Non-profit Charities

What should leaders decide before buying more donor data?

A charity facing slower growth may be offered a prospect list, a segmentation model, a matching campaign or a new digital channel. None answers the underlying question by itself: why is giving below the organization’s needs, and which intervention would improve the position? A richer profile does not establish willingness to give, and a high predicted response does not show that a solicitation caused the gift.

Arcus’s central thesis is that fundraising investment should be evaluated through additional contribution, donor trust and delivery capacity. Predictive profiling and causal testing answer different questions. Research can help identify promising audiences and messages; an appropriate comparison is needed to estimate what changes because of the intervention. This is original Arcus analytical synthesis, not a claim of new empirical research or guaranteed campaign returns.

This distinction matters most when money or staff time is scarce. It does not imply that every major-gift relationship can be evaluated through a randomized trial. For small samples or long-cycle campaigns, use proportionate evidence, documented assumptions and explicit decision gates rather than false statistical precision.

What does fundraising research actually show?

Karlan and List’s 2007 field experiment used direct mail to more than 50,000 prior donors of one US nonprofit. Offering a match increased response and revenue per solicitation, but larger matching ratios did not add an effect relative to the smaller ratio tested. The result supports testing the offer rather than assuming a more generous match must perform better. It is not a benchmark for Canadian charities, new prospects or digital campaigns.

Gneezy, Keenan and Gneezy’s 2014 Science study combined a laboratory experiment with a field experiment involving 40,000 potential donors. In that setting, communicating that an initial donation covered overhead raised giving relative to the seed and matching approaches tested. The study does not show that overhead disappears or that the message improves long-term donor relationships. Its authors also identify unanswered questions about broader giving and possible reinforcement of overhead aversion.

The Canada Revenue Agency’s fundraising guidance, CG-013 explains that a fundraising ratio is one indicator, not a definitive evaluation, and recognizes that donor-development returns may arise in later periods. This is regulatory guidance, not evidence of fundraising impact or approval of a particular campaign. Registered charities should assess their circumstances against the applicable requirements with appropriate professional advice.

Together these sources justify a careful management question: which mechanism changes donor behaviour, at what cost and with what consequences? They do not establish a universally superior appeal, donor segment, overhead ratio or fundraising channel. Local evidence is necessary.

Worked example: why campaign revenue is not incremental value

Suppose a fictional charity gives 10,000 comparable eligible donors an enhanced appeal and retains another 10,000 under the usual approach. Over an agreed period, the enhanced group gives $60,000 and the comparison group gives $45,000. If assignment was valid and the groups remained comparable, the estimated additional receipts are $15,000—not the full $60,000.

If the enhanced approach costs an additional $12,000 to deliver and requires $4,000 of additional fulfilment and stewardship expenditure, the estimated net incremental cash contribution is negative $1,000. The charity could still learn something valuable or choose to invest for a longer relationship horizon, but it should describe that choice explicitly.

The numbers are illustrative, not Arcus client findings. A defensible test needs adequate sample size, consistent measurement, attention to uncertainty and controls for overlapping communications. If it shifts gifts from a later appeal into the test period, short-term uplift may overstate the longer-term gain. Donor retention and future contribution should be measured before assigning them a lifetime value. Matching funds require their own accounting; do not count committed money twice.

How should a charity implement and measure the choice?

Agree the leadership decision, funding horizon and measures with development, finance, program and operations leaders. Reconcile gift records, restrictions, campaign costs and donor definitions. Separate one-time gifts and unusual events from recurring performance. Small samples and incomplete records should narrow the claim rather than encourage elaborate modelling.

Before using a new dataset, document its provenance, permitted use, age, coverage and limitations. Confirm the applicable privacy and communications requirements with qualified advisers. Avoid inferring sensitive characteristics or individual giving intent from postal-area averages. Research participants and donors should be treated as people with preferences, not simply as targets.

