A Markov analysis of fund-raising alternatives

This study explores the strategies of fund raising for a nonprofit organization to maximize net income. The giving pattern of the members of the organization was modelled as a Markov chain.

A mailing test was conducted to examine one alternative with inconclusive results. The remaining alternatives were analyzed using Howard's Value-Determination Policy-Improvement method and the optimum strategy was found. Some parameters were varied to investigate the sensitivity of the solution to changes.

The study is an application of a modern analysis technique to an area not usually associated with analytical methods.