prospect research in a campaign david lamb consultant target analytics
Post on 19-Dec-2015
217 Views
Preview:
TRANSCRIPT
Prospect Research in a Campaign
David Lamb
Consultant
Target Analytics
Agenda
Why do a campaign Feasibility study Campaign pyramid Risk analysis/prospect identification Prospect management
Why Do A Campaign?
Raises funds for featured objectives Motivates existing donors to increase their giving
and involvement Acquires new donors Generates visibility and excitement about the
organization’s mission If well run, post
campaign giving may remain above pre-campaign giving
Years
Peak Campaign Giving
Pre Campaign Giving
Post Campaign Giving
Gift
$
Campaign premium
Internal Readiness
Are the featured objectives for your campaign realistic?
Do you have the staff to research, solicit, process gifts, and steward donors?
Do you have (or can you get) the funding for a campaign?
Is your database up to snuff? Do you have an effective prospect management
system? Is your leadership (staff and board) committed to
seeing a campaign through?
External Readiness Do you have the donors to support a
campaign? Capacity Motivation Numbers
Is the case for the campaign compelling to your constituency and the community?
Are the environmental factors favorable? Economy Competition for gifts Public attitudes
Feasibility (or Planning) Study
Tests the case for support Is conducted by a credible, objective,
outside consultant Consists of series of interviews
Board and staff Key supporters Prospective major donors
Integrates all findings into an assessment Strengths and weaknesses Recommended goal Prognosis for success
Phases Of A Campaign
Typical total time frame for a comprehensive campaign is 7-10 years
Phase Research Issue
Pre-campaign, 1-2 years Identification and verification of top prospects
Quiet, 1-2 years Verification and profiling of top prospects; identification of mid-tier prospects
Public, 5-6 years Profiling of top prospects and mid-tier prospects
Consolidation, last two years
Identification, verification, and profiling second wave prospects
Campaign Pyramid You can get to your goal faster if you get a
few very large gifts and many smaller gifts Pyramid forces you to see the gift size
reality Time tested rule: 4 prospects for every 1
donor at the top levels of the pyramid 90/10 rule – some predict this is changing The pyramid you start with might not be the
pyramid you end with
Campaign Pyramid
Pivotal / Transformational
Principal
Leadership
Major / Special
Annual
Inverted Pyramid
Major /P
lanned
Major
Loyal Donors
Constituent Base
Planned
Post-Recession Pyramid
http://philanthropy.com/news/updates/8853/colleges-will-see-a-decline-in-megagifts-experts-predict
Recovery from the recession likely to be weak Fewer mega-gifts ($5MM+) than before the recession Pre-recession – 70% of campaign total came from $1MM+
donors Post-recession probability – 50% of campaign total will come
from $1MM+ donors Places increased pressure to find more mid-level major gift
prospects Pyramids of the future may be flatter Implications for prospect research: we need more of those
who are more difficult to research
Campaign Pyramid: $500MM
Source: http://www.blackbaud.com/resources/giftrange/giftcalc.aspx
Gift Range No. Gifts
required
No. Prospects
required Prospects identified
Prospects needed
Level Subtotal
Desired Cumulative Total
