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Executive Summary
Rahul Bhosale In collaboration with Elif Koekcechen

Introduction
Fundraising is a vital part for non-profit organizations across the world. To serve their Constituents, organizations
greatly depend on the generosity of the public to continue
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. Successful planned donation program building is a
challenge, and worth the effort. So whats an organization to do? Avoid the common mistakes organizations
make, when attempting to secure planned gifts:
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Targeting the wrong prospects
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Sending the wrong appeal
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Asking too late
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Soliciting planned gift prospects for major gifts
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Many times, these common pitfalls lead to poor responses and ultimately deter organizations from future attempts
at developing a planned giving program. Too many organizations give up, inadvertently allowing them to miss a
major opportunity to strengthen the long-term viability of their organizations
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.

Objective
Use data mining to improve the number of donors from 5% out of 13 million records. Also to improve the
donation appeal program in order to reduce expenses of the program and increase the donation from average $13.

Results
The use of data mining helps to define new strategy for the organizations Fundraising Effectiveness
Project
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. Looking at the top 5 records, sorted by Predicted value ascending, we can say that the person who
has high income and wealth as well, have relatively higher possibility of being donor with significantly high
amount. But the person having either income or wealth or both low will have less possibility of donation.

Table 1: Future fundraising prediction result, Top 5 records sorted by predicted value ascending.
INCOME GENDER WEALTH AVGGIFT Predicted Class Prob. for 1 (success) Predicted Value
6 0 6 15.00 1 0.26 124.49
2 0 9 10.00 0 0.18 123.24
1 0 1 11.15 0 0.22 101.12
5 1 9 4.43 1 0.41 88.09

Table 2: Statistical comparison of previous year and predicted performance of fundraising
Fundraising F13 Future fund raising predictions

Total Records : 2,099
Males : 827
Females : 1,272


% Males : 39.4
%Females : 60.6

Total Records : 2,000
Males : 809
Females : 1,191


% Males : 40.5
%Females : 59.5

Total Donors : 539
Males : 198
Females : 341


% Males : 36.7
%Females : 63.3

Total Donors : 1,222
Males : 431
Females : 791


% Males : 35.3
%Females : 64.7

Total Amount :$7,195
Avg amount :$13.35

Total Amount :$18,940
Avg amount :$15.5

%hike (Amt) : 263%
%hike (Avg) : 116%


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From the statistics of the results, it can be seen that out of 2,000 records 1,222 are found to be possible
donors. About 64.73% females are predicted to be donor, higher than total female count of 59.6%. The total
predicted donation is $18,940 with average of $15.5
The statistics clarifies that females are more generous than male and have high probability of
contributing to organizations. In both, previous year records and future predictions, the percent of female
donors are approximately equal, 63.3% and 64.7% respectively, and noticeably higher than males.

Recommendations
Using data mining, organization can decide who to approach and mail. The selective persuasion strategy
results in low, including but not limited to direct mailing expenses, thereby high net donation amount. Also the
organization can solicit people based on other particular attributes about which they are most likely to donate. For
example,
When donors typically give? Do they respond to end-of-the-fiscal-year? [Behaviour]
Do they prefer to give at the end of the tax year? [Date and Time]
Do they respond to crisis' solicitations? What are their solicitation preferences? [Preferences]
Do they prefer direct mail, e-solicitations, or telephone calls? [Method]
How do they give? Do they give online, by check, or by credit card? [Mode]

With this knowledge you can segment your mass solicitations by time of year and solicitation method that will be
more successful and cost-effective to your budget based on the given donor
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. Also understanding how to ask for a
donation is critical. After identifying best prospects, for effective solicitations consider following tips:
Simple message ask should be clear, concise, and focused
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.
Solicitations on anniversary dates
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Adopt a segmented solicitation strategy send the best type of solicitation for each prospect
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.
Cultivate relationships with annual donors build ongoing relationships with annual donors
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.
Integrate staff activities encourage annual fund staff members to work with planned givers
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.

Caution
The data is powerful. However, it can also provide wrong directions. While trying to reach the goals of
efficiency (minimizing fundraising costs) and effectiveness (maximizing growth in giving) some might interpret
the data in a way that might lead them not to continue to approach certain segment of the database. We have to
take a step back sometimes and see if there is something more, than what our data is showing
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There is a growing body of literature that looks at philanthropic giving within communities of color and
how it differs in motivation and practice from the white majority (e.g.; Smith, Shue, Vest, & Villarreal, 1999;
Gow Petty, 2002; Gasman & Anderson-Thompkins, 2003). Understanding these differences and the fact that the
first principle of fundraising is that people give because they are asked,' before we write them off' we should
look to our strategies and see if we can engage these populations in a more culturally sensitive way
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.

Conclusion
Using data in the creation and implementation of the fundraising strategy is the centrepiece of the
Fundraising Effectiveness Project (FEP). By understanding the power of data, collecting it, and analyzing it, one
can reach the both of these Efficiency and Effectiveness. The use of data within fundraising allows "our strategy
[to be] grounded in facts, not assumptions"
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. Using data to implement strategy will never obsolete the traditional
development officer and their personal understanding and experiences, rather, the statisticians analytics will
always be needed to be interpreted by the development officers. Birkholz (2008, p. 210) reminds us that "it is
easier for fundraisers to be successful when they are armed with the knowledge of context and implementation
than it is for statisticians armed only with technology. [However,] when knowledge and technology come
together, the potential is limitless" (p. 210). In the end, using data does not take the "art" of advancement away, it
just adds the science.


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http://scholarworks.umass.edu/cgi/viewcontent.cgi?article=1021&context=gradconf_hospitality

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http://www.afpnet.org/ResourceCenter/ArticleDetail.cfm?ItemNumber=4572

http://www.olomon.com/research/Fundraising%20Analytics.pdf

https://www.blackbaud.com/files/resources/downloads/Book_CultivatingLifelongDonors.pdf

http://www.irs.gov/pub/irs-tege/eotopici03.pdf