change is Hard…but Decline is Worse

Development and alumni organizations face obstacles and challenges each day. It seems that pressure comes from all sides and angles. Raise more money, despite a slow economy. Engage more people, despite increasing competition for space in people’s lives. Lately, two core changes have been impacting nonprofits around the country: leadership changes and technology issues. Both of these affect fundraising operations, and finding a way to “handle” these issues is critical. On the leadership front, high functioning presidents and vice presidents are in high demand. Tenures of university presidents and healthcare CEO’s declining. There’s not much most can do to stop this slide, except to be prepared for it to happen. On the technology front, 2012 was full of mergers and other changes that substantially impact development technology suites. Much of this change is aligning with the tail-end of many product life cycles. These changes affect every nonprofit for a donor database, so one of these days these marketplace changes will affect each organization. More change is stemming from social, online, and BI-based innovations occurring at a pace that’s hard to match. The most dangerous aspect of the core changes is the all-too-frequent dip in productivity organizations experience “as a result of” the change. This issue is in quotes because, while leadership and technology change is hard to “manage” (we typically don’t have much control), these changes can be anticipated and protected against. The good news is that both of these changes can be managed through a similar set of solutions which will keep decline at bay in the midst of change:

  1. Plan the work. A plan that aligns with the organization’s mission and vision will help ride out the turbulence from a big leadership or technology change. You might be surprised at how effective a good plan is in keeping the trains running on time.
  2. Work the plan. The plan should have measurable targets for behavior. Great plans will reward and steer attention to the highest value activities we can muster. So, if the plan is in place, working it should generate the results your organization needs, despite a presidential transition or a looming conversion.
  3. Avoid the tyranny of the urgent. In both cases, careful change management (starting with requirements, weighing options, evaluating real and intangible costs) must prevail over short-term thinking and flailing actions. Plus, reminding folks about what’s important in their daily work and the impact their role has on the organization’s constituents can help retain staff despite rough patches.
  4. Get in front of disruptive change. This last issue is the most complicated and I’ve dedicated a separate blog to it. Leadership and technology changes are disruptive, often resulting in entirely new ways of doing business. We have seen in 2012 with Hostess, and over and over again for Kodak, that markets move on, and our offerings must match today’s and tomorrow’s needs. As fundraising tactics shirt around direct response, as phonable and mailable constituents decline, as the nature of our organization’s missions and deliverables change (think MIT’s free open courseware offerings and the impact of the Affordable Care Act on healthcare philanthropy), our fundraising strategies and tactics must keep pace.

And, if we plan the work, work the plan, and remain focused on the important, we can get through change without a dip n productivity. Do you have suggestions for handling change and avoiding declines in the process? Let’s hear about them!

8 Secrets of Success

Fundraising operations is tough business. You must carefully balance accuracy, speed, and volume issues. The details are mundane and the technology is complex. Last week, I had a chance to share 8 secrets to spinning like a top via the AFP webinar series. I had a lot of fun crafting the session. It was also challenging because there are more like 800 secrets to successful operations.

Here’s a summary of what I see as the dirty little secrets that, once known, can help your operations spin like a top:

  1. Not all data matter. We spend way too much time on record maintenance for the masses and not enough on our front-of-the-line constituents!
  2. Technology trickery. We fool ourselves into thinking that technology does everything for us. It’s just a tool. Databases don’s ask people for gifts. For more, click here.
  3. Easy to avoid. Analysis paralysis, particularly the millions of unnecessary ad hoc reports we seem determined to create each year as an industry, is easy to avoid. Pick your best reports and use them to make decisions, consistently.
  4. (Mis)Perception problems. We talk past one another and understand things differently. Once we realize that two smart people can view the same scenario differently, then respect each others’ vantage point, we can make real progress. I did a Prezi on this topic with my colleague Cassie Hunt last year; check it out.
  5. Conversions are easy. The act of converting data from one database to the other is the easy part. The hard part is that technology transitions take years, require multiple iterations of implementation efforts, and never really stop.
  6. Forecasting is undervalued. we don’t spend enough time looking into the future. For prospects, for proposal pipelines, for budgets, for staff growth…we generally get too caught up in what’s in front of us, at a huge overall cost.
  7. Power to the people. Our industry is suffering from turnover, often due to lack of training, weak salary levels, or a lack of trying to retain our folks. The costs here are tremendous, particularly if your operational institutional memory walks out the door. Here’s a good look at the issue by my colleague, Mark Marshall.
  8. Discipline, discernment, and delegation. If we exercised the 3 D’s in all operations areas, we would make substantial strides to spinning like a top.
Like I stated, though, these are just 8 of the hundreds and hundreds of nuanced, secret, subtle issues that affect fundraising operations. What are your secrets to success?

