Is this helpful information?

Joel Weinbach

I am a data guy who has learned a little about general fundraising strategy and tactics by listening to what people tell me when discussing their data and how they want to use it. While I regularly use and talk about AI for data analysis, I have been wondering how good the AI foundational models are at interpreting that data and making recommendations.

I have gotten generally weak answers (even I can see that) when I have taken a straightforward approach with ChatGPT, Gemini, etc. However, lately, I have been experimenting with accessing these tools via API and layering/combining results, and I am starting to see things that I think may be interesting. I don't think consultants are in any danger of being replaced by this, but in terms of a brainstorming tool or just something to start seeing the forest for the trees, is there interesting info in here? or is it all completely obvious to the average fundraiser?

This was the data I gave it to work with:

Gift Year	Donor Count	Total Gift Amount
2023	3975	$15,847,494.65
2022	3993	$12,389,895.75
2021	3990	$11,678,036.41
2020	3952	$10,559,207.40
2019	2512	$4,825,996.85

and this is what was output. No effort was made to format. It is just an experiment. The concept was a roundtable discussion between multiple “experts,” and the result is below.

Charlene's Analysis: ### Fundraising Performance Overview (2019-2023)

**Key Trends:**
1. **Consistent Donor Growth:** There has been a significant increase in the number of donors from 2019 to 2023, with the donor count rising from 2,512 in 2019 to 3,975 in 2023. This represents nearly a 58.2% increase over the five-year period.

2. **Substantial Increase in Total Gift Amounts:** The total gift amounts have seen an impressive upward trend. In 2019, the total gift amount was approximately $4.83 million, whereas in 2023, it reached around $15.85 million. This is an approximate 228.3% increase over five years.

### Year-Over-Year Analysis:

- **2019-2020:**
- **Donor Count:** Increased from 2,512 to 3,952.
- **Total Gift Amount:** Rose from approximately $4.83 million to $10.56 million.
- **Observation:** Significant growth in both donor count and total gifts, likely attributed to strategic donor engagement efforts or successful fundraising campaigns.

- **2020-2021:**
- **Donor Count:** Small increase from 3,952 to 3,990.
- **Total Gift Amount:** Increased from $10.56 million to $11.68 million.
- **Observation:** While the donor growth was marginal, the total gift amount saw a notable increase, suggesting larger gift sizes or more high-value donations.

- **2021-2022:**
- **Donor Count:** Slight increase from 3,990 to 3,993.
- **Total Gift Amount:** Rose from $11.68 million to $12.39 million.
- **Observation:** Similar to the previous year, the donor count has plateaued, but there’s a positive trend in the total amounts raised.

- **2022-2023:**
- **Donor Count:** Slight decrease from 3,993 to 3,975.
- **Total Gift Amount:** Substantial increase from $12.39 million to $15.85 million.
- **Observation:** Despite a minor drop in donor count, the total gift amount sharply increased, indicating a possible focus on major gifts or donor retention strategies that enhance gift sizes.

### Initial Observations:
1. **Successful Donor Growth Strategies (2019-2020):** The initial surge in donors and total gifts suggests effective outreach and engagement.

2. **Stabilization of Donor Count:** After 2020, the donor count sees marginal fluctuations, indicating the organization has reached a steadier state in terms of the number of donors.

3. **Increasing Gift Sizes:** The consistent upward trend in total gift amounts through 2023 highlights an increase in donation sizes, reflecting successful major gift campaigns or stronger donor cultivation efforts.

4. **Potential Areas for Improvement:**
- **Donor Retention and Growth:** With a stable but stagnant donor count post-2020, exploring new donor acquisition strategies while improving retention could help boost future donor numbers.
- **Diverse Fundraising Channels:** Utilizing multiple fundraising channels and strategies (e.g., digital campaigns, corporate partnerships) could offer avenues for further growth and donor engagement.

This analysis indicates strong overall performance with room for strategic improvements to sustain growth and diversify fundraising efforts further. Your insights on actionable steps focusing on donor diversification and retention would be greatly valuable for our next team meeting.

--- *End of Analysis* ---

George's Input: Here is a more in-depth analysis of the provided fundraising data, incorporating a strategic lens to glean actionable insights:

**Subject: Deep Dive Analysis of Fundraising Performance (2019-2023) & Strategic Recommendations**

Hi [Colleague's Name],

I’ve reviewed the initial analysis of [Client Name]'s fundraising performance. Here's a deeper dive to help us formulate impactful recommendations:

**Strengths:**

* **Impressive Overall Growth:** The organization achieved substantial growth in both donor count and total funds raised over the five years, indicating effective initial strategies and potential for future success.
* **Successful Major Gift Acquisition:** The significant increase in total gift amounts, despite a plateauing donor count post-2020, suggests a successful focus on cultivating major gifts. This is crucial for long-term sustainability.
* **Data-Driven Approach:** The initial analysis demonstrates an understanding of key metrics and year-over-year trends, providing a solid foundation for strategic decision-making.

