Learn how to perform an RFM analysis, the simplest tool to start narrowing your prospect list to your most impactful donors. This article contains background information and a video to lead you step-by-step into meaningful engagement.

How do you make the best decisions on how to prioritize your team’s valuable (and limited) time and resources to maximize your effectiveness in cultivating and closing major gifts?

Sharpen your focus on those who have the greatest capacity to give and make sure you are working with your top and most obvious donors first when prioritizing your valuable time. While a seven-figure prospect who has not responded to repeated outreach may still be a long-term relationship to pursue for many reasons, a consistent five-figure donor who is not yet giving at their seven-figure capacity may be a higher current priority for your organization.

Fortunately, data can inform how to segment donors into short, medium, and long-term focus. Examining the intersection between Recency, Frequency, Monetary Value (“RFM”) and wealth screening is the simplest way to start narrowing your prospect pool to focus on those who are both closest to you and have capacity. When those very basic results are combined with relationship mapping and engagement analysis, they form the foundation of a strong plan to increase major gifts.

RFM: What is it and why would we do it?

A Recency, Frequency, Monetary Value (“RFM”) analysis is the scoring of current donors to rank and prioritize your database through three attributes: recency, frequency, and volume of giving. It can help you answer many questions, including: Who has given recently and is with you right now? Who has given over time and demonstrated loyalty to your cause? Who are your top lifetime givers?

Questions to Answer

Before getting started on your analysis, you’ll want to ask yourself the following questions:

How to Perform an RFM Analysis

You have followed along and may be wondering, how exactly does one perform an RFM analysis? Jessica Roberts, Assistant Vice President of Data Analytics at CCS, can help! Jessica has used advanced analytics to advance nonprofit fundraising for over 15 years and has put together a step-by-step guide here: How to Perform an RFM Analysis. For questions about the process or donor analytics more broadly, contact Jessica and CCS’s Data Analytics Team at analytics@ccsfundraising.com.

Wealth Screening: Another Tool in the Quiver

There are many vendors who can screen your data for pennies per name, and many organizations already have access to built-in screening through database subscriptions. While wealth screening is not perfect (every screening turns up a million-dollar donor with low identified giving capacity), it can be very directionally important. The consistent $1,000 donor who gave last year with a capacity to give $1M+ that you never thought about is one ideal outcome of this exercise for short-term focus. Those who screen as high capacity but have limited giving history or are currently unassigned to a portfolio can be reviewed for relationship mapping or discovery meetings to advance long-term goals.

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How can we help you?

CCS offers an array of Data Analytics services to help nonprofit organizations reach their full fundraising potential.