Fundraising Analytics Putting the Results to Work for You

Strategies. Solutions. Success. Fundraising Analytics Putting the Results to Work for You PRESENTED BY: DOUG HUTCHINGS & DON SOUHRADA OCTOBER 20, 2015 20 TH ANNUAL MIDWEST CONFERENCE ON PHILANTHROPY www.twbfundraising.com www.advocategiving.org 1

About the Presenters Doug Hutchings Advocate Children s Hospital Vice President, Development Don Souhrada Ter Molen Watkins & Brandt Vice President Beginning in 1982, has experience leading non-profit organizations philanthropic efforts. In addition to Advocate, he was with Bentz Whaley Flessner and TW&B consulting firms, served in senior development roles with Allina Health in Minneap0lis, St. Louis Children s Hospital and the Children s Hospital Foundation in Milwaukee, Wisconsin. Has over 20 years of Development experience including roles at University of Chicago Medical Center and Rehabilitation Institute of Chicago Specialist in evaluating institutional donor bases in anticipation of a major capital campaign 2

Client Case Study Social Service Agency FUNDRAISING ANALYTICS The organization was attempting to undertake a multi-million capital campaign, but had a weak board that was not stepping up with large gifts The number of gifts to the organization had declined dramatically Organization had recently purchased a mailing list of 150,000 names for solicitation to try to increase donor base. The mailing generated a disappointing 150 returns or a response rate of.001% The cost to mail to 150,000 people was approximately $82,000 and the mailing generated $2,250. 3

Giving By Number of Gifts Gift Level FY07 FY08 FY09 FY10 FY11 TOTAL 18,064 16,672 13,619 10,979 9,314 4

Giving By Number of Gifts 5 Gift Level FY07 FY08 FY09 FY10 FY11 $10K+ 6 7 12 12 9 $5K 9.9K 9 10 12 20 29 $2.5K - 4.9K 27 34 24 38 41 $1K 2.49K 93 115 136 116 128 $500-1K 173 188 188 196 207 $250 499 360 358 337 332 351 $100-249 1,891 1,803 1,586 1,538 1,445 $50-99 2,513 2,229 1,896 1,717 1,605 $15-49 7,343 6,538 5,470 4,413 3,631 $0 14.99 5,649 5,390 3,956 2,867 2,267 TOTAL 18,064 16,672 13,619 10,979 9,314

Giving Amounts Total Giving Gift Level FY07 FY08 FY09 FY10 FY11 TOTAL $1.34MM $1.44MM $1.43MM $1.42MM $1.34MM Average Gifts Gift Level FY07 FY08 FY09 FY10 FY11 TOTAL $77 $87 $105 $129 $145 6

Total Giving From Gifts Of $15 Or Less Gift Level FY07 FY08 FY09 FY10 FY11 TOTAL $45,490 $33,314 $25,548 $20,160 $15,954 7

Total Giving From Gifts Of $15 Or Less Hypothetical 70% Year Over Year Retention Of Individual Donors Giving $25 Or More FY07-FY08 FY08-FY09 FY09-FY10 FY10-FY11 TOTAL Starting Donor Count 8948 8266 7553* 7135* Donors Renewed 6301 5786 4530 4045 Retention Rate 70% 70% 70% 70% Increased # Donors 355 757 949 FY Average Gift $87 $105 $129 POTENTIAL LOST REVENUE $30,885 $79,485 $122,421 $232,791 8

What is a Portfolio? A specific set of suspects, prospects, and donors with whom we will interact so together, we may advance our organization. An organization-level portfolio is a collection of donors and prospective donors selected for the purpose of raising funds for strategic priorities. 9

What is Portfolio Management? The centralized management of one or more portfolios, which includes identifying, researching, cultivating, soliciting donors and their gifts in order to achieve specific organizational objectives. 10

Typical Portfolio Criteria Wealth/Giving capacity and history Linkage/Engagement with cause and organization Likelihood of giving (motivation and philanthropic intent) Readiness 11

Portfolio Management Cycle FUNDRAISING ANALYTICS Repositioning Research Evaluation Analysis Execution Assignment Strategy & Goal-setting 12

RESEARCH 13

Old School Analytics: RFM Recency Frequency Money 14

Your Campaign Philanthropic or political? A charitable gift is like a vote Political campaigns use analytics On which doors should you knock? 15

On Which Door Should You Knock? No campaign will secure 100% of the vote 100% participation isn t necessary There are not enough resources to make it possible Where do you start? 16

How Do They Do it? Hard Assets: Real Estate, SEC Filings, Airplanes Ownership, Boat Ownership Board Membership Political Contributions Philanthropic History Predictive Modeling 17

Benefits to Wealth Screening Identifies prospects to build gift pyramid Directs staff to actionable prospects Increases productivity Help to discover prospects for cultivation 18

