Of course they do. Who wouldn’t want one? With a ‘magic box’ a fundraiser could become much more efficient and effective. They’d be able to zero-in on the best donor prospects, call them up, land a meeting, build a relationship quickly, solicit a gift, close it, and take a victory lap around the office.
But that doesn’t stop eager vendors, consultants and others in the sector from leading fundraisers, leaders, and board members to believe that something pretty darn close to a magic box can, indeed, make an organization’s fundraisers more successful. So they sign-up to have their data processed.
First they begin by looking backwards at each donor’s recency of giving, frequency of giving, and the total monetary value of giving (also known as RFM). Never mind that hardly anyone would depend heavily on past performance when picking stocks for investments. Of course not! After all, every finance magazine and banking or investment business carefully states that past performance is no guarantee of future results.
Nonetheless, that’s what well-meaning staff do. They start by looking at past performance knowing full well that the information can’t possibly be accurately indicative of future results. And why wouldn’t they? A better way doesn’t exist. Or does it?
If you’ve relied on RFM for decades now, you might find yourself feeling perturbed. You might be thinking, “Who is this guy telling me my beloved RFM doesn’t work?”
Don’t get too hot! I think RFM and the other techniques described below work for narrowing down direct response lists in order to save precious dollars spent on printing and postage costs. But we’re talking about zeroing-in on the best major donor and legacy gift prospects.
So stay with me on this. Open your mind to new ideas. Put aside your orthodoxies and whatever you’ve heard in your favorite fundraising echo-chambers. Come on! Deep down you know that RFM is directional at best for building major and legacy gift portfolios for gift officers.
Take a deep breath and read on.
If you agree that your RFM result has been imperfect, good for you! The first step to improvement is always the recognition of the existence of a problem. Now, let’s continue.
For many, the next step for identifying ideal donor prospects includes ‘overlaying’ wealth screening data with RFM results. The problem with this part of the process is that wealth screening information is only about 40% accurate at best (according to discussions I’ve had with the vendors that sell it and have admitted that fact to me).
At first I couldn’t believe what I was hearing. So, three years ago I began testing data from every wealth screening firm I could find. Then I tested data straight from the humongous firms that most of the wealth screening companies use as the sources of their inputs.
The result: It was LESS than 40% accurate!
Why? Because people who have a lot of money know how to hide the fact that they have a lot of money. I wrote about that here when I laid out the 7 big reasons why capacity is so hard to uncover.
So now you’ve got less-than-accurate wealth data overlaid with backwards peering RFM data that is no guarantee of future success.
Are you beginning to see what I saw years ago? Could it be that marrying weak information with another kind of weak information might produce the holy grail you’re seeking? Unlikely, right?
You may have noticed some new, shiny vendors popping up. They say they’ll apply machine learning and artificial intelligence to the RFM and wealth screened data to get you the ‘magic box’ you’ve been yearning for.
Again, I think this could yield some benefit for narrowing down direct response lists. Thereby reducing printing and postage costs. However, applying sophisticated technology to backwards viewing and only somewhat accurate data doesn’t necessarily make the results any better. You’ll need to track results after soliciting the major and legacy donor prospects. Then you’ll need to provide it to these firms over time. Finally, the machine might have a shot at ‘learning’ whether or not the original outputs were correct or not. Then it will adjust its future results accordingly until it gets more feedback data to nosh on.
But never mind all that, it’s a magic box! The vendors tell you it’s good…
Sh#t goes down when all this information reaches a talented gift officer’s desk.
Sadly, according to a 2017 study conducted by Ruffalo Noel Levitz that asked nonprofit gift officers ‘what percent of newly assigned prospects they felt were truly qualified to be in your major and/or planned gift donor pool,’ the gift officers said only 37% were truly qualified.
Funny how that figure lines up so closely with the 40% stat I mentioned above, isn’t it?
Well, maybe funny isn’t the best way to describe it since the gift officers sent on wild goose chases surely feel that their wasted time is no laughing matter. Interesting might be a better word for it.
Is it any wonder why turnover is so high among those positions? Who would want to spend their day like Charlie Brown, trying to kick the football while Lucy pulls it away over and over again? For many of them the ‘magic box’ is a menace!
Remember donor discovery? Truly effective donor discovery helps you qualify and prioritize a supporter for your caseload. It goes way beyond prospect identification.
With donor discovery you can determine the following:
You just can’t truly qualify a supporter for major and/or legacy giving without this kind of dense information. But gathering it via donor discovery takes time and everyone is in a rush. “We need money now,” they say to well-meaning gift officers. “Go visit the list we gave you,” they continue (never mind that getting an appointment is no easy chore). Sigh!
What if you could conduct thousands of donor discover engagements in minutes?
Well, now you can. And best part is that it doesn’t cost an arm and a leg. It’s powerful and effective, fast and relatively easy.
Plus, as a result of tech-enabled donor discovery, gift officers find that they can, indeed, be the fundraisers they always wanted to be. They stay in their jobs much longer. There’s less of a need for them to hop around because, finally, they feel supported. And, they find themselves spending more time with highly passionate, high capacity supporters who are ready to talk about giving.
You can find out with no pressure whatsoever. Just chat with someone on my staff. They don’t get paid sales commissions and they love to share their knowledge with awesome folks— like you! So what are you waiting for? Why not sign up to chat with one of them today?
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