Illinois Institute of Technology Receives National Science Foundation Award to Maximize Nonprofit Fundraising

$350,000 Grant Develops Best Practices in Donor Segmentation for Nonprofit Professionals

Chicago, October 1, 2013 – Illinois Institute of Technology (IIT) was recently awarded a three-year $350,000 National Science Foundation (NSF) Grant as part of a collaboration with Northwestern University to help nonprofit organizations optimize their fundraising strategies by identifying and segmenting donors who are most likely to give. IIT Stuart School of Business Assistant Professor Elizabeth J. Durango-Cohen is a principal investigator.

Durango-Cohen’s proposal is titled “Optimizing Direct-Marketing Strategies in Nonprofit Fundraising: An Integrated Framework for Segmentation, Estimation and Control.” The research team includes co- principal investigator Pablo L. Durango-Cohen, associate professor in civil and environmental engineering at Northwestern University, and David Richardson, assistant professor of entrepreneurship at IIT Stuart School of Business.

Based on her personal experiences donating to nonprofits, Durango-Cohen saw a need for more sophisticated donor segmentation strategies. Many of the organizations that were contacting her were spending a great deal of time on the messaging and design of their solicitations, but not much time identifying more profitable donor segments, customizing messages based on donor data, or optimizing the timing of solicitations. To address this gap, the research team is developing an analytical framework for nonprofits to identify potential donors who are most likely to give based on demographic and behavioral factors.

“We started by looking at segmentation models based on previous giving behavior to understand giving patterns within the donor population,” says Durango-Cohen. “Now, we’re looking at models that will help nonprofits predict the likelihood of individuals to donate and donation amounts, incorporating demographic and survey information to understand how and why people give. Organizations can use these predictions to have more effective interactions with their donors.”

Partner institutions represent several different areas of the not-for-profit sector, including Chicago Public Media, Northwestern University and Lincoln Park Zoo, creating opportunities for broad applications for the grant research.

Durango-Cohen says the ultimate goal is to develop a set of best practices for nonprofits to segment their audiences to maximize revenues raised, and to share these best practices through workshops for fundraising professionals. This research will help nonprofits meet the growing demand for services, and meet donor expectations for more efficiency and effectiveness in fundraising.

About Illinois Institute of Technology

Founded in 1890, IIT is a Ph.D.-granting university offering degrees in engineering, sciences, architecture, psychology, design, humanities, business, and law. IIT’s interprofessional, technology- focused curriculum is designed to advance knowledge through research and scholarship, to cultivate invention improving the human condition, and to prepare students from throughout the world for a life of professional achievement, service to society, and individual fulfillment. Visit www.iit.edu.

About IIT Stuart School of Business

IIT Stuart School of Business is an academic unit of the Illinois Institute of Technology, a private Ph.D.- granting technological university. IIT Stuart offers bachelor’s, master’s, doctoral, and non-degree programs, as well as graduate certificate programs and several interdisciplinary specializations. IIT Stuart’s programs are centered on the concept of strategic competitiveness, a formula that emphasizes creativity, entrepreneurship, innovation, leadership, incisive decision-making, and sustainability. This approach is designed to help students succeed both in today’s competitive global marketplace and in the complex economy of tomorrow. IIT Stuart is accredited by AACSB International. Visit www.stuart.iit.edu.