For the past few years we’ve worked closely with Higher Education Institutions on applying data analytics to optimize student admissions, financial aid, student retention and academic outcomes. We recognized from the onset that this student “lifecycle” has a straight progression to an alumni lifecycle which has a critical goal of fostering school loyalty and giving. So, for the past two months we’ve been meeting with fundraising leadership at different Universities and Medical Campuses in the North-East USA to discuss how approaches to data science can transform the tactical challenges of fundraising.
Why have I undertaken this initiative you might ask? Well, to be blunt, because there is an enormous opportunity for improvement. Fundraising is hard-wired into numerous operating budgets. Be it universities, health services, community services and numerous other types of institutions, hiring more Development Officers (as fundraisers tend to be titled) or launching more campaigns cannot be the only solutions to the ever-increasing revenue demands. The numbers involved are staggering: by one account, in 2016, total nationwide fundraising was nearly $400bn, with 80% contributed by individuals (as opposed to corporations) – hat’s off to the truly incredible generosity of the American public.
That’s one answer as to “why”. The other is that our work in the field has lead us to recognize the many parallels fundraising has to sales; so why not apply our data driven marketing and sales expertise to the disciplines of fundraising?
I’ll start by exploring the parallels. In a nutshell, this is what successful sales looks like: (1) Identify your targets and how they match with what you have to offer, (2) market to their needs and interests, (3) continuously qualify out early those that are not going to buy (moving the better ones to a nurture program), (4) systematically prioritize and develop the rest, and (5) always be closing. And it’s no surprise to find that fundraising organizations strive to follow the same process.
Let’s go on. What about top sales people? They are adept at tuning into their prospect’s goals and their personality. Through discourse they dissect how and when a favorable decision can be achieved and for what amount. They identify what other external and internal players have influence or authority over the decision and how to sway them. Lastly, they optimize internal and external resources to help their sales agenda, and they network and grow the connections around their prospects. They are constantly doing all these things for each prospect. Time is their enemy and they work all the angles to beat it. Important as all the organizing and all the planning is, it is not sufficient – the people skills, the art of the sale, is where the magic always must happen. Finally, in fundraising just as in sales, closing the “large deals” is a long sales cycle requiring a high touch carefully crafted process
No surprise that we find that top Development Officers have these same sales traits. So, the process, the activities, and the skills of fundraising are near identical to sales. What about the targets, the “customer”? In the commercial world we have B2B customers where you are selling to a corporate individual tasked with achieving the corporation’s wants; or you have B2C customers where you are selling to a consumer individual with their own personal wants. And it’s no different in the world of fundraising, where money is solicited from corporate donors or from individual donors. In another striking economic parallel, in the USA, two-thirds of the economy is consumer driven spending, in fundraising, four-fifths of donations is individual driven giving.
I would be remiss omitting the significant differences. For one, the sales psychology of what is being “sold” is wholly different. For another, fundraising requires an elaborate (and expensive) recognition element that occurs after the transaction is complete and is “sold” as part of “the deal”. This recognition process is of utmost importance for establishing “repeat customers”. Just like sales, winning a new customer is awfully hard work, the bigger payback is them becoming a loyal repeat customer.
All of this lends tremendous weight to the assertion that the evolving disciplines of data (science) driven sales and marketing must be ripe for application in the world of fundraising. Data science comes into play as the great multiplier. Done right, it can increase fundraising results by 20%, 40%, maybe even double. It’s possible by bringing significant leverage to all aspects of the process – who best to target, how best to “get” to them, what the optimal engagement steps are, even suggest when and how much to ask – the same objectives we are continuously optimizing in the world of data driven sales and marketing.
Now returning to our conversations with university fundraising leaders (who are generally referred to as the Directors/VPs of Advancement), here are some key themes that surfaced:
1. We are only tapping a tiny fraction – maybe 10% – of our donor pool, we need smarter ways to uncover and approach the hidden donors
2. We need to accelerate the “ask” process and move proposals along sooner
3. We need to target and elevate new leadership/principal donors more effectively
This is very strong alignment with our data science impact statement. Perhaps not surprising, but nevertheless good to hear.
We have constructed our fundraising data science approach around four key areas:
In the next blog I will elaborate on each of these areas, with examples of the data involved, the analytical concepts to be applied, and the impact they have to the fundraising process.
© Corporate Technologies, Inc. | Privacy & Legal