1. Using Analytics for Fundraising
Michael Milton
July 22, 2010
Presented for the Nonprofit Roundtable of
Greater Washington

2. A great nonprofit:
Youth Haven

3. Let’s define
“analytics”

4. Analytics is...
studying key metrics, and
using them to make decisions

5. My favorite metric:
% of CEO time in front
of prospects

6. Another favorite metric:
Churned dollars
How much money did you receive from this year’s LYBUNTs last year?

7. Yet another cool metric:
Client emergency
contact conversion rate

8. A more specific version of
that last one:
Conversion rate for
parents of current
students

9. A dubious metric:
Fundraising efficiency
From charitynavigator.com
It's easy to calculate!

10. Analytics is harder for
fundraisers

11. For-profits have a
structure and reason for
being that make it easier
to select metrics

12. Shareholders
Shareholders
want
dividends...
The corporation

13. Shareholders
controls
...so they bring
on a board Board
to ensure
that they get
dividends...
The corporation

14. ...and the controls
Shareholders
board hires
a CEO to controls
Board
manage to
company CEO
to create
dividends...
The corporation

15. ...and the controls
Shareholders
CEO hires
salespeople, controls
Board
who create
controls
the revenue CEO
that leads to
dividends. Salespeople
The corporation

16. Shareholders
controls
The sales
folks select Board
the metrics controls
that describe controls
CEO
revenue
creation.
Salespeople
The corporation

17. Now let's look
at nonprofits

18. Beneficiaries
At the top,
we have
beneficiaries
rather than
shareholders
The nonprofit

19. They don't
actually control
the nonprofit
Beneficiaries
The nonprofit

20. Their payoffs are
more vague than
dividends
Beneficiaries
(generally
The nonprofit
speaking)

21. The board
wants to help
Board the beneficiaries
infuen
ces
Beneficiaries
The nonprofit

22. But there’s no guarantee
that they will,
or that they’ll realize it
if they don’t

23. The board’s ideas
about what helps
aren’t necessarily
the beneficiaries’,
and neither are
necessarily right.

24. Nonprofits can pursue
evidence-based management
Check out givewell.org

25. The board hires
the CEO to help
Board the beneficiaries
infuen
controls ces
Beneficiaries
CEO
The nonprofit

26. You want to help,
too!
Board
infuen
controls ces
Beneficiaries
controls
CEO
Fundraisers
The nonprofit

27. In theory, the
CEO is your boss
Board
infuen
controls ces
Beneficiaries
controls
CEO
Fundraisers
The nonprofit

28. In practice,
you’ve got lots of
Board influences
infuen
controls in f u e n c e s ces
e s
e nc Beneficiaries
controls in fu
CEO ce s
in f ue n
Volunteers
in f u e n c e s
Fundraisers infuences Members
The nonprofit
Donors

29. Revenue is your goal,
which by itself is
unambiguous

30. But a lot of times
it’s not clear how
the revenue that you
create translates into
social benefits

31. And we haven’t even started
to list the revenue streams
Membership Email
Gov grants Major
Mail
Planned
Phone
Special events
Big grants
Small grants
Web
Capital/endowment

32. “Revenue” won’t be of much
help tactically...
you need illuminating metrics

33. But it’s hard to pick the
right metrics in such a
complex environment
Of course, there are exceptions.

34. So a lot of development
directors play to this complexity
rather than develop analytics
Membership Email
Gov grants Major
Mail
Planned
Phone
Special events
Big grants
Small grants
Web
Capital/endowment

35. What if managing the
complexity is your job?
Maybe then analytics isn’t
such a big deal

36. It is, because if you have
the analytics you can
control the conversation

37. Control means
focus and results

38. Focus problem:
A board member thinks
she knows what the donor
constituency wants

39. Focus problem:
A volunteer thinks his pet
project is the most important
thing in the world

40. Focus problem:
The CEO is paying attention
to the wrong things

41. Getting results right
is knowing when you’ve
succeeded.

42. How do you
“do analytics”?
You run tests and then
inspect your metrics.

43. The importance of controlled,
randomized experiments
The vascular surgeon who had no controls, from
Edward Tufte's Beautiful Evidence
Buy all his books at
www.edwardtufte.com

44. A useful test
demands you to
pick the right
metrics

45. Capital One… conducts more than
30,000 experiments a year, with
different interest rates, direct-mail
packaging, and other variables. Its
goal is to maximize the likelihood
both that potential customers will
sign up for credit cards and that
they will pay back Capital One.
— "Competing on Analytics",
Harvard Business Review,
January 2006
The book

46. Something easy to test:
Fundraising letters

47. Web analytics is
the cutting edge
You need to learn Google Analytics.

48. Google Analytics knows
where people come from
and whether they convert
...so it can show you how social
network activity turns into
fundraising dollars.

49. Monster.com tests button
Here are two of the 128 permutations they tested with Offermatica (now Omniture).
Customers spent 8.31% more on average when presented with these options.

50. The fundraising data
infrastructure
Collection
Social networks
Web analytics
Operations
Direct Marketing
Personal contact
Consolidation
Munging
Integration
Analysis
Selecting the right metrics
Running good tests
Making it actionable