Major Gift Fundraising: How Top Fundraisers Forecast Fundraising Income
Forecasting fundraising income accurately is important in hitting your major gift fundraising goals. WealthEngine’s Senior Client Engagement Manager, Eric White, shares how top fundraisers use data modeling to predict major gifts with extraordinary accuracy, including predicting donor likelihood, the right “ask” amount, and donor lifetime value.
Analyzing Your Screening Data to Understand Major Gift Donors
Major Gifts Officers often feel pressure to convert prospects to donors within short lead times. Yet, most development teams know that lead time can sometimes be as long as 24-36 months.
Major gift fundraising is about the quality of prospects and not the quantity. Fundraisers need reliable prospect research to develop a reliable, high-quality prospect list. It is in fact data that makes prospect research more reliable.
WealthEngine’s WE Analyze solution enables you to understand what makes your audience unique. Moreover, analyzing your screening data through WE Analyze provides you a 360-degree view of your donor base.
WE Analyze can create a descriptive look-alike profile. Knowing what makes your audience unique through this profile helps you make your communications more engaging.
For instance, let’s say your nonprofit is hosting an event in LA with 500 confirmed attendees. Running the RSVP list through WE Analyze can reveal that 70% of them are married. Further, it can reveal that 13% love antiques and 45% support children’s causes. This empowers you to tailor your major gift fundraising strategy. You can now approach the right major gift donors with relevant contexts.
In one such example, a WealthEngine client was looking for a sponsor for their fundraising event. Through WE Analyze, they realized that a majority of their attendees owned Mercedes Benz cars. They were also in the market for a new car. This created a great opportunity for them to approach BMW for sponsorship. For BMW, it was an opportunity to reach people who were primed for purchase.
Data Modeling for Predictive Major Gift Fundraising
When it comes to major gift fundraising, you can go beyond descriptive models into actual predictive models. Predictive prospecting can be a data-driven way for you to ensure that you target the right prospects.
Modeling uses statistical analysis that relies on a custom formula. The formula is specific to your organization and helps answer a specific question. Wealth models are predictive because they are built on strong indicators of major gift giving. Examples of indicators are the number of events attended, gift capacity, the existence of a family foundation, etc.
Indicators vary by organization. For instance, let’s say your organization has found that a majority of major gift donors are all concentrated in California. You could also find that they are all pet owners and have college degrees. These would all be categorical data points that come from your database. These categorical points can be given a numerical value.
Therefore, the model would consider this information and build a formula specifically for your organization. Further, it can specifically focus on your nonprofit’s major gifts fundraising.
In the instance above, zip codes in California, college degrees and pet ownership will all bear greater impact in the formula. The formula then generates a score by calculating the weight of all these characteristics. This means that you can now score your entire donor base against the formula. Anyone with a high score is a top prospect.
Automating Your Major Gifts Forecast
The model will actually score your entire database for you. Further, it will divide your database into 10 equal deciles. This means that you can already see who your top 10% of prospects are. Decile 1 represents your top 10% of prospects, deciles 1 and 2, your top 20% and so on.
Now your major gifts fundraising has been prioritized for you. The probabilistic indicator within the model tells you who is most likely to donate. This is not just indicative of major gift giving. It is indicative of major gift giving to your nonprofit.
In one instance, a WealthEngine client saw that their capital campaign had stalled. The organization, a higher ed institution decided to use modeling to boost its major gift fundraising. Their custom model divided their database into 10 deciles in order of likelihood of giving. Their major gifts officer then decided to optimize their portfolio with prospects taken directly from the model.
After the campaign, the major gifts officer called us to let us know that they saw an 86% conversion rate by using the model. This means that 86% of the prospects addressed by the campaign said yes to giving.
You can automate major gift fundraising further through the use of API. Through API integration, you can score everyone that walks through the door. This can happen in real-time. Any new prospects can be scored against your major gift model and you can immediately receive an alert.
Reducing Lead Times Through Donor Models
Data models for major gift fundraising automate prospect research. Additionally, they go a step further and prioritize your prospects in order of likelihood. You may already be using WealthEngine’s Propensity to Give (P2G) score to prioritize and segment your donor base. It is important to note that the P2G score is a strong indicator of giving. However, it is not an indicator of giving to your nonprofit specifically.
The model generates results and organizes your donor base in a way that focuses on top prospects for you specifically. For instance, Bill Gates is an obvious P2G 1 donor. This doesn’t mean that he is likely to give to every cause. The model may identify somebody with a P2G 2 or 3, but the difference is that they are likely to give a major gift to your cause. This is because the formula in the model was built specifically for you.
When you focus your major gifts fundraising on such a targeted set of prospects, lead time can be reduced significantly. In one instance, a WealthEngine client was able to start having meaningful conversations with 20% of their top prospects about gifts in the $100,000 range. The remarkable thing about this story is that it only took them two months to identify these top prospects.
Another interesting point about this story is that all prospects identified in their top segment were ones who had never given to the organization before. This means that their top segment had been overlooked by the nonprofit before modeling.
Forecasting Fundraising Income
As we’ve established, WealthEngine’s data model automatically identifies your best prospects. Further, it prioritizes them in order of major gift capacity and propensity. This means that you can assign prospects within these deciles to your major gift officers. Knowing their lifestyle, interests, and affinities also helps officers approach them with relevant messaging. Gift capacity ratings and wealth scores give you an idea of the appropriate ‘ask’ for each prospect.
You can use let’s say the top 3 deciles or the top 30% of your donor base for your major gift fundraising. This means for the next 12 months, your officers will know who to target. Since deciles are organized based on strong indicators of giving, you can also predict giving amounts based on the number of prospects targeted at each gift capacity bracket.
Eric confirms that the data in a model can stay relevant for as long as 12 months. After this, you should run a fresh model to get the most up to date information for your major gift officers. Since prospect life stages are changing- inheritance, stock value, real estate ownership can all change over the course of 12 months. Refreshing your model to see what formula is most effective for your organization will help set you up for your next 12-month period.
See how a data model can help forecast your next 12 months of major gift fundraising. Model your data now.