Fundraising data analytics – mining the gold in your own backyard

Fundraising data analytics – mining the gold in your own backyard

Fundraising data analytics is becoming more popular – and more necessary in today’s philanthropy marketplace.

We hear about it, we read about it, we think about it more than ever. Nicole Wallace at The Chronicle of Philanthropy wrote a terrific piece this week, ‘Fundraisers Reap Millions by Using Data Gold Mine’. Fundraising data analytics is the equivalent of mining the gold in our own nonprofit backyards.

Admittedly, for many of us in the sector, the very mention of ‘data analytics’ sounds intimidating. It’s a show-stopper. Well, our best advice is “Don’t let the show stop!”

What is fundraising data analytics?

Data analytics is the process of discovering meaningful information and patterns from data.

So, add the term ‘fundraising’ and you understand that we are talking about donor or constituent related data that helps us to understand who our prospective donor is and how we can develop the best relationship possible in order to maximize giving over the course of a campaign or a lifetime. Sounds worthwhile, right?

Side note: With data analytics, we have entered a world of donor data jargon – data warehousing, data mining, big data, etc. As a helpful reference, please visit our Donor Data Management Dictionary
Why is fundraising data analytics important?

Fundraising data analytics is VERY important. We cannot stress this point enough. Why? Because it gets us out of a box – our of our comfort zone – where we treat all donors and constituents the same. Data analytics enables us to understand our donors much better – their needs, their interests, and their willingness to support our missions. And today’s nonprofits must do this in order to survive and grow.

Think about your current fundraising plans and campaigns. It is so easy for us to develop one message for a campaign, mailing or communication, and to send that message to everybody in our contact database – every address, every email gets our “Dear Sally, we’d like to tell you about our newest opportunity to support our mission” appeal.

And we wonder why retention rates are falling, and why donor acquisition efforts fail too often.

What do to?

Your donor database is a gold mine. And if you are like many of our clients, you have more than one. The challenge is in understanding what the data is trying to tell you.

Giving patterns, gift potentials, areas of interests and demographics represent starting points for analyzing your database. There’s plenty more data available. Social media, visitor traffic on your website, event attendance add to the mix. Augmenting your database with third party big data sources can also bring value to your effort. In fact, many nonprofits today are building a data warehouse – free of the confines of their CRM platform – where they can store, cross-reference and mine much larger data sets for the purpose of fundraising data analytics.

With a solid data set in hand, the process of data segmentation begins – building profiles of target donor types, then organizing your donor database into groups representing each type. Study, re-think, revise. Then begin testing new targeted messages to reach targeted donor segments.

What can smaller organizations do?

This is starting to sound complicated and laborious, I know. And that can scare off the smaller organization that thinks they don’t have the time or resources to build a data warehouse or mine a donor database. Nicole’s Chronicle article provides a number of great examples of nonprofits successfully apply data analytics to achieve greater fundraising success, but all of these examples represent large, national nonprofits. So what can the rest of us do?

The answer is plenty.

At a minimum, your data needs to be assessed, cleaned, possibly enriched, then analyzed. Donor segmentation doesn’t have to be a complex effort requiring a database of half a million records. Start with just a few segments in mind. Improve your data collect processes in order to improve both data quality and data quantity.

Then begin targeting groups of donors and prospective donors with a fundraising plan and messaging that speaks to their needs and interests, not just yours. Perhaps a special three-month campaign to win back lapsed donors. Then a donor acquisition appeal that targets just two or three donor segments.

At the end of the day, after all the fundraising data analytics, this is what the Chronicle article boils down to – reaching the right individuals with the right messages, presenting the best opportunities to fully engage over the longest possible period of time.

That’s how we start mining the gold in our own fundraising backyards.

Learn more

This month, we are co-hosting an upcoming webinar with 2Dialog, a leading provider of multi-channel fundraising technology, including donor segmentation specialization. You are invited. The event addresses how we better align fundraising strategy, technology and data to ensure greater fundraising success. We will explore topics such as data segmentation, targeted communications and the use of data in fundraising.

Please join us!

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About Gary Carr

Gary is the founder and president of Third Sector Labs. With more than 20 years of experience delivering software and data solutions to a wide variety of clients, Gary turned his attention to the overwhelming problem of data. Third Sector Labs is committed to making sense of data for the nonprofit industry.

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