The Science of Fundraising: How Nonprofits Use Analytics

3 06 2011

Today’s guest blogger is Joshua Birkholz, author of “Fundraising Analytics: Using Data to Guide Strategy”.  Josh is a leader in the analytics field and is passionate about its applications for fundraising.

Only 10 short years ago, the word, “analytics,” was barely in the vocabulary.  You could count the fundraising analytics professionals on one hand.  Sure we had heard of data mining and seen demographic clusters in the early days of screening.  But, no one would have guessed that nonprofits would be building their own identification models using their own data.

Today, in-house fundraising analytics professionals number in the hundreds.  Nonprofits are using predictive models to:

  • Identify new major or planned gift prospects
  • Risk-adjust their campaign gift pyramids
  • Determine ask amounts for direct marketing
  • Segment mailing and event populations

Nonprofits are using descriptive analytics and visualization for:

  • Conducting complex portfolio analysis
  • Forecasting and simulating fundraising production
  • Evaluating regional gift officer allocation
  • Making really pretty charts and graphs (useful ones at that)

 This next decade will see some of the most amazing advances in analytics.  With the ubiquitous nature of prospect management coding springing from the metrics-driven ‘90s and ‘00s, nonprofits will be able to predict the optimal cultivation strategy for new major donor prospects.  By connecting analytics to the ever-growing field of fundraising talent management, we will be able to predict top performers at the hiring stage.  Decision science will find its way into all areas of campaigning, strategic planning, donor relations, and social media. 

 

A special thanks to Josh for his insights and the interesting perspective of the infograph. Today’s professional fundraisers must master both the science of fundraising and the art of fundraising. I offer this for further thought, the science alone is not a magic bullet, but when deployed in a thoughtful way — the impact on philanthropy can be significant. Have a great week!

– Mark

 

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