Desired Cumulative
percentage 50,000,000 1 4 4 0 $50,000,000 $50,000,000 10%
25,000,000 2 8 7 1 $50,000,000 $100,000,000 20%
12,500,000 5 20 17 3 $62,500,000 $162,500,000 33%
5,000,000 10 40 36 4 $50,000,000 $212,500,000 43%
2,500,000 20 80 84 0 $50,000,000 $262,500,000 53%
1,250,000 40 160 148 12 $50,000,000 $312,500,000 63%
750,000 60 240 213 27 $45,000,000 $357,500,000 72%
500,000 100 400 384 16 $50,000,000 $407,500,000 82%
250,000 125 500 646 0 $31,250,000 $438,750,000 88%
100,000 150 600 735 0 $15,000,000 $453,750,000 91%
50,000 200 800 822 0 $10,000,000 $463,750,000 93%
25,000 250 1000 1016 0 $6,250,000 $470,000,000 94%
Under $25,000 Many Many Many Many $30,000,000 $500,000,000 100%
Setting The Goals Top down:
Set the goal based on need and find the prospects to support it
Tends to be most aggressive and riskiest The easy road:
Set the goal based on projected base-level giving
Tends to be the easiest to achieve Bottom up:
Research the ability and interest of the prospect pool
Tends to balance risk vs. reward
Top Down – High Risk
Gift Range No. Gifts
required No. Prospects
required Prospects identified
Prospects needed
Level Subtotal
Desired Cumulative
Total Desired Cumulative
percentage 50,000,000 1 4 5 0 $50,000,000 $50,000,000 10%
25,000,000 2 8 7 1 $50,000,000 $100,000,000 20%
12,500,000 5 20 17 3 $62,500,000 $162,500,000 33%
5,000,000 10 40 35 5 $50,000,000 $212,500,000 43%
2,500,000 20 80 81 0 $50,000,000 $262,500,000 53%
1,250,000 40 160 148 12 $50,000,000 $312,500,000 63%
750,000 60 240 209 31 $45,000,000 $357,500,000 72%
500,000 100 400 359 41 $50,000,000 $407,500,000 82%
250,000 125 500 504 0 $31,250,000 $438,750,000 88%
100,000 150 600 629 0 $15,000,000 $453,750,000 91%
50,000 200 800 725 75 $10,000,000 $463,750,000 93%
25,000 250 1000 965 35 $6,250,000 $470,000,000 94%
Under $25,000 Many Many Many Many $30,000,000 $500,000,000 100%
Prospect research must identify 203 additional prospects who can give over $25K
Easy Road – Low Risk
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
$20,000,000
gift total
gift total
Average increase in giving since 2001 is about 4% per year
Project that into the future for a seven year campaign of $110 million over 7 years
Risk Adjusted Pyramid Risk adjusted pyramid takes into account the
likelihood to give at particular levels Typical 4:1 prospect : donor ratio has a flaw
Not all prospects have the same likelihood to give Your best prospects may be closely tied to your org
already For your best prospects, the proper ratio may be more like
2:1 or 3:1 (low risk) For other prospects, the proper ratio may be in the 4:1 or
5:1 range (medium risk) Even some prospects with little current contact (but who
are on your database) may make major gifts – 10:1 (high risk)
It is not possible to precisely assign probability of a gift, but you can put people into groups of similar propensity
Hypothetical Example
8 prospects identified at the $25MM level 2 sit on the board, are personally committed
to the org’s mission, and have made major gifts in the past
1 has been a volunteer and a past major gift donor
3 are an alumni with modest but regular giving to the annual fund
2 are friends who have never made a gift Do they all have an equivalent likelihood to
give?
