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The topics discussed here grow out of the bread-and-butter issues that confront my consulting and software clients on a daily basis. We'll talk about prosaic stuff like Membership Management, Meetings and Events Management and Fundraising, broader ideas like security and software project management, and the social, cultural, and organizational issues that impact IT decision-making.

Sunday, May 14, 2006

RearView Fundraising

Every now and then you read something that strikes a chord... but you can't figure out exactly how to apply it. A posting by John Sviokla in his blog last month was like that for me. John's premise seems unassailable, whether you are discussing selling widgets to consumers, marketing your consulting services to non-profits, or fundraising for your 501c3: you need to keep your focus on the customers or donors with the greatest future value to your organization. But then he drops this bomb:
Put another way, using CRM systems to drive your service system is like navigating by looking at the rear view mirror, while ignoring the scene outside the windshield.
What does this mean? Well, one example from John: Verizon tracks the services he purchases from them... but they do not know how much telephone service he has with other vendors -- at his office for example. So they do not know what percentage of his total phone business they have already won.

Translated into fundraising terms: most organizations use their CRM or Fundraising software to track a donor's past performance with their organization. But do they record what other organizations this donor funds, and at what levels? Without this information, the system can't help you assess this prospect's full potential.

And of course, having a CRM that lets you track other organizational involvement for each donor is just the tip of the iceberg. Obtaining this information and keeping it up to date is the real challenge.

But this is just an example. How do you assess the future potential of each donor when prospecting for major gifts? And how might CRM software be put to better use in helping you make this forward-looking assessment?
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Comments on "RearView Fundraising"


Anonymous Anonymous said ... (June 2, 2006 at 9:56 AM) : 

Hi Michael,

I think this is a very interesting idea, and there are methods you can employ to "predict" how much a donor might be worth to your charity.

In the UK we can cross reference lifesytle and wealth data (based on Postcodes) against a donor database which is a very useful way of understanding the wealth of a donor. From this information, you can use statistical tools such as correlation to begin identifying what that donor could be worth to you in the future.

In Australia I built a model for a face to face fundraising company which used some of these techniques, and it worked quite well.

Naturally, using stats can be a bit hit and miss - is a donor's wealth actually an important indicator of their potential to give?

There are also data protection issues to take into account - I've never added wealth information to a donor's record.

Does anyone else use other techniques to predict future levels of giving / predicted value of the donor?


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