What Is Your Goal? Generate more major gift prospect Identify annual fund donors for upgrade Increase $1,000 donors Populate a campaign prospect table? 19

Keeping It Real How many prospects can we mail, call or visit? How many prospects do we need to fill our portfolios? Are we using best practices in our annual fund and major gift programs? Are we actively cultivating the donors and prospects we have now? Do we evaluate the results of our current fundraising strategies? 20

Wealth Screening Vendors TW&B Partner 21

ANALYSIS 22

Prospect Pool BEST UNIVERSITY CONSTITUENCY MG Capacity Alumnus Parent Trustee Grand Total $1,000,000+ 14 13 8 35 $500,000 - $1,000,000 31 23 3 57 $250,000 - $500,000 79 104 5 188 $100,000 - $250,000 406 539 10 955 $50,000 - $100,000 822 1,046 12 1,880 $25,001 - $50,000 1,489 1,542 1 3,032 Under $25,000 1,605 2,087 3,692 Not rated 8,085 4,538 19 12,642 Grand Total 12,531 9,892 58 22,481 23

5 Year Giving vs. Capacity Lower Capacity Range # of Prospects FY10-FY14 Giving Total Giving Pool Capacity Not Rated 12,642 $32,062,705 $73,811,867 NA $1 17 $1,860 $9,195 $17 $50 10 $1,000 $10,223 $500 $100 27 $18,084 $106,352 $2,700 $250 26 $3,255 $26,599 $6,500 $500 19 $1,825 $12,637 $9,500 $1,000 59 $21,560 $57,246 $59,000 $2,500 115 $12,433 $74,875 $287,500 $5,000 543 $278,590 $1,208,265 $2,715,000 $10,000 2,876 $1,585,874 $7,260,515 $28,760,000 $25,000 3,032 $4,433,805 $16,245,539 $75,800,000 $50,000 1,880 $23,266,553 $43,944,526 $94,000,000 $100,000 955 $36,241,757 $58,634,579 $95,500,000 $250,000 188 $14,091,129 $35,105,041 $47,000,000 $500,000 57 $6,340,960 $14,845,190 $28,500,000 $1,000,000 35 $357,465,514 $440,160,160 $35,000,000 Grand Total 22,481 $475,826,904 $691,512,809 $407,640,717 24

Assigned Prospects: Comparison by Internal & External Ratings MG Capacity Overall MG Rating $1M+ $500K - $1M $100K-$500K $50K - $100K $25K - $50K Under $25K Not Screened Grand Total $10 million and up 6 4 1 11 $5 million - $10 million 4 4 2 10 $1 million - $5 million 12 9 18 6 1 46 $500,000 - $1 million 1 15 26 7 1 2 3 55 $100,000 - $500,000 1 178 31 6 5 221 $50,000 - $100,000 7 100 11 3 6 127 $25,000 - $50,000 2 6 56 7 3 74 $0 - $25,000 1 15 12 28 Unable to Rate 1 1 No Overall MG rating 3 3 107 110 74 38 328 663 Grand Total 27 31 344 260 149 66 359 1,236 25

Unassigned Prospects MG Rating/Overall MG Rating # of Prospects Lifetime Total Giving Last 5 Years- FY10-FY14 Giving 5-yr Potential Giving $1,000,000+ 8 $2,284,067 $2,264,542 $8,000,000 A. $10M+ 1 $2,250,000 $2,250,000 $1,000,000 C. $1M - $5M 2 $9,900 $1,500 $2,000,000 No Overall MG Rating 5 $24,167 $13,042 $5,000,000 $500,000- $1,000,000 26 $2,572,452 $586,955 $69,600,000 B. $5M - $10M 1 $5,000 $5,000 $100,000 C. $1M - $5M 2 $986,609 $147,549 $15,000,000 D. $500K - $1M 8 $5 $5 $100,000 No Overall MG Rating 15 $3,796 $100 $100,000 $250,000 - $500,000 103 $1,577,042 $434,301 $54,300,000 C. $1M - $5M 1 $2,834,288 $211,902 $25,750,000 D. $500K - $1M 2 $7,795 $0 $250,000 E. $100K- $500K 24 $4,000 $0 $500,000 H. $0 - $25,000 1 $336,844 $40,516 $6,000,000 No Overall MG Rating 75 $513 $513 $250,000 $100,000 - $250,000 696 $2,485,136 $170,873 $18,750,000 D. $500K - $1M 1 $151,688 $26,350 $13,000,000 E. $100K- $500K 150 $4,425 $0 $500,000 F. $50K- $100K 1 $4,155 $0 $1,000,000 G. $25K- $50K 1 $65,793 $19,250 $4,000,000 No Overall MG Rating 543 $77,315 $7,100 $7,500,000 Grand Total 833 $7,842,495 $3,089,749 $116,350,000 26

