Analyzing the gift-giving impulse: Nonprofits and analytics

Traditional economics teaches us that people act in their own rational self-interest to improve their “utility.” In any textbook, that’s a fuzzy term, but it often refers to one’s economic position. In many cases, people will act in a way that puts more dollars in their pocket, if given the choice. 
But in some cases, they won’t. This is because human beings aren’t 100 percent rational and aren’t 100 percent driven by the desire to get rich. Theoretically, this means that the irrational impulse to not get richer cannot be predicted, studied, or analyzed by rational means; it’s too chaotic and random to be understood.

At least, that’s how economists thought long ago. Modern behavioral economics disagrees and argues there are ways to analyze human behavior to understand why they do so-called “irrational” things that don’t improve their bottom line.

Like, for instance, giving money to charity.

In today’s data-driven world, the study of why and how people choose to give to charity remains very small compared to the massive dollars of funding pouring into the study of why people choose one brand of shampoo over another, for example. But that doesn’t mean data isn’t being analyzed and numbers aren’t being crunched right now to see exactly what trends there are in the human compunction to give to needy causes.

At this year’s Washington Nonprofit Conference at the Renaissance Washington, D.C. Downtown Hotel, several sessions will touch on how the nonprofit world is getting shaken up — for the better — by the analytics revolution. In "Data- Driven Dollars: Using Predictive Modeling to Enhance the Solicitation Experience,” Memorial Sloan Kettering Cancer Center analytics specialists Ivana Krizanic and James Cheng will discuss how they used predictive analytics to complement existing strategies for their annual fundraising, resulting in a 20 percent boost to money collected. 
In "How Advanced Analytics Can Drive More Net Revenue,” RobbinsKersten Direct Client Services VP Andrew Laudano and SVP Advanced Analytics Thalamus Hill will discuss using analytics to drive fundraising initiatives with Humane Society International Direct Marketing Manager Michelle Munger.

The Humane Society has consistently been one of the most successful fundraisers in the world, and they have leveraged analytics to gain a better understanding of how and why they have been successful. This creates a virtual cycle of more success, more revenue and more good done for the world.

Join us at this year’s Washington Nonprofit Conference to see how your good cause can use analytics to understand the irrational and virtuous impulse some human beings have to give up wealth for a better, happier world. With innovations in data collection and analytics, fundraisers are going to get better and better at targeting and campaigning to bring the best out of humanity.  
This article is brought to you by the DMA. Click here to register for Nonprofit Federation Conference, Feb. 18-19, 2016, in Washington, D.C