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

Phoenix Rescue Mission’s 18% Year-on-Year Revenue Growth Story

Nonprofit marketing is a different animal. Instead of selling a product, you’re selling a feeling. You want to target an audience that has similar values as you do, and you want to convince them to express those values by giving up their hard-earned cash while getting nothing tangible in return. Except for the feeling and the knowledge that they are doing good in the world.   

For this reason, nonprofit marketing has a lot in common with branding. It isn’t about making a direct sale by presenting a great financial proposition to customers (“Act now and get 30% off!” won’t exactly work here). It’s about making your audience feel the right feelings at the right time and then directing those emotions into actions that will do good for your cause, your organization and the world.

If this sounds hard, that’s because it is.

Many nonprofit marketers have experience in more conventional marketing and public relations, so they are familiar with the emotions involved in advertising. However, the best nonprofit marketers also realize that the rules are very different for them, and the best practices for getting a solid return on advertising spending involves a different mindset.

There are many examples of successful nonprofits who learned how to do this with enormous success. Some, like the Sally Struthers Africa charity commercials of the 1980s or the Sarah McLachlan SPCA commercials of the 2000s, not only go viral but make a permanent impression on the public’s consciousness and popular culture. They are subsequently copied by other nonprofits for years to come.

You don’t need to create a new, impactful TV commercial for your nonprofit to get strong results. One nonprofit in Phoenix incorporated a variety of tactics and approaches using the best practices of the nonprofit industry to grow revenues 18 percent year-over-year.

Phoenix Rescue Mission saw its donor file declining after 60 years of operations. In 2012, retention rates fell to the low 40s with registered donors falling below 19,500. In 2013, the organization began a path to growth, increasing overall revenues despite a declining number of donors, and was able to achieve three years of accelerating growth to reach 18 percent year-over-year growth in revenues in 2015.

At this year’s DMA Nonprofit Federation DC Conference, Phoenix Rescue Mission Director of Marketing and Public Relations Nicole Pena will discuss the marketing objectives and strategies her group employed to save their mission. From 9-10 a.m. February 19, Pena will host a workshop detailing her group’s winning strategy. Join her to see how you can bring buzz, excitement and revenue growth to your nonprofit, whether you’re facing declines or not.   
This article is brought to you by the DMA. Nonprofit Federation Conference takes place Feb. 18-19, 2016, in Washington, D.C.