ASSIGN your PORTFOLIOS 27

Portfolio Review Prospect Manager # of Managed Prospects Other Prospect Managers 61 DO1 135 DO2 175 DO3 85 DO4 201 DO5 129 DO6 36 DO7 179 DO8 235 Grand Total 1,236 28

Team 1- Prospect Ratings Based on team ratings, Team 1 can meet its FY13 team goals. The full FY13 potential is $35.6M compared with $21.5M team goal. The Campaign fundraising potential from the Team 1 prospect pool is $178M. Fundraiser Name $100M+ $50M- $99.9M $25M- $49.9M $10M- $24.9M $5M- $9.9M $1M- $4.9M $500K- $999.9K $100K- $499.9K Under $100K N/A for Orgs TBQ Total Portfolio FY13 Goal ($Million) Adjusted Value Annual Giving Potential ($Million) Adjusted Value Campaign Giving Potential ($Million) DO1 1 4 4 15 2 5 5 24 60 $5.00 $13.02 $65.10 DO2 1 5 1 3 10 40 60 $7.50 $1.35 $6.76 DO3 1 3 4 3 11 4 11 10 1 28 76 $9.00 $21.22 $106.12 Team Total 1 1 3 8 8 31 6 17 18 11 92 196 $21.50 $35.60 $177.98 29

STRATEGY and GOAL-SETTING 30

Donor Strategy Development What additional information do I need to discover in order to move the donor to the next stage? What actions do I need to take to move the donors to the next stage? Who else do I need to involve? What is the timeframe? What response am I seeking from the donor? 31

Performance Goals Clear and transparent metrics for all What Metrics: # of visits # of substantive actions # of asked solicitations Total value of asks Yield/closure targets raised 32

EXECUTION 33

Visits (aka Person to Person Engagement) Visits are the gold standard for production A visit or engagement takes place in person, by phone, or electronically and when the exchange is substantive. The engagement is substantive when you learn more information about: Capacity Readiness Philanthropic priority Organizational interest Expected impact of gift Who might influence desire to make a gift Who else might be involved in decision Commitment level/timing 34

Plan Your Moves and Execute! Focus on top prospects first Set dates for each move Create a monthly to do list Reserve time every day execute appropriate moves Touch every donor in the portfolio Document every conversation and move you complete 35

Performance Benchmarks Compare to your internal production Determine internal benchmarks based on: Organizational culture of philanthropy Maturity and sophistication of fundraising program Staff experience and tenure Size of prospect pool Knowledge of prospect pool 36

EVALUATION 37

Example: FY Projections FY14 - Projections Projected Actual Paperwork in House Carryover solicitations Asked/Oral Pledge - Discounted by 2/3 Not Yet Submitted Total FY14 End FY14 Goals Estimated % Goal Principal Gifts Baseline Gifts Annual Funds Memorials and Other Gifts Bequests Non-Federal Grants Total (without PG) Total (with PG) 38

REPOSITIONING 39

Objectives Taking and applying the analytics results seeks to achieve the following objectives: Maximize major and planned gifts in support strategic priorities. Make sure that the right development staff and key volunteers are working with the right qualified prospects, at the right times, in the right ways. Communicate clear, accurate, and timely information to help evaluate the progress and effectiveness of development s major and planned gifts program to persons inside and outside your organization. 40

Tiers Major gift donor/prospect Tiers need to be established: To determine readiness. To dovetail with your database management system. To avoid creating a shadow system. As there are many variations on how to rate this group develop and adhere to something that works for you and the team. 41

Tier 1: Solicitation Ready to solicit for a $25,000+ gift commitment within 1 12 months. Ideal portfolio volume: 20 qualified prospects Fluid: Tier 1 Tier 2 o o Qualified prospects solicited and closed move to Tier 3 (stewardship) or to donor relations and stewardship staff (permanent stewardship). Qualified prospects not ready to solicit move to Tier 2 or to prospect research for coding as Not a Prospect Now. Tier 3 Tier 4 Discovery Pools All Tier 1 qualified prospects continue to be solicited through annual giving program. 42

Tier 2: Cultivation Ready to solicit for a $25,000+ gift commitment within 12 24 months. Ideal portfolio volume: 40 qualified prospects Fluid: Tier 2 Tier 1 o o Qualified prospects ready to solicit move to Tier 1: Solicitation. Qualified prospects not ready to solicit within 24 months move back to prospect research to be coded Not a Prospect Now. Tier 3 Tier 4 All Tier 2 qualified prospects continue to be solicited through annual giving program. Discovery Pools 43

Tier 3: Stewardship Qualified prospects who have made a major gift commitment ($25,000+) and are deemed capable and interested in making another major gift commitment. Ideal volume: 20 qualified prospects Fluid: Tier 1 Tier 2 Persons move into Tier 3 after committing to/making a major gift. Tier 3 Persons move back up to Tier 2 and/or Tier 1 in 12 36 months. Major gift donors deemed unable/unlikely to make another major gift are assigned to donor relations and stewardship (permanent stewardship). Tier 4 Discovery Pools All Tier 3 individuals continue to be solicited through 44 annual giving program.

