What It Means to Be Data-Driven for Annual Appeals

12/17/2020 RRD

What It Means to Be Data-Driven for Annual Appeals

Fundraisers may be creating their most challenging (and most important) annual giving campaign yet. To offer up some support, we’re interviewing subject matter experts in creative, analytics, and direct mail strategy to help you drive a successful appeal program.

In part two of our interview series (see part one here), we talk to Doug Swager — a 35-year data-analytics veteran and Director of Analytic Services at RRD — about making the most of donor data for an effective appeal program.

From a fundraiser’s perspective, where should their analytic focus be?

Doug Swager: Taking an analytic perspective to fundraising is a little different than how you might for the consumer vertical. That personal connection a donor has with a cause is extremely valuable. 

I think, first and foremost, it’s important for fundraisers to recognize affinity has so much to do with their success; the affinity your donors have with your cause or foundation. And in general, a donor has a tendency to be a donor again. So, short answer: analytics should really be focused on the current donor list. 

Focusing on a current donor list, what kind of analysis makes sense right now? 

DS: Consider an RFM (recency, frequency, monetary) analysis. It’s simple, effective, and rooted in your donors’ past behavior. It works well in the retail environment and has proven to be reliable for fundraisers prioritizing their retention and upgrade efforts.

I call it simple because it doesn’t require complex statistical analysis or detailed demographic profiles. If you have access to your donors’ giving histories [in a spreadsheet or database], you can do an RFM analysis.

At a high level, RFM helps confirm your best annual fund givers. Recency establishes the last gift given; frequency, the rate a donor gives; and monetary shows just how much a donor gives. 

Combined, fundraisers can create a donor score, which will help you locate those with the highest propensity to give. This will focus targeting to reduce mailing costs and boost response.

In addition to identifying donors likely to give again, can an RFM analysis help increase the amount a donor gives? 

DS: Absolutely. The idea of “step-up” donor levels comes to mind immediately. We're always trying to step donors up into the next level of giving, which is something analytics can really help with, especially when driving the variable print aspect of it.

With RFM, once you’ve identified donors who consistently give the same amount every year, you can use that insight to guide the next piece that goes out to incentivize them differently to give more.

For example, let’s say your traditional appeal has four checkboxes: $10, $20, $50, and $100. If you know a donor consistently gives you $10, you may want to step up that lowest amount on the next mailer to $15 — or even eliminate it entirely.

For fundraisers looking to strengthen their donor database, what advice would you share with them?   

DS: What useful data points are missing from your donor profiles? If there are gaps in your database, answering that question starts with simply asking your donors for more info. Zeroing in on their preferences around how you communicate with them can be a smart place to start.

What channel (e.g., direct mail, email, text) are they most likely to respond to? What kind of information or content do they want to receive? And when or how often do they want to hear from you? Gathering answers to those types of questions are key to perfecting your engagement strategy.

Do you foresee foundations and nonprofits scaling back investments in analytics and data management?

DS: I realize not everyone functions with a team of full-time data scientists digging into their donor database. That said, there’s never a bad time to invest in data — in some shape or form — because the more it becomes a priority, the more you can understand and adjust the donor experience to improve loyalty and retention.

Based on some of our own recent market research, marketers saw campaign execution as the most important marketing function when it comes to the ultimate success of a marketing program. Today, more than 90% say data management is the most important, which represents a 30% jump (from pre-COVID times). 

To me, this suggests marketers are turning to data as they look to better understand their “new normal” target audiences’ habits, preferences, and behaviors. I have to imagine fundraisers are right there with them. 


Bio: Doug Swager is the Director of Analytic Services at RRD. He leads RRD’s predictive modeling, customer segmentation, and data discovery practice. He has been a fixture in the direct marketing and data information technology sector since 1984.

Doug has extensive experience working in and with the industry’s most well-known direct marketing organizations. He applies invaluable knowledge to advanced data analytics solutions such as acquisition modeling, customer clustering, retention/attrition prediction, multi-variable test design and long-term customer value analysis

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