Retention

Knowledge is Power: How the Fundraising Effectiveness Project Can Help Your Organization (Part 2 of 3)

“…even small improvements in the level of attrition can generate significantly larger improvements in the lifetime value of the fundraising database. A 10% improvement in attrition can yield up to a 200% increase in projected value, as significantly more donors upgrade their giving, give in multiple ways, recommend others and ultimately perhaps, pledge a planned gift to the organization.”
– Adrian Sargeant, Robert F. Hartsook Professor of Fundraising, Indiana University

This is part two of a three-part series of blogs focused on the Fundraising Effectiveness Project (FEP) and how it can have an impact on your nonprofit organization. We started with an introduction to FEP in Part 1, and will now take a look at how your organization can participate and benefit from the project. Next time, we will wrap up by analyzing the most recent FEP report and how to interpret your results. Once the 2013 report is released, we will again re-visit this topic.

Whether you have been at your organization for many years, or whether you are new and have inherited a program and database you are not intimately familiar with, it is enlightening to see your organization’s trending for retention rates over multiple years. Or, to see how you are trending vs. other nonprofit organizations in your vertical or region can be equally as enlightening. Imagine seeing a trend line that shows that your newly acquired donors give drastically less in year two. Or worse, they don’t give a gift at all! Would you evaluate how you are communicating and on-boarding your new donors? On the flip side, if you made some decisions to change your strategic direction, wouldn’t it be nice to clearly see the impact of growth so you can share with your leadership?

“It’s not sufficient to look only at gains in giving or the number of donors. To understand what is really happening in your organization, it is necessary to analyze both the fundraising gains and the fundraising losses from one year to the next so that you and your organization’s leadership can make growth-oriented decisions about both fundraising budgets and strategies.”
– Bill Levis and Cathlene Williams   (A Better Measure of Success).

So, how do you start, and what do you need to do?  Here are the basic steps to get you started:

Step 1:  Get your data from The Raiser’s Edge Plug In
Step 2:  Enter your data into the ‘Growth In Giving’ reporting tool
Step 3:  Analyze Your Data

I. Step 1:  Get your data from The Raiser’s Edge Plug In
In The Raiser’s Edge, it can simply be located in the “Plug-Ins” section “Fundraising Effectiveness Project Plug-in”.

Once you are in the FEP Plug In: For this exercise, you will need to add Start and End dates into Period 1 and Period 2. Note, these should be two concurrent 12 month periods.  You can use your fiscal year or calendar year as you desire.

When your date ranges have been entered, click the ‘Preview’ buttons for All, Individual and Org Giving. I would suggest then right clicking each grid, and exporting to excel. This makes the next step easier, and also gives you a place to store your historical data if need be.

NOTE: This is from a sample database, yours should look different. You do not need to ‘Send’ or add information in the ‘Enter Your Organization Details’. Rather, you will need the data that is generated when you select ‘Preview All Data’, ‘Preview Individual Data’ and ‘Preview Organization Data’. This data can be exported to excel for easy / future reference.

II. Step 2:  Enter your data into the ‘Growth In Giving’ reporting tool
Download AFP’s Growth in Giving (GiG) Reports (downloadable template) which will provide you the output of your trending, benchmarks as well as provide tools to run ‘what if’ scenarios in order to understand what your bottom line would look like if, say, you decreased the lapsed donor trend by 5%.

Once you have downloaded this report, click on the second tab “DataInput”.  You will need to enter the information exported from The Raiser’s Edge in Step 1 above into the GiG report on the ‘DataInput’ worksheet. See illustration below, fields highlighted in yellow are the data elements you need to enter. For this scenario, let’s use the numbers from the “All Constituents” grid populated from RE. If you want to analyze just Individual or Organizational giving separately, you can just enter the data from the Individual or Organization grids.

(Hint, for the ‘Upgraded’ line, you will need to combine/sum both the ‘Upgrade’ AND ‘Upgrade New’ from the RE data. This will be true for ‘Same’ and ‘Downgraded’ as well.)

NOTE: Both of these images are sample data. The data in this spreadsheet will not reflect the numbers in the output above.

III. Step 3:  Analyze Your Data
After this data has been entered, the other tabs within the worksheet will contain data analysis, graphs and charts based on your information.  Some examples below:

Note: If you want to further compare your current results with previous year(s), you can run the FEP Plug in again, but using different date ranges.  The GiG report has additional worksheets;  e.g. the Comparison worksheet, where you can enter additional data for analysis including previous year.

I have seen how this information has proven to be an enlightening exercise and has forced some healthy discussion. In some cases, this has resulted in directional changes geared towards stemming losses, increasing retention, and improving communication in order to sustain a much healthier fundraising program.

Stay tuned for next time when we will analyze the results from the 2012 report and some specific examples to reveal trends.

Additional Information:

The FEP survey groups giving trends broadly and categorizes dollars as either contributors of value (new gifts, upgrades, etc.) or detractors of value (lapsed donors, downgrades, etc.). One key thing to consider when thinking about how your outcomes will reflect on your organization, is exactly what data is included and excluded from your results. Recognized data includes:
• Gifts – Restricted  And Unrestricted
• Pledge Payments
• Cash and Fair Market Value for Stocks
• In-Kind (tangible) donations

On the other hand, these items are excluded:

• Pledges (promises to give at a later time)
• Deferred gifts
• Donations of personal services and use of facilities
• Costs-benefiting-donors portion of special-event income

In addition, to ensure a full understanding of the FEP groupings, the definitions for gain/loss categories:
New – First time donors who have never given prior to Period 2
Recapture – previously lapsed donors who contributed again in Period 2
Upgrade – donors who contributed more year 2 than in Period 1
Upgrade new –first-time donors in Period 1 who contributed a higher dollar amount in Period 2
Same – donors who contributed the same amount in both years
Same new –first-time donors in Period 1 who contributed the same dollar amount in Period 2
Downgrade – donors who contributed less in Period 2 than in Period 1
Downgrade new –first-time donors in Period 1 who contributed a lower dollar amount in Period 2
Lapsed new –first-time donors in Period 1 who did not give in Period 2
Lapsed – other lapsed donors who gave in Period 1 AND in prior years but not in Period 2

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