Philanthropic organizations often rely on contributions from individuals to finance
Philanthropic organizations often rely on contributions from individuals to finance the work that they do, and a national veterans’ organization is no exception. The Paralyzed Veterans of America (PVA) was founded as a congressionally chartered veterans’ service organization more than 60 years ago. It provides a range of services to veterans who have experienced spinal cord injury or dysfunction. Some of the services offered include medical care, research, education, and accessibility and legal consulting. In 2008, this organization had total revenue of more than $135 million, with more than 99% of this revenue coming from contributions.
An organization that depends so heavily on contributions needs a multifaceted fundraising program, and PVA solicits donations in a number of ways. From its website (, people can make a one-time donation, donate monthly, donate in honor or in memory of someone, and shop in the PVA online store. People can also support one of the charity events, such as its golf tournament, National Veterans Wheelchair Games, and Charity Ride. Traditionally, one of PVA’s main methods of soliciting funds was the use of return address labels and greeting cards (although still used, this method has declined in recent years). Typically, these gifts were sent to potential donors about every six weeks with a request for a contribution.
From its established donors, PVA could expect a response rate of about 5%, which, given the relatively small cost to produce and send the gifts, kept the organization well funded. But fundraising accounts for 28% of expenses, so PVA wanted to know who its donors are, what variables might be useful in predicting whether a donor is likely to give to an upcoming campaign, and what the size of that gift might be. On your CD is a dataset Case study 1, which includes data designed to be very similar to part of the data that this organization works with. Here is a description of some of the variables. Keep in mind, however, that in the real dataset, there would be hundreds more variables given for each donor.
Let’s see what the data can tell us. Are there any interesting relationships between the current gift and other variables? Is it possible to use the data to predict who is going to respond to the next direct-mail campaign?
Recall that when variables are highly skewed or the relationship between variables is not linear, reporting a correlation coefficient is not appropriate. You may want to consider a transformed version of those variables (square roots are provided for all the variables concerning gifts) or a correlation based on the ranks of the values rather than the values themselves.
Write a report of what you discover about the donors to this organization. Be sure to follow the Plan, Do, Report outline for your report. Include a basic description of each variable (shape, center, and spread), point out any interesting features, and explore the relationships between the variables. In particular you should describe any interesting relationships between the current gift and other variables. Use these questions as a guide:
• Is the age distribution of the clients a typical one found in most businesses?
• Do people who give more often make smaller gifts on average?
• Do people who give to other organizations tend to give to this organization?
Describe the relationship between the Income and Wealth rankings. How do you explain this relationship (or lack of one)?
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