Are You Getting Worthwhile ROI from Your Events?

This article from The Chronicle of Philanthropy is quite good. Although I was not primarily an event fundraiser, staffing cuts eventually left me directly in charge of a major annual gala (whereas I had previously been one level removed, having a direct report who supervised the event.). Even before I assumed direct responsibility I was painfully aware of one of the unpleasant aspects of events: Usually you only hear complaints, and lots of participants have lots of strong opinions which they are very happy to share, often with rather less sensitivity than they might normally bring to a conversation. I found events to be rather like publishing annual reports of donors: The best you could hope to do was not to tick too many people off.

One of the things I like about the author’s suggestion is that this framework can be applied proactively rather than reactively, which, for me, softens the blow of “feedback.” It also serves to (try to) keep participants focused on improvements and solutions, rather than blame.

Beyond this, the article got me to thinking once again about something that never sat well with me – the typical assumptions made about the value and impact of events beyond their direct financial impact. Everyone knows that events are an extremely “expensive” form of fundraising. At my old independent school, the “real” net income from our annual gala auction, after expenses and salaries (that’s right, I always included the cost of staff, which sometimes gets excluded from the calculation) ended up being only about $25,000 per year.

When this fact was pointed out to leaders (Head of School, board members, influential parent volunteers), the typical responses included well-known “axioms” about the importance of friend raising, getting parents involved as volunteers, etc. Another frequent claim, which relates to the point I want to raise here, was that getting people to give via the auction was a “gateway” to additional giving, particularly to the Annual Fund (which is extremely important in the independent school world, since at most schools it fills a planned hole in the annual budget – the so-called “gap” between tuition and the actual cost of educating a student).

Even though the auction itself was not very lucrative, how could anybody argue with getting new donors?

As it turned out, this anecdotal connection between the auction and other forms of giving turned out to be purely anecdotal.

As in 100% anecdotal. As in 0% true.

I had relatively limited data, but when I looked at the three-year period for which I had complete information, I discovered something quite shocking: The top 20 auction donors (a subset of whom were the lead volunteers) had given, over the same three-year period, a grand total of $0 to the Annual Fund.

That’s right, zero.

I am not making any universal claims about the connection or non-connection between event giving and other forms of giving. I should think this case was at least somewhat unusual. What is more, your organization’s event may produce relatively excellent net fundraising results. A cost of 30 cents per dollar raised (assuming it counts salaries) is pretty easy to swallow when your event grosses $1,000,000. However, what I am suggesting is that it would be worth a bit of time and effort to try to analyze the larger ROI of your events, especially if you are not seeing significant direct financial returns.

When I build custom predictive models for clients, I always look closely to see if there is a statistically and practically significant correlation between event attendance and overall giving. Even if you can’t carry your investigation that far, consider simply looking at your large event donors and their event giving vs. direct (non-event) giving, and see where the information leads you. What would you do if you found that your events provided minimal direct and indirect ROI?

Brandon Ferris
Senior Director of Strategic Services and Fundraising Counsel
Zuri Group
brandon@zurigroup.com
@datadrivenbf
datadrivenfundraising.com
www.zurigroup.com

Letting Go of Sacred Cows: The Danger of Being Data-Driven

So you want to become more data driven, right? Everyone does. Everyone is sold on the power of analytics to enable smart, data-driven decision making to improve organizational results. I don’t think it’s entirely unfair to say that terms like “big data,” “analytics,” and “data-driven” are so deeply ingrained by now as to approach buzzword status (not a good, thing, of course!).

But are you really ready to be data-driven, to go wherever the data leads you? It’s often not as easy as you might think it should be for people and organizations to allow data to guide their decisions, tactics, and strategy, especially when the data contradict something they just “know” to be true. Aren’t some things simply given? Simply and obviously true a priori? We all hold these kinds of “convictions” about something, and when we encounter data that contradict what we “innately” know we naturally resist and find ways to rationalize the data away.

There was a perception at an independent school for which I worked (in advancement) that the school’s culture and programs were not adequately “girl-friendly,” which was driving increasing attrition among female students, particularly at the key transition point between grades 8 and 9 (it was a K-12 institution). There was considerable speculation, particularly at the Board level, about what needed to be done to fix the problem. Not atypically, there were some loud voices on the board seeking to push various pet programs, which their advocates intuitively “knew” would improve results.

It happened that we were working on an institutional research project for admissions, and we had enough data to take a look at gender and attrition. We needed to quantify the problem of accelerating female attrition before we could look for correlations. What we found was that there was no particular female attrition problem. In fact, the retention rate for female students was slightly higher than that for our male counterparts. What was really happening was that way back at the start of the pipeline, in grades K, 1, and 2, the balance of students was 60% male, and that balance largely held all the way through. Not exactly something that should have been hard to notice or uncover, but the perceptions were established and this was overlooked.

Did this “revelation” put an end to the calls to add a cheerleading program to the upper school (one board member’s solution for making the school a better place for girls)? The title of this piece provides a hint. The certainty about the female attrition problem survived unscathed. We would like to think we are fundamentally rational beings, but it is hard to let go of closely-held beliefs, no matter how information points in another direction.

What does this kind of resistance to what the data are telling us look like in advancement? It takes many forms. Here are a few I’ve seen recently:

  1. Continuing to mail the same number of solicitations annually to a large pool of never-givers, despite models that suggest de-emphasizing a population and re-directing resources to more likely constituents.
  2. Spending significant gift officer time on statistically low likelihood prospects who have extremely high wealth ratings (yes, it’s fine to make a discovery call if the prospect will take an appointment; but at some point it’s time to move on).
  3. Allocating significant personnel time to maintaining some sort of “extremely important” constituent list, despite not knowing whether there is any correlation with giving (and sometimes, even knowing that no such correlation has been found).

Some people have very little difficulty accepting data-driven conclusions that run counter to accepted wisdom; in fact, some people enjoy the power of data to undermine unexamined assumptions. I know I find it quite exciting. But I’m sure if some Sabermetrician showed me advanced statistics indicating that up to this point in his career Novak Djokovic has been a better player than Roger Federer during a similar interval, my first reaction would be something along the lines of “that’s not what I’ve been watching.” But, as a data-driven fundraising practitioner and consultant, I would have to shrug that off quickly and listen to what the data have to say. In the end, our biases can be overcome, but it does take a degree of conscious effort and repetition. If you’ve made a commitment to becoming a more data-driven fundraising organization, you’ve taken the first step. Remind yourself to hold opinions lightly and to be open to the messages in your data.

Brandon Ferris
Senior Director of Strategic Services and Fundraising Counsel
Zuri Group
http://www.zurigroup.com
@datadrivenbf
brandon@zurigroup.com