3 Top Analytics Techniques Every Fundraiser Should Know

[Editor’s note: This is part 1 of a three-part series based on a session at the 2010 New York Nonprofit Conference held Aug. 24-25. Part 2 will run in next week's edition of FS Advisor, and part 3 will run in the Oct. 5 edition.]

One of the recurring themes during the Direct Marketing Association Nonprofit Federation’s 2010 New York Nonprofit Conference, held Aug. 24-25, was the need to innovate and take risks during tough times. In one of the final sessions of the conference, Don Austin, director of analytics at Infogroup | Nonprofit, reiterated that theme. “Think about taking calculated risks in these times,” he said.

Austin, along with co-presenters Lawrence Henze, managing director of Blackbaud’s Target Analytics, and Bryan Terpstra, vice president of client services at LW Robbins, described three ways fundraisers can do that using analytics in their session, “Analytics in Plain English: 3 Top Techniques Every Fundraiser Should Know.”

The missing link — the search for mid-level giving prospects
Henze kicked things off by shooting down the historical donor pyramid myth. Whereas the old model showed a pyramid like the ones the Egyptians built in ancient times, in reality, most organizations’ donor bases have a really strong foundation of lower-level donors, but then the “pyramid” dramatically thins out the higher you go on the giving levels, looking more like a skyscraper than a pyramid.

The key, Henze said, is to encourage transitional gifts — a technique of moving donors through one level of giving toward the top. But first, you must start by building the middle of the pyramid. To do that:

• Focus on individuals “transitioning” from lower annual giving amounts to mid-level giving clubs.
• Use data mining or predictive modeling to identify individuals on a transitional trajectory.
• Implement high-touch cultivation and solicitation strategies to interact with these prospects.

“If we don’t identify transitional prospects — most people don’t rise to their potential without a push,” Henze said. “If you do analysis, it will point you in different directions. Let the data drive your fundraising.”