Ann Charles Watts, CFRE Organizational Development Consultant—Resource Development

Ann Charles Watts, CFREOrganizational Development Consultant—Resource Development

Habitat for Humanity International800-422-4828 x [email protected]

DEALING WITH

ANALYTICS

According to the Indiana University Lilly Family School of Philanthropy:

Efficiency in fundraising means the lowest cost for the highest return (e.g. spending less in the current year than in the past year to renew donors for the annual fund at higher average gift levels.)

Effectiveness in fundraising means spending more money to bring in a proportionately greater return on each dollar invested in fundraising.

Fundraising goal $2,300,000 Budget $545,000

Results

Funds raised $2,209,145 96% of goalBudget spent $ 562,207 103% of budgetGoal shortfall $ 90,855 4.1%Budget overspent $ 17,207 3.2%

Are these results acceptable?Are they efficient?

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Fundraising Results Analysis #1

Greenfield, J.M. “Fundraising Performance Evaluation” Preconference, 2013 Affiliate Conference, Atlanta, Georgia, March 2013

Fundraising goal $2,300,000 Budget $545,000

Results

Net revenue $1,646,938Fundraising cost $0.25Return on expense 293%

Are these results acceptable?Are they efficient?

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Fundraising Results Analysis #2

Greenfield, J.M. “Fundraising Performance Evaluation” Preconference, 2013 Affiliate Conference, Atlanta, Georgia, March 2013

#1: Spending $0.25/$1.00 raised to net $1,646,938 at a return on expense of 293% in 12 months is

efficient.#2: Failing to make goal is not a failure of fundraising

effectiveness.#3: Exceeding budget is not a failure of efficiency.#4: Fundraising results are not about budget analysis alone.

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Lessons Learned

Therefore: What are the performance measures that address both effectiveness and efficiency?

What are the guidelines and standards to be used in results analysis to demonstrate an acceptable level of performance?

Greenfield, J.M. “Fundraising Performance Evaluation” Preconference, 2013 Affiliate Conference, Atlanta, Georgia, March 2013

Develop Case

Prospect Research & Identification

Cultivate & Consult

Solicit

Steward

Raise Awareness

Basic Fundraising Cycle

Setting the GoalA = How much it will cost to realize the vision set forth in your strategic planB = Your mortgages receivable, ReStore income, and all other sources of income besides fundraising

A – B = Your Fundraising Goal

Universe of Prospects

First-time Donors

Renewed/Upgraded Donors

Major Donors

Capital Campaign Donors

Planned Gift Donors

Donor Pyramid

Develop Case

Prospect Research & Identification

Cultivate & Consult

Solicit

Steward

Raise Awareness

Universe of ProspectsFirst-time Donors

Renewed/Upgraded Donors

Major Donors

Capital Campaign Donors

Planned Gift Donors

Our Worst EnemiesAttrition & Stagnation

How to prevent them?Give donors what they want:

• Prompt, personalized acknowledgement of their gifts• Confirmation that their gifts have been set to work as intended

• Measurable results on their gifts at work prior to being asked for another contribution

- Penelope Burk

Calculating your Retention Rate

If your affiliate has a clear definition of how long it takes before a donor is considered lapsed, use that unit of measure. If not, use 12 months.

A. How many donors did your have between October 1, 2011 and September 30, 2012?

B. How many donors did you have between October 1, 2012 and September 30, 2013?

C. How many donors in group A were also in group B?

(C ÷ A) x 100 = Your Retention Rate

(industry minimum standard is 50%)

Improving retention rates by 10% can improve revenue generation by:

50%

100%

150%

200%

“Improving Donor Retention by Just 10% Can Double the Lifetime Value of your Donor Database!”

Source: Adrian Sargeant, Ph.D., Bloomerang: Donor Retention Math Made Simple

What are you doing to retain your donors?

• It generally costs between $1.20 and $1.50 per $1.00 raised to acquire a new donor.

• Gifts from established donors, on average, are four to five times greater than those of

new donors.

Statistics

Direct Mail (acquisition) $1.25 to $1.50 per $1.00 raisedDirect Mail (renewal) $0.20 to $0.25 per $1.00 raisedMembership programs $0.20 to $0.30 per $1.00 raisedBenefit events $0.50 per $1.00 raised

(gross revenue and direct costs only)Donor clubs/support groups $0.20 to $0.30 per $1.00 raisedVolunteer-led solicitations $0.10 to $0.20 per $1.00 raisedCorporate solicitations $0.20 per $1.00 raisedFoundation solicitations $0.20 per $1.00 raisedCapital campaigns $0.10 to $0.20 per $1.00 raisedPlanned giving programs $0.20 to $0.30 per $1.00 raised

Source: J.M. Greenfield, “Fundraising Responsibilities of Nonprofit Boards.” 2nd ed. BoardSource, 2009, p. 54.

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Reasonable Cost Guidelines for Solicitation Methods(based on three or more years of continuous activity)

Your Turn!

Break into teams of four or five and discuss the case study.

What does your team recommend?

Ann Charles Watts, CFREOrganizational Development Consultant—Resource Development

Habitat for Humanity International800-422-4828 x [email protected]

DEALING WITH

ANALYTICS