High Likelihood - Low Risk GroupHigh likelihood prospect:donor ratio = 2:1Example: • 2 prospects identified at $25 MM level• As a group, their potential is $100 MM• 2:1 ratio suggests that only half of their group potential will be realized
Gift Range Prospects Identified Expected Income
$50,000,000 2 $50,000,000$25,000,000 1 $12,500,000$12,500,000 2 $12,500,000
$5,000,000 5 $12,500,000$2,500,000 7 $8,750,000$1,250,000 15 $9,375,000
$750,000 32 $12,000,000$500,000 50 $12,500,000$250,000 69 $8,625,000$100,000 75 $3,750,000
$50,000 124 $3,100,000$25,000 201 $2,512,500
Total 583 $148,112,500
Moderate Likelihood – Medium Risk Group
Moderate Likelihood prospect:donor ratio = 4:1
Gift Range Prospects Identified Expected Income
$50,000,000 2 $25,000,000$25,000,000 4 $25,000,000$12,500,000 6 $18,750,000
$5,000,000 15 $18,750,000$2,500,000 55 $34,375,000$1,250,000 88 $27,500,000
$750,000 123 $23,062,500$500,000 211 $26,375,000$250,000 276 $17,250,000$100,000 319 $7,975,000
$50,000 326 $4,075,000$25,000 414 $2,587,500
Total 1839 $230,700,000
Low Likelihood – High Risk Group
Low likelihood prospect:donor ratio = 10:1
Gift Range Prospects Identified Expected Income
$50,000,000 1 $5,000,000$25,000,000 2 $5,000,000$12,500,000 9 $11,250,000
$5,000,000 15 $7,500,000$2,500,000 19 $4,750,000$1,250,000 45 $5,625,000
$750,000 54 $4,050,000$500,000 98 $4,900,000$250,000 159 $3,975,000$100,000 235 $2,350,000
$50,000 275 $1,375,000$25,000 350 $875,000
10 1262 $56,650,000
Combined Risk-Adjusted Tables
Anticipated MG Gift Receipts
High Likelihood $148,112,500
Moderate Likelihood $230,700,000
Low Likelihood $56,650,000
$435,462,500
Combined Risk-Adjusted Tables
Gift Range No. Gifts required
Standard Ratio
Prospects Identified
Desired Income
Desired cumulative total
Risk Adjusted Expected Income
Risk Adjusted Expected Cumulative total
Difference From Desired Per Level
Prospects Needed (Donors x 4)
50,000,000 1 4 5 $50,000,000 $50,000,000 $80,000,000 $80,000,000 $30,000,000 025,000,000 2 8 7 $50,000,000 $100,000,000 $42,500,000 $122,500,000 ($7,500,000) 112,500,000 5 20 17 $62,500,000 $162,500,000 $42,500,000 $165,000,000 ($20,000,000) 6
5,000,000 10 40 35 $50,000,000 $212,500,000 $38,750,000 $203,750,000 ($11,250,000) 92,500,000 20 80 81 $50,000,000 $262,500,000 $47,875,000 $251,625,000 ($2,125,000) 31,250,000 40 160 148 $50,000,000 $312,500,000 $42,500,000 $294,125,000 ($7,500,000) 24
750,000 60 240 209 $45,000,000 $357,500,000 $39,112,500 $333,237,500 ($5,887,500) 31500,000 100 400 359 $50,000,000 $407,500,000 $43,775,000 $377,012,500 ($6,225,000) 50250,000 125 500 504 $31,250,000 $438,750,000 $29,850,000 $406,862,500 ($1,400,000) 22100,000 150 600 629 $15,000,000 $453,750,000 $14,075,000 $420,937,500 ($925,000) 37
50,000 200 800 725 $10,000,000 $463,750,000 $8,550,000 $429,487,500 ($1,450,000) 11625,000 250 1000 965 $6,250,000 $470,000,000 $5,975,000 $435,462,500 ($275,000) 44
< 25000 Many Many Many Many Many Many$500,000,000 $435,462,500 ($34,537,500) 343
The Middle Challenge
People capable of giving $25K-$100K may have very few discoverable indicators of wealth
A filter or screening of the database may help surface these people
Look for: High incomes Titles Gifts to other orgs Expensive or income-producing property
Major, special and leadership gifts
Assessing Risk/Prospect ID
RFM Analysis Age Constituent characteristics Statistical models
Generic Custom
List matching (aka wealth screening)
RFM Analysis Recency – when was the most recent gift?