**Potential Areas of Concern:**

* **Donor Retention:** While the initial donor surge was impressive, the plateauing and slight dip in donor count from 2021 onwards raises concerns about donor retention. High churn rates can significantly impact long-term revenue stability.
* **Over-Reliance on Major Gifts:** While securing major gifts is vital, an over-reliance on a small number of large donations creates vulnerability. A diversified funding base is essential.
* **Limited Information on Fundraising Channels:** The analysis lacks details about the specific fundraising channels and campaigns employed. This makes it difficult to assess their effectiveness and identify areas for optimization.

**Data-Driven Insights & Opportunities:**

1. **Analyze Donor Cohorts:**
* **Recommendation:** Segment donors acquired in each year (2019, 2020, etc.) and analyze their retention and giving patterns.
* **Benefit:** This will reveal which years yielded the most loyal donors and identify potential issues in subsequent years' acquisition or cultivation strategies.
2. **Assess Average Gift Size by Donor Type:**
* **Recommendation:** Calculate the average gift size for major donors, regular donors, and first-time donors.
* **Benefit:** This will highlight potential for growth within each donor segment. For example, are there opportunities to increase average gifts from regular donors?
3. **Evaluate Fundraising Channel Effectiveness:**
* **Recommendation:** Gather data on the performance of different channels (e.g., online donations, direct mail, events).
* **Benefit:** By understanding which channels are most effective for acquisition and which drive higher donation amounts, the organization can optimize its resource allocation.

**Strategic Recommendations:**

1. **Develop a Robust Donor Retention Plan:**
* Implement donor stewardship activities such as personalized communications, impact reporting, and engagement opportunities to foster long-term relationships.
2. **Diversify Fundraising Streams:**
* Explore and invest in a mix of fundraising channels (online giving platforms, peer-to-peer campaigns, corporate partnerships) to reduce reliance on a single source.
3. **Segment and Target Donor Communications:**
* Tailor communications and appeals to specific donor segments based on their giving history, interests, and engagement levels to improve response rates.
4. **Strengthen Donor Data Analysis:**
* Invest in a donor management system or improve the utilization of existing tools to enable deeper analysis of donor behavior and campaign effectiveness.

**Next Steps:**
To move forward with these recommendations, let’s gather the following data points before our next team meeting:

* Donor retention rates by acquisition year
* Average gift size by donor type (major, regular, first-time)
* Breakdown of fundraising revenue by channel

This deeper analysis will allow us to provide [Client Name] with actionable insights and a data-driven roadmap for achieving sustainable fundraising growth.

Analysis: Thank you for sharing this comprehensive analysis. I've reviewed the insights and recommendations provided by our colleagues, and I'd like to offer some additional perspectives and elaborations:

1. Donor Lifecycle Analysis:
While the cohort analysis suggestion is excellent, I propose we take it a step further by conducting a full donor lifecycle analysis. This would involve mapping out the typical journey of a donor from first gift to major contributor, identifying key transition points and potential drop-off moments. This could reveal opportunities for targeted interventions at critical stages of the donor relationship.

2. Retention Rate Benchmarking:
In addition to analyzing internal retention rates, I suggest benchmarking these figures against industry standards for similar nonprofits. This context will help determine if the observed plateau is a cause for immediate concern or within normal ranges, guiding the urgency and scale of our retention strategies.

3. Giving Capacity Assessment:
While we're looking at average gift sizes, I recommend incorporating a giving capacity assessment for current donors. This could uncover untapped potential within the existing donor base and inform personalized cultivation strategies for mid-level donors who could become major contributors.

4. Multi-Channel Attribution Analysis:
Expanding on the channel effectiveness evaluation, I propose implementing a multi-channel attribution model. This would help understand how different touchpoints (e.g., email, social media, events) work together to influence donations, rather than viewing channels in isolation.

5. Donor Acquisition Cost Analysis:
To complement the focus on retention, we should analyze the cost of acquiring new donors across different channels. This will help optimize the balance between acquisition and retention efforts, ensuring sustainable growth.

6. Predictive Modeling for Major Gifts:
Given the success in major gift acquisition, I suggest exploring predictive modeling techniques to identify potential major donors within the current donor pool. This data-driven approach could significantly enhance the efficiency of major gift officers.

7. Impact Measurement and Communication:
While not directly related to fundraising metrics, I believe we should assess how effectively the organization measures and communicates its impact. Strong impact stories can significantly influence both retention and major gift solicitations.

8. Testing and Innovation Framework:
I recommend developing a structured framework for testing new fundraising strategies and channels. This could include A/B testing for appeals, piloting new engagement events, or experimenting with emerging digital fundraising tools.

9. Board Engagement in Fundraising:
We should evaluate the current level of board involvement in fundraising and potentially recommend strategies to increase board member participation in donor cultivation and solicitation.

