Data Sense

Prospect Pool Part II

Back in November I mentioned the importance of cleaning up your existing prospect pool. So, now that you have deactivated those who are not really prospects and have identified those with true affinity, what is next? Now may be the time to take on a database screening.  Screening can mean different things to different people. For some it means finding wealth, for others it means determining who is likely to give and at what level.

Wealth screening is also known as “list matching.”  Names from your database are “screened” against names in external databases to find matches. The matches then return financial, biographical and philanthropic giving information. A score, indicating the reliability of the match, is also returned so that you can be sure that your John Brown is the same John Brown with the 10,000 shares of stock in XYZ company. If the screening company also provides information on constituents’ gifts to other organizations, you may get some indication of philanthropic intent.

Data modeling also uses lists but not for one-on-one matching for wealth.  At a very basic level, it applies mathematical formulas to existing statistical information such as the U.S. Census, credit reports, and IRS giving data to predict giving among groups of people. A group might just be a zipcode or a city or state. Data modeling can also incorporate information about your constituents to make it more meaningful. Sometimes a wealth screening is performed as part of this more tailored approach. A score, indicating whether the prospect is a major gift or an annual fund prospect, is returned for each of the names screened.  Finally, there is a third level of data modeling that involves a customized model based on the characteristics of your database and donor pool. This model is considered by many to be the most accurate but it is also the most expensive.

Which of the screening/modeling methods is best for your organization?  We’ll try to provide some tools to help you reach that decision in an upcoming blog.

Will You Be Ready? Part I—Your Prospect Pool

When the economy tanked, many non-profit organizations postponed capital campaigns or put existing ones on hold. Activity remained slow as fund raisers and board members took a wait and see posture.  At some point we will have a recognizable recovery and when that occurs, donor confidence will return. Have you been taking steps to be prepared for the recovery?  Downtimes are great times to examine and reevaluate your prospect pool. Who has stayed loyal during the tough financial times? Remember that giving is only one indicator of loyalty. Consider who has stayed in contact, come to events, and continued to volunteer. Take a look at your prospect ratings and determine if your affinity ratings should be adjusted and then consider adjusting your cultivation plans.  It will be well worth the effort.

How Many Gumballs?

Have you ever entered one of those “How Many Gumballs In the Jar” contests at the mall? You stare at the jar, drawn by the colorful orbs and the chance to win big. You start counting, maybe apply some multiplier, and then take a wild guess. You have nothing to lose. You have much to lose, however, if you apply the same guesstimate process to determining how many prospects you need to reach your campaign goal.

Before beginning any campaign, whether it is capital or annual, you will want to know how many gifts you need, at what levels, to reach that goal. Then you can estimate, not guesstimate, how many prospects are needed. How? A gift chart. The chart helps you see how many gifts are needed at each level to reach your goal, and how many prospects are needed. You can then make adjustments to the chart based on the make-up of your current prospect pool. Uh, oh. Prospect pool. Yes, you will need to be knowledgeable about your current donor and prospect pool—but that is another blog topic.

So how do you start?  Google “gift range calculator” and the results will lead you to free tools. Blackbaud has one and so do several large consulting firms. You plug in your goal and the chart fills in. You can also find formulas in any number of fundraising publications. Remember, though, that the chart is just a starting point—you need to make adjustments based on your prospect pipeline. You may discover that your goal is too ambitious or maybe (hopefully!) not ambitious enough. Adjustments will also be necessary if the chart is for an annual campaign as opposed to a capital campaign.  According to The Jossey-Bass Handbook of Nonprofit Leadership and Management, 2nd ed. by Robert Herman and Associates, the two have different percentages at the top of the chart. The top gift range in a capital campaign may be anywhere from 10% to 25% of goal. In an annual campaign that top range is likely to be closer to 5% of goal. There will be more gifts at the lower levels and fewer at the top.

Gift range charts are not an exact science but they are a great tool. One other thing to think about—are there fewer blue gumballs than any other color? Chew on that.