Holiday Analytics: Maximizing Charity Auction Donations
December marks the biggest month for charitable giving, with 18% of donations throughout the United States given during this month. Whether it be donating at the local supermarket, donating at your favorite thrift store, or donating toys to those in need; we as a Nation donate billions of dollars each year. This inspired me to use Ki to analyze some of the copious amounts of charity/donation data out there.
I decided to do an analytics project involving charitable giving, specifically increasing the percentage of the amount donated to charity from charity auctions. The project is based around open source data that focused in on online auction sites, the data can be found here.
For those that do not know how these auctions work, someone lists an item at the auction then after the item has sold, they decide how much they want to donate to charity. This type of auction is very common and is similar to EBay’s PayPal Giving Fund.
So I took the data and put Ki to work!
Target: Maximize the percentage the seller donates of their proceeds to their charity of choice
Insights and Findings
There are three insights Ki points out that are interesting and impactful to increasing the percent of the proceeds donated.
The first finding was something very interesting and something I would have never have thought of. That Saturday is the lowest day for charity contributions, with about 12.7% of proceeds going to charity and about 10% of all items selling on Saturdays. Perhaps the bill from Friday night is more than anticipated by the seller and it makes them reconsider the percent they donate!
The next finding determined that items that sold for $75 or higher have lower a percentage of proceeds donated. The percent donated decreases until about $210. Therefore, if the price of the item is between these two numbers then only 13.4% of proceeds goes to charity. Trying to get out of this “danger zone” would be beneficial to increasing the donation amounts for the auction sites.
The final insight was the most interesting to me, regarding the shipping fee associated with purchasing the item. When the seller makes the sale, they will be assessed fees including a shipping fee. Ki told us that when this shipping fee is $9.70 or more, then the average percentage of proceeds donated is only 12.4%. However, when the shipping fees are under $9.70, the percentage donated is pretty much doubled at an average of 24.5%.
Now it’s time to simulate an action plan! After Ki finds these insights, and we have evaluated the ones that are most easily deployable/generate the most impact, we can use Ki’s simulation functionality to create that deployable action plan. Let’s dive into each feature…
Let’s start with those bad Saturday numbers:
Well this one seems pretty easy, since we know that Saturdays don’t do so well for us, let’s move that marketing budget that we spend on Saturdays and shift that to Sunday which is a much higher percentage day (apparently people feel more generous then). On the other hand, if we want to get really strategic, maybe we limit the number of auctions that can end on Saturday? Wouldn’t that be wild? Give users 8-day auctions if they start on Saturday?
Next up let’s consider that sweet spot of less than $75 and greater than $210:
So here, maybe we add some special marketing or promotions for power tools, electronics, and Automobiles to try and increase those higher than $210 auctions, at the same time we push some promotions around office equipment, kitchen appliances, and pet supplies. Those items typically sell for less than $75. We don’t want to prevent those $75 - $210 items from being listed but we don’t need to promote them as heavily!
And finally let’s come up with a plan to take advantage of what we know about shipping:
If I know shipping is going to cost me as a seller, then I am less likely to give 100% to our charity. What if we offered $6 in shipping credit? Easing the shipping concern from the customer should help us increase our portion of the amount that gets donated. We should simulate this to see if this new promotion (which would be expensive) is worth the investment. Because If we can increase our portion of contributions on items that auction at/above $210 by just 3% or more, then the $6 shipping credit makes perfect financial sense.
When we simulate the impact of offering a $6 shipping credit, we see that this will increase charitable donations by 8.8% of total amount sold. While $6 in shipping credit to all orders only costs us 3.9% of total amount sold. A growth in donations of 4.9%!!!!!
Ki shows that our strategy is well worth the money and a great way to improve. In fact, when we start to mix and match our strategies of limited auctions ending on Saturdays, targeting our sweet spots and offering that $6 shipping credit, we are seeing as much as a 11.2% growth on charitable giving overall. That is huge!
The moral of this holiday analytics story is to get into the season of giving, I know I am! If you’d like to check out a personal demo of how this analytics project was run through Ki, request a demo. And of course, take a moment this season to give to your favorite charity. Here are a few of our personal recommendations:
Happy holidays from Team Ki!
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