Is 99-1 the new 80-20? And, if so, how do we deal with this?

Most of us have heard of the Pareto Principle, or the 80-20 rule (80% of production comes from 20% of the resources). For years, philanthropy experts have used this economics principle from Vilfredo Pareto to explain why so much giving comes from so few people.

Of course, for many of the “best” fundraising organizations, that ratio is more like 99-1. That is, in many cases, single, sometimes 9-figure gifts dramatically shift the fundraising landscape for an organization. These great gifts are frequently transformative and non-repeatable, making the replacement of such big gifts a driving and often maddening force for fundraisers. And, such huge gifts may have the unintended consequence of diminishing future, smaller donations from others whose future in the 1% is yet-to-be-determined.

How should you deal with your organization’s experiences with this rule? Here are two angles of approach.

First, your team (researchers, analytics folks, prospect management professionals, gift officers, etc.) need to know wealth, and particularly your organization’s profile. How is it generated? Who has it? Who had it? Who can get more of it, so big gifts are reasonable? Who has so much that they’d like to leave a legacy instead of being the richest guy in the graveyard. A great set of articles in the NY Times (click here) puts some perspective on how new wealth is being generated. Your team needs to know these trends, your constituent’s sources of wealth, and stay on top of it.

Second, and slightly related to the other 99-1 “Occupy” messaging so prevalent in 2011, your team needs to understand that the enormous gap between the super-rich and the rest of us has big ramifications for your programs and your mission. Sure, we need to devote more time to our best prospects. But, you cannot just focus on the super-rich, because it’s a fluid and sometimes cloaked group. And, for many nonprofits, mass-effort, grassroots fundraising pays the bills, even if less efficiently than 7- and 8-figure gifts seem to. So, your team should work hard to treat all constituents well, while employing effective annual giving, analytics and other tactics to maintain base building efforts that help the best bubble to the top.

So, our fundraising efforts need to efficiently direct energy toward the 1% while conscientiously engaging the 99% as valuable near-term partners, some of whom may matriculate into the 1% (or are already there!).

UPDATE: CASE provided some great data on this topic. Here you can see the impact of the top few percent of donors on campaigns. It appears this is a little more like the 70:1 rule, but the lessons are the same:

Leveraging your Systems in a Changing World

Competition in the fundraising software marketplace has yielded some big changes and some even bigger questions. Organizations are increasingly asking the “should I stay or should I go” question, no matter what system they’ve implemented. Questions of which vendor, which product, and with what impact and effects can be difficult to answer these days. Corporate mergers, shrinking client bases, growing product portfolios, and increasingly “flexible” applications complicate assessments.

Your fundraising software should help your organization raise money and build relationships. Period. As odd as it is coming from a fundraising operations guy, nonprofits can (potentially) raise as much money from Rolodexes as CRMs. But, better tools should support better results. So, what’s a smart fundraiser to do? Consider these five questions:

  1. Necessary vs. Nifty. If your team hasn’t shown the ability to leverage what’s already available and critical to supporting fundraising, a new and nifty tool won’t likely help.
  2. Expense vs. Cost. Change has costs, but your budget (within reason of typical fundraising results) should’t be the deciding factor. TCO (total cost of ownership) should include opportunity costs, which could show an inability to manage critical data and relationships that result in leaving money on the table (or not even knowing which table to visit!).
  3. Capacity vs. Complexity. New tools (or moving from old tools) can seem like a great option. The reality is often different from expectations, though. What may appear to be a penchant for expanded applications (capacity) is frequently stymied by the time and energy needed to adopt more complex tools.
  4. Perception vs. Performance. Perceptions about systems use (see Gartner.com’s hype cycle work) generally follow the “grass is greener” model. However, actual selection, conversion, and implementation of a new system may not generate the performance improvements desired.
  5. Culture vs. Change Management. Most tools are a reflection of the culture they support. Transparent teams like KPI’s and broad access to  systems because they foster openness. More risk averse teams may never be able to launch and leverage a robust CRM because they aren’t willing to share “so much data.”

