Predictive What?

Here’s the all-too-common fundraising process for nonprofits: a donor writes a check, the nonprofit cashes it, the donor’s info goes into a database so they can ask for money again through a letter or a phone call. The nonprofit only has a best guess if that donor will give again, but they invest resources into continually asking. But more nonprofits are using predictive analytics to hone in on the donors with the highest percentage of giving, and saving money while growing revenue, says JCA business intelligence group director Steve Beshuk.

Predictive analytics uses data science and statistics to forecast a donor’s future behavior, Steve says. The concept of predictive analytics has been around for decades, but technology makes it easier and more affordable for nonprofits. Manhattan-based JCA recently worked with the Children’s Cancer Research Fund, which wanted to improve its direct marketing campaign. The organization knew it was mailing too much and wanted a way to pick the best prospects. Its campaign was going to run about $1.77 per donor to reach, but by mailing to fewer donors, who were more likely to donate, the organization reduced its cost by 30% and raised more money.

Steve says predictive analytics has also helped membership organizations identify the members more or less likely to renew, and then figure out how much to invest in targeting the “sure things” versus the less likely renewers. Steve says data-driven decisions in the nonprofit space are now a standard part of operation. (Now it’s cliché to even use the term “data science.”) He expects more organizations will start hiring predictive analytics experts to incorporate it even further.