Redefining Fundraising Metrics A Playbook for a 21st Century Development Program

2017 Josh Birkholz

Measuring Success

1. Making Decisions

with Data

2. Major Gift

Fundraiser Metrics

3. Organization-Wide

Analysis

Behavioral Economics

Established

Finding “Actually” Ubiquity of data in business Thaler wins Nobel Prize

Google's founding philosophy is that we don't

know why this page is better than that one: If the

statistics of incoming links say it is, that's good enough.

Wired 2009

35% of Amazon.com’s revenue is generated by its recommendation engine.

McKinsey 2013

On their Watson integration, “Eager for actionable data

insights … that help improve processes and take the

guesswork out of decision-making."

AT&T PR 2017

GE’S BIG BET ON DATA AND ANALYTICS Sloan Review

2016

Now we have strongest executive support in history – they realize the value of analytics and the impact it

has on the bottom line.

Ravichandran, VISA CAO 2015

[We use] a homegrown social tool called "Looking Glass" to monitor people's

trending interest in foods so that Kraft could get ahead of the trend with new recipes.

Elsner. Kraft CMO 2014

Each and every one of Johnson & Johnson’s U.S.

consumer products possesses nearly 400 data

attributes.

Digatalist 2014

Using Data to Guide Decisions (top companies by market capitalization)

Analytics is

more than

prospecting

Most Common Design Methods: 1. Benchmarking 2. Executive Transition

Major Gift Officer Metrics

Primary Flaws: Confirmation Bias and Confounding Factors

Applying Analytics to Performance Analysis

Comparative Analysis

• To determine measurable distinctions for production

Active Calibration

• To manage confounding factors and unintended consequences

Applied to a Study of Major Gift Officer Activity

+

7 Institutions 4 Academic Medicine, 3 Research Universities Distinct projects following same method The following are consolidated learnings

Finding 1: Visits vs. Reach

Visit count

Less effective

Count visited

More effective

Finding 2: Asking to Capacity

What can we get?

Less effective What does

it take to get?

More effective

Finding 3: Solicitation Counts with Floors

Volume alone

Less effective

Volume + level

More effective

Finding 3.1: Solicitation Counts vs. Reach

Number of Asks

Less effective

Number Asked

More effective

Finding 4: Cultivation timeline

Short or long cultivation periods

Less effective

10-12 months

More effective

Finding 5: Tenure

New hires

Less effective Longer

tenures with institution

More effective

Tenure is Correlated with

Dollars raised

r=.333, p<.01

Top performing MGO

r=.212, p<.05

Solicitations per year

r=.391, p<.01

Solicitation level

r=.391, p<.01)

Tenure is correlated with solicitation effectiveness, but not activity

Tenure is Not correlated with

Count of Visits Count of

Qualifications

Finding 6: Prospect Development

Infrequent interaction

Less effective

Frequent collaboration

More effective

The top 20% of producers worked with prospect development

twice as often as all other officers.

From a Related Study on Gift Officer Retention

High performers who stay: Benefit from promotional tracks

Set high standards for themselves and their leaders

Thrive in solicitation-based metrics plans

Stay with an organization longer

Care about the mission

Like to be measured

Solicit more frequently.

Set targets higher compared to capacity

Are more willing to work with prospect development to keep portfolios tuned.

Source: BWF 2015

Organization-wide Analysis Current Research on High-Performing Nonprofits 7 Distinguishing Characteristics

Branding in the High Net Worth Community

Philanthropic Investment Assumptive Sale Impact Maturity Model

Revenue Diversification

Constituent Type Channel Economic Adaptability

Business Model – Supporting Infrastructure Rep-Servicing Lowest Cost Biller

Donor Servicing (Relations) Assign

Discover

Cultivate

Solicit

Discover

Cultivate

Solicit

Donor Servicing (Relations) Filter with analytics Assign

Research Verify

Research Verify

Filter with analytics

Cultivation Process

With Supporting Infrastructure

Discovery work can also be further serviced with multi-channel program

Supporting Infrastructure

Frontline Officers

Pipeline Feeding Process Lifetime Value Sourcing Prospect Development

anonymous identification

lead qualification

qualified lead discovery

not a prospect

prospect

future prospect

is this a prospect?

Analytics

Prospect

Identification

Prospect

Management Strategy

Cultivation

Solicitation

Stewardship

Strategic

Research

Prospect Development Service Model

Active Portfolio Management

Constituent to Program Alignment Rivers not ponds

Target Zone Analysis

Portfolio Review

Rebalancing

Estimated

Capacity Range

Very

Connected Connected

Somewhat

Connected

Modestly

Connected

Not

Connected

$20M+ 12 10 10 6 3

$5M–$19.9M 64 81 28 10 4

$1M–$4.9M 348 357 112 48 27

$100K–$999K 1,212 1,826 430 150 79

$50K–$99K 615 2,457 400 101 54

<$50K 258 2,384 445 176 86

Unrated 2 9 26 95 84

TOTAL 2,511 7,124 1,451 586 337

Adapting Social Science Principles to MG Portfolio Management

Talent Management and Metrics Operational Playbook Talent Sourcing Talent Development

Leadership – Character and Performance Workforce Engagement Talent Retention Transformational gifts

Managing

the Haters

Resistance to data is a fear of professional relevance

There is no “Art-Science” line

Redefining Fundraising Metrics A Playbook for a 21st Century Development Program

2017 Josh Birkholz