If you haven’t had your data base screened, or your screening vendor doesn’t provide a total RFM figure, you can, with a little work, do it yourself. Here’s how.
CAVEAT: before doing this, remove any existing planned givers from this exercise.
- Export your data into Microsoft Excel
- Rank all constituents by Recency (limit to five years of giving history).
- Divide the total by 5 – this will give you the number of records to score in each “quintile” or 1/5th of the file
- Assign the top 1/5th – those who have given most recently – the number “5” or the designation “Very High”
- Continue assigning each quarter of the file a number until you get to the final 1/5th with the most distant gift date and assign these the number “1” or the designation “Very Low”
- Repeat these steps by ranking all records for Frequency (number of gifts in a 5 year period – excluding pledge payments, monthly credit card payments and other anomalies)
- Repeat these steps for Monetary represented by the total giving (again, over a five-year period).
- When you have three columns (Recency, Frequency, Monetary), then name a column “Total RFM Score,” and add up the individual scores from the R, F and M columns. This is your Total RFM Score
You can then cross tab by giving capacity and RFM to create a reasonable predictive guide to your best planned givers.
For the annual fund, use RFM as a proxy for likelihood to make another gift. Donors with the highest RFM are the most likely to both give again and increase the amount of their gift.
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This chart represents how segmentation can be done according to RFM levels (very high through low) corresponding with giving capacity derived from a wealth screening.