Define a proportionate test or feasibility process. Where random assignment is feasible, agree the usual-practice comparison and prevent avoidable contamination. Where it is not, document selection differences and alternative explanations. Set a budget, owner, follow-up period and stop or adaptation conditions before reviewing the results.

Evaluate gross receipts, estimated additional receipts, net contribution, donor continuation, complaints or opt-outs, fulfilment quality and workload as appropriate. Finance should reconcile the management analysis with required reporting without assuming the two use identical cost definitions. A campaign can meet a revenue target while creating an unfunded delivery obligation.

Expand only after examining whether the mechanism worked and whether the result can transfer to the next audience or scale. Training, system integration, clean records and additional relationship-management capacity may be prerequisites. A positive small test is evidence for a decision, not a promise that every subsequent campaign will perform similarly.

Discuss the fundraising decision you need to make

Tell Arcus the funding objective, decision date, donor groups involved and the evidence currently available. We can define a focused donor-research, fundraising assessment or operating review. Start with a general description rather than identifiable donor records.

Related support includes nonprofit research, program evaluation and organizational review. Relevant experience is presented in the central consultant directory.

Retained historical client context

The following retained case, testimonial and collective-experience examples describe broader consulting work. Quoted roles and organization names are historical. They are not evidence of fundraising outcomes or endorsements of the new diagnostic.

Client Case study: 

Arcus helped Telefilm Canada with a Change Management Strategy linked to a Technical and Manufacturing Skills Program (TMS) anda Business Improvement project .  The organization managed the human change associated with this initiative to mitigate risks in terms of stakeholder engagement, adoption and performance sustainability.

Client testimonial: Mr. Peter Flattery, CEO, Healthcare Insurance Reciprocal of Canada

“Needless to say, there are many firms that provide research and strategy consulting services, but few can deliver the value demonstrated in performing the  scope of analysis, strategies, product evaluations and practical recommendations.”

Service coverage

The variety, breadth, and depth of the projects where Arcus can be a resource are made unique by each client’s specific needs. By providing a very small sample of projects we’ve completed, we can help you understand how and when to use our services. Visit the links below to find out more about a specific problem or opportunity you would like to address.

• Growth and Strategy
• Human Resources
• Transformational Change
• Non-Profit and Public Sector

Sample projects in the public sector

• Learning Needs Assessment: Educate staff and management on change and to assess their ability to adapt to a new environment
• Transition Strategy: Develop and implement a transition strategy for the Client to assume a much wider mandate and a tripling of their Human Resources and to coach the Management team.
• Organizational Knowledge Management: Manage the human change associated with this learning initiative to mitigate risks in terms of stakeholder engagement, adoption and performance sustainability.
• Corporate Mission and Vision Development: Develop a vision for the future of this division and an action plan to achieve this vision.
• Current and Future Organization Assessment: Describe the preferred future and to develop learning plans to get there and to solve current operational problems.
• Training and Coaching Strategy: Develop and implement a training and coaching strategy for the new communications managers in order for deal with change.
• Arcus partner Pinnacle Group’s processes are featured in a Harvard Business Review article on business process re-engineering at Volkswagen of America. Read more.

Collective experience

• Fanshawe College
• Government of Ontario
• Department of Fisheries and Oceans
• Department of Foreign Affairs
• Department of Indian and Northern Affairs
• Department of Justice
• Department of National Defense
• Department of Natural Resources
• Department of Public Works
• Department of Transport
• Electricity Sector Council
• Environment Canada
• Government of Jamaica
• Human Resources Canada
• Industry Canada
• Natural Resources Canada
• Public Administration of Brazil
• Public Sector
• Public Works
• Revenue Canada
• Telefilm Canada
• Textiles Human Resources Council

Original donor-analysis illustrations

These original visuals are retained for continuity. Their presence does not verify the age, availability, accuracy or predictive performance of an underlying product; any proposed analysis requires a current scope and data assessment.