These five contrasting issues are the starting point for your “stay or go” question. Before your team even starts to entertain the “where,” make sure you’ve established the “why” and that you’re asking the question for the right reasons. This will increase your likelihood to leverage systems, not just buy and install new, still-ineffectual tools.

These ideas stem in part from a series of client-based trips and discussions I’ve been involved with in recent weeks. We seem to start on the path of “tools” and move quickly to “behavior.”  There’s a potentially controversial tag line from the NRA that “Guns don’t kill people, people kill people.” The obvious point here is that tools are only as effective as those who use them. I prefer the message carried forward on Happy Gilmore with the Mr. Larson, aka Jaws from the Bond series wearing this great shirt–“Guns don’s kill people, I kill people.”

Of course, I’m no homicidal sociopath, I simply like the idea that it’s personal responsibility for the tool that yields the right results. So, to leverage your systems, look first in the mirror.

“I’m calling on behalf of…”

Last night, 8:32 p.m. CT. A truncated transcript from a call (note: I’m sensitive to using a single anecdote to make decisions, but this was teachable moment):

(me): “Hello”

(some guy, about 10 second later): “Hello? Um, hello?”

(me): “What can I do for you?”

(some guy): “Is Mr. or Mrs. Cannon home?”

(me): “This is Chris Cannon?”

(some guy): “This is [name] calling for [top 10 national nonprofit]. I’m not calling to raise money. [really?] I’m calling to ask you to write10-15 letters…[script went on for another minute]”

(me): “Thanks. That’s not really how we like to participate in the organizations we suppo…”

(some guy): Click.

Seriously? I answered the phone, listened to some guy, and was interested enough in the organization to start to tell him how I might become engaged and that guy hung up. The reminder here is that we entrust dozens, maybe hundreds of people to our philanthropic brand each day. Are you doing all you can to train, engage, and otherwise prepare these folks to be good stewards of your good will? Are callers on quotas that diminish real discussions? If you’re not addressing these issues, your fundraising may suffer along with your brand.

The phone call didn’t provide the only lesson, though. After hang-ups, etc., I frequently call the organization back. I care a lot about nonprofits, and I’d bet management would like to know when their good reputation is being sullied.

So, in calling this organization back, an odd and maybe very dubious thing happened. The 800 line provided an opt-out (“press 2 if you do not want to receive calls like this”). I pressed “2”. Then, I had an option to add my number to the organization’s opt-out list. Terrific, I thought. I didn’t want more wasted calls like the one I had just experienced. Next, though, a very curious thing happened. I entered my phone number but the computer program didn’t register it correctly. I entered my area code but the computer-generated response indicated a different number. My wife watched me enter the correct number, only to hear the wrong number repeated back. I hung up and called back with similar results. I tried a third time and the computer program finally “figured” it out. Computer programs can fail, of course, but it sure felt like a purposeful, nearly endless loop to get off the list.

So, the second lesson of such a call is that, even if it’s an error or an oversight, you can lose potential donors forever by appearing to be too automated, too computer-driven, and too focused on your agenda rather than your potential donors. Fundraising is my vocation and I encourage groups to push their boundaries. For example, I frequently tell healthcare nonprofits that it’s patently irresponsible not to engage patients as potential donors. I do so because it can raise dollars and I truly believe in the power of philanthropy in the healing process (see a great application from Children’s Minnesota). This advice isn’t about limiting efforts but your strategy should mirror your constituency and stay away from gimmicks.

I’d love to hear your stories about these sorts of experiences. Together, we can help to keep our reputations strong and our (potential) donors happy.