Score 0 if more than 3 years ago Score 1 if 3 years ago Score 2 if 2 years ago Score 3 if 1 year ago or less
Frequency – how consistently has the donor given? Score 0 if none of the last three years Score 1 if only one of the last three years Score 2 if only two of the last three years Score 3 if each of the last three years
Monetary Value (must be customized) Score 0 of largest gift is $0 Score 1 if largest gift is $1-$999 Score 2 if largest gift is $1,000 – $4,999 Score 3 if largest gift is >= $5,0000
RFM Analysis If a prospect scores >= 8
Top priority for additional research to estimate capacity
Consider the person a high likelihood prospect If a prospect scores 4 – 7
Second priority for research to estimate capacity Consider the person a moderate likelihood
prospect If a prospect scores 0-3
Do not do additional research unless specific indicators come to light
Consider the person a low likelihood prospect
Filtering On Age Life Stage Theory: constituents have
different propensities to give depending on age Peak earning years for many professionals
begins in the 40s Increases through the 60s Retirement age and older may be a threshold for
even greater giving for the very wealthy Focusing on age risks excluding some
successful younger people
Filtering On Constituent Characteristics
Alumni/program participants may be have a built-in propensity
On the other hand… Some alumni may have minimal affiliation Some of your best donors may be community
partners or friends
Other Constituent Characteristics
Degree Major Current/former
parent Grateful patient Board member Volunteer Subscriber Age
Ticket buyer Event participation Requests for
information Number or quality
of communications Number of
affiliations RFM
Statistical Models What size gift is “major” Must have at least 200 examples of gifts in the last
year at a particular level for valid statistics Don’t include gifts from corps or founds
Gift Level Gift Count % of totalCumulative Count Cumulative %
0 Dollars 109,135 90.85 109,135 90.85
1-49 Dollars 2,497 2.08 111,632 92.93
50-99 Dollars 1,902 1.58 113,534 94.52
100-249 Dollars 3,867 3.22 117,401 97.73
250-499 Dollars 1,153 0.96 118,554 98.69
500-999 Dollars 728 0.61 119,282 99.30
1000-2499 Dollars 582 0.48 119,864 99.79
2500-4999 Dollars 113 0.09 119,977 99.88
5000-9999 Dollars 72 0.06 120,049 99.94
10000+ Dollars 73 0.06 120,122 100.00
One year gift table
Constructing the models Do-it-yourself
Must invest in software like SPSS or SAS Must invest in statistical education Must invest in data sources if you plan to use info beyond
your database Suggested technique: regression analysis Variables with strong correlation become included in the
model Watch out for false or misleading correlations!
Hire a consultant/vendor Must depend on the expertise and experience of another Consultant/vendor may have ready access to marketing
and geo-demographic data
Wealth screening
An automated process that matches the names on your database to those on other databases
Simple minded, but fast Information returned requires
verification
Prospect Identification
Ideal approach is to pre-screen with a model, then go deeper with a list matching process on top scoring prospects
On a pre-screened database, 1 in 10 may end up looking like major gift prospects.
If you need 4,000 prospects, screen 40,000 constituents
Campaign Staffing Staff needs are based on campaign goal Goal controls number of prospects and donors
needed If each major gift prospect must be contacted at
least 2x/year, and there are about 240 working days in a year, an MGO must contact two prospects/day to carry a portfolio of 120 prospects
Ideal portfolio will be between 75 and 150 prospects per MGO
Portfolio size is influenced by Ask amount Geography Job responsibilities
Campaign Staffing To estimate number of MGOs needed for
the campaign Calculate the number of prospects who must be
contacted Divide that number by 200 Only 100 of these will be assigned at any one
time The first prospects to be assigned will be the
low-risk prospects As prospects make gifts or are disqualified,
portfolio will be re-supplied from verified prospects in the medium and high risk groups
Ratio of MGOs to researchers should be 1:4 or 1:5 in a campaign context
Campaign Staffing
Goal = $500 million Prospects above $25,000 to be contacted:
4,000 (rounded up) Major gift officers needed:
4,000/200 = 20 Researchers needed:
~20 MGOs/5 ≈ 4 researchers – more if many prospects must be qualified
This does not include staff time for prospect management
Research In A Campaign Filter the database to surface top
prospects for research and contact Assess capacity and inclination of top
prospects Brief profiles at identification Full profiles as solicitation nears
Rationally place prospects on the pyramid by risk and capacity
Supply verified prospects to MGOs
Research In A Campaign
Refine understanding of risk and capacity through contact and further research
Re-evaluate pyramid position of each prospect
Match institutional needs to the prospect’s interests
Manage prospects through the pipeline
References Fundraising Feasibility Studies,
http://www.nps.gov/partnerships/fundraising_feas_study.htm The Strategic Role of Quantitative Research in Campaign
Planning, http://www.martsandlundy.com/dl.php?filename=pdf/special_reports/Quant_Research.pdf
A Kaleidoscope Of Prospect Development, Bobbie J. Strand, CASE Books, 2008
top related