2008 DMEF Customer Lifetime Value Modeling (Task 2)

We describe our approach for predicting individual donor's total gift amount over a two-year target period. We divide the donors into 8 segments; for each segment, we fit a logit model for predicting the probability of giving, and a log-linear model for predicting the amount of gifts conditional on a donor giving. We found that recency, frequency, and first gift amount are good predictors of the probability of giving, while time-weighted total gift amount in the past years is a good predictor for future gift amount.