Analysis of factors influencing recurring donations in a university setting: A compound poisson mixture regression model

We present a Compound Poisson Mixture Regression model of the joint distribution of transaction frequency and monetary value, and apply it to study alumni donations at a university in the USA. The model captures covariate effects, recognizing that both response variables emanate from one statistical...

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Bibliographic Details
Published in:Journal of business research 2022-11, Vol.151, p.489-503
Main Authors: Bao, Jingyuan, Durango-Cohen, Elizabeth J., Levontin, Liat, Durango-Cohen, Pablo L.
Format: Article
Language:English
Subjects:
Charitable giving
Compound poisson
Frequency and monetary value
Mixture regression
Recurring transactions
Segmentation analysis
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Summary:We present a Compound Poisson Mixture Regression model of the joint distribution of transaction frequency and monetary value, and apply it to study alumni donations at a university in the USA. The model captures covariate effects, recognizing that both response variables emanate from one statistical unit — a donor. Heterogeneity, group-level factors, and other features of the data are captured through coefficients that vary between segments. The data in the study are transaction records for the 2000–2016 period, and a survey conducted in 2017. Despite including subjective factors from the survey, the results suggest that between-segment differences are unobserved. Heterogeneity is manifested in covariates, including subjective factors – psychological distance, perceptions of donation impact, willingness to volunteer – displaying stratified effects on either transaction amounts, frequencies, or compound effects on both variables. Characterization of such effects supports the development of tailored fundraising/marketing strategies aimed at increasing donor retention and lifetime value. •Model effect of covariates on joint distribution of transaction frequency and monetary value.•Analyze transactions and segment donors to a private, research university in the Midwestern US.•Data include donation/individual records and a survey to gauge alumni experiences and feelings.•Results show clear distinctions between recurring and sporadic donors.•Recurring donors respond to (changes in) perceptions of connectedness and of donation impact.
ISSN:0148-2963
1873-7978
DOI:10.1016/j.jbusres.2022.07.026