10. Planned Giving Program Assessment:
Given the focus on long-term sustainability, an assessment of the current planned giving program (if any) could reveal opportunities for future revenue growth and donor retention.

These additional perspectives aim to provide a more holistic view of the fundraising ecosystem and offer strategies that balance short-term gains with long-term sustainability. I'm eager to discuss these ideas further with the team and refine our recommendations for the client.

**Additional Data Analysis**

1. **Lifetime Value Analysis**: Perform a Lifetime Value (LTV) analysis to understand the long-term value of different donor segments and guide where to allocate resources for maximum return.

2. **Churn Analysis**: Conduct a churn analysis to identify patterns and predictors of donor drop-off. Use this data to develop preemptive strategies to re-engage at-risk donors.

3. **Channel Effectiveness Analysis**: Examine the performance of different fundraising channels (email, social media, direct mail, events) to understand which are most effective for various donor segments.

By prioritizing these recommendations and leveraging the existing CRM and data warehouse capabilities, the organization can significantly improve its fundraising performance, enhance donor relationships, and ensure sustainable growth.

Faith Murray

@Joel Weinbach, whew, this is quite a lot to read!!

I would say the bulk of the year-over-year analysis is a no-brainer. The chart is actually easier to read at a a glance to determine that donor numbers and dollar value have grown over time. I would scrap all the text associated with that.

The section called “George's input” is somewhat more helpful when it/he? derives the comment that the data “suggests a successful focus on cultivating major gifts”. This is what you need - something to show why the donations & donors increased over time… what fundraising initiatives worked well and what didn't. I disagree, however, with its concern on donor retention. I'm sure this data table is all fictional, but if it were real, I would say that a small decline (less than 1% of donors) is normal from year to year, and bringing this up as a problem area raises unnecessary alarm.

All the rest of the stuff is extraneous and actually clouds the waters for fundraising staff. This organization does NOT need to do most of what the AI bot suggests. It is already a successful organization, and attempting to grow all the areas in small donations that it suggests will actually detract from the successful efforts happening in its current programs, unless it hires more staff to compensate. As someone who handles both our major gift fundraising and our annual report statistics, the greater takeaways that stand out to me from this chart, that should be brought to leadership's attention, would be that

• Some initiative done in the 2019 year was outstanding in acquiring new donors, and is there any way to replicate that activity in future years?
• Amazingly, almost all of the newly acquired 2019 donors stayed on from 2020 onward (or else the org has been losing and acquiring new donors at an even rate). A quick pull of the number of 2020 first-time donors will answer this question. Then, either the retention strategy is exemplary or else the acquisition strategy is exemplary since 2020, but not both.
• Then, between 2020-2023, major donors were upgraded, with the overall same amount of donors contributing 50% more in gifts. What is happening in donor stewardship that is so successful, and can we continue to grow on that effort?
• Is upgrading happening with just major donors, or with all donors across the board?

The one legit area of concern brought up by the AI is questioning whether the organization is too dependent on major gifts, and will it be sustainable if it loses a couple major donors. Rather than reading through this exhausting text, an easier way to assess that would be to simply pull a list of top gifts. If a single donor has been contributing $10m of the $15m then yes, there's a definite problem. If, however, the top 15% of dollars requires 10-20% of your donor count, then you're on par with other organizations.

Simply put, I think having a fundraiser who is experienced looking at numbers is going to be way more useful than this AI report, which is a bit tedious and gets lost in the weeds.

Joel Weinbach

@Faith Murray
Thanks. That is very helpful. It was intentionally left in its raw, messy form, which may have been a mistake, which is probably why you are the only person who responded to it<g>. I wanted to expose all of the various “ideas” that it/they (three foundational models were used) came up with so judge what percentage of what it created was useful or just noise. Sounds like most of it was noise.

Alex Wong

@Joel Weinbach
I think the issue is the input and output.

You provided the input that is already summarized (something that is not directly available from RE NXT). by providing this summarized table, most can make the various analysis and conclusion (output).

What would be more interesting is input that is much more raw data: constituent, gift, event, event participation, opportunity, etc. Then gett more concrete output that is actionable, such as “this type of event has been having great result (higher and higher percent increase in revenue contribution), should consider investigating this type of event's element to bring to another type of event that is performing poorly, such as XXXX"

Dariel Dixon

@Joel Weinbach I remember having this thought when I first read this post.

This is interesting information and I love the data collection, but it's missing context.

I wanted to delve more into this, but without some context or background, it wasn't very helpful to me.

Joel Weinbach

@Alex Wong
Absolutely. That was just a simple single summary view of some data to try and keep things straightforward. I am using the Ai-powered analysis tool/query generator (not the hacked thing I used to generate that verbose english language analysis) that I used for the table to do more detailed analysis, including things like donor scoring, segmentation based on all the factors you mentioned, some light predictive analysis, and a variety of other summary analysis that I don't think are available through RE.