Tier 4: Discovery Qualified leads for discovery meetings during next 1 12 months. Determine whether qualified leads are qualified prospects for $25,000+ gift commitments. Ideal volume: Fluid: 40 qualified leads if not visited within 12 months, return discovery pool. Number of qualified leads in Tier 4 based on the number of Tier 1, 2, and 3 qualified prospects in major gift officer s portfolio. Qualified leads evaluated to be qualified prospects move to Tier 2 or even Tier 1. Tier 1 Tier 2 Tier 3 Tier 4 Discovery Pools Qualified leads who do not move to Tier 2 or Tier 1 are coded as not a qualified prospect now or not a qualified prospect ever. 45 All Tier 4 individuals continue to be solicited through annual giving program.

Discovery Pools Feeder pools of unassigned qualified leads. Available for assignment to major gift officers when they need to replenish their qualified leads for Discovery (Tier 4). Staff should access assignment pools when out visiting and/or have available time for discovery meetings. All qualified leads in discovery pools are solicited through annual giving program. Tier 1 Tier 2 Tier 3 Tier 4 Discovery Pools 46

Development Officer Portfolios FUNDRAISING ANALYTICS Tier 1 20 Prospects Tier 2 40 Prospects Tier 3 20 Prospects Tier 4 40 Qualified Leads Example of Mature Portfolio Average number in portfolio = 125-140 Tier 1 15 Prospects Tier 2 20 Prospects Have clear parameters for portfolios and new prospect assignments - goal is to manage the best major and planned gift prospects. Use wealth asset screening data along with internal factors, such as giving histories, to develop portfolio criteria. Adjust portfolio composition based on each development officers experience, program area, constituency, donor base, etc. Example of Less Mature Portfolio Tier 3 10 Prospects Tier 4 90 Qualified Leads 47

Time Limitations Setting time limits for the maximum number of months the prospects should reside in a stage helps plan, strategize, and stay on track for discovery with qualified leads, cultivation, solicitation, and stewardship. Development Stage Maximum Months in Stage Qualification/Discovery 12 Cultivation 24 Solicitation 12 Stewardship 36 48

Meetings: Mature Intentional One-on-One Meetings Meetings Tier 1: Solicitation 20 Qualified Prospects x 4 Visits = 80 Tier 2: Cultivation 40 Qualified Prospects x 2 Visits = 80 Tier 3: Stewardship 20 Donors/Qualified Prospects x 1 Visit = 20 Tier 4: Qualification/Discovery 40 Qualified Leads x 1 Visit = 40 Total Visits = 220 Monthly Visit Range Metric = 18-20 49

Meetings: Less Mature Intentional One-on-One Meetings Meetings Tier 1: Solicitation 15 Qualified Prospects x 4 Visits = 60 Tier 2: Cultivation 20 Qualified Prospects x 2 Visits = 40 Tier 3: Stewardship 10 Donors/Qualified Prospects x 1 Visit = 10 Tier 4: Qualification/Discovery 90 Qualified Leads x 1 Visit = 90 Total Visits = 200 Monthly Visit Range Metric = 15-16 50

Metrics Metrics to evaluate major gift activity and results 1. Meetings: Intentional face-to-face meetings with major gift prospects. 2. Asks: Major gift proposals presented to prospects. 3. New gift commitments: number and dollar value closed. 4. Qualified Prospects: New major gift prospects qualified through discovery meetings. 5. Leads: New leads generated through referrals. 51

Prospect Management Meeting Agenda 1. Review solicitation progress on all Tier 1 (Solicitation) qualified prospects. 2. Review progress on selected Tier 2 (Cultivation) qualified prospects on track. 3. Discuss strategies on selected Tier 1 (Solicitation) qualified prospects submitted prior to meeting. 4. Review team s progress on discovery meeting goal. 5. Assign new qualified leads for Tier 4 (Discovery). 52

QUESTIONS and ANSWERS 53

Contact Us Two North Riverside Plaza, Suite 1030 Chicago, IL 60606 www.twbfundraising.com Phone: 312.222.0560 Don Souhrada Email: dsouhrada@twbfundraising.com Phone: 312.222.0560, ext. 232 3075 Highland Parkway, Suite 600 Downers Grove, IL 60515 www.advocategiving.org Phone: 630.929.6900 Doug Hutchings Email: douglas.hutchings@advocatehealth.com Phone: 630.929.6930 Find Us Both On 54