Fundraising without donor data: What’s that proverb about giving a man a fish?

Fundraising without donor data: What’s that proverb about giving a man a fish?

Most charities raise money from many different sources – direct mail appeals, online donations, events, workplace giving campaigns, and matching gift programs to name a few. How often do the funds come in without usable donor data – or any donor data – behind it? If your organization is fundraising without donor data to support it, then you have a problem that needs your attention.

It is time to manage that problem and reduce risk.

What’s that proverb?

We have all heard the proverb:

Give a man a fish, you feed him for a day. Teach a man to fish and you feed him for a lifetime.

So what’s it got to do with fundraising, you ask? I’m glad you asked.

Receiving a gift with no donor data behind it is like being given a fish. You can eat today, but you can’t plan for tomorrow. For tomorrow, you need data … donor data.

Fundraising without donor data occurs often. We can’t avoid it. In some cases, we are referring to those anonymous gifts, wonderful gestures on the part of the donor. But those occasional gifts aren’t the problem. The problem lies where we could get gathering the necessary data we need to run our organization but we fail to do so. And that represents a big risk.

All businesses and organizations need to develop predictable revenue streams. For charities, if you don’t know where your donations come from – if you don’t have the data behind the donation – then your revenue is (at least partially) unpredictable. That is a problem.

Undocumented gifts can come to nonprofits through a variety of sources. Some of these include:

  • Workplace giving programs like United Way and Combined Federal Campaigns.
  • Online donations
  • Mobile giving and text-to-give programs
  • Cash collected at events

Working with a client recently, we were drilling down on the data behind various fundraising sources. Our client took it as a given that lots of money came into the organization through “anonymous” donors. Our question was this:

Are your donors truly anonymous, or are you just not making the effort to collect data properly?

The question challenged our client’s established way of doing things. Once we got past that uncomfortable moment, we opened the door to opportunities to both reduce fundraising risk and improve fundraising results … through better data.

Side note: While we are on the topic of anonymity, let’s not confuse a total absence of donor data with recognition privacy. There will be plenty of occasions where you obtain the appropriate level of donor information, but agree to respect donor privacy. 

Two examples

There are things you can do right now to improve donor data collection related to those undocumented gifts. Lets look at a couple of examples.

Workplace giving programs like United Way and the Combined Federal Campaign are a source of needed unencumbered funds to many charities. The “price” for unrestricted cash flow is assumed to be anonymity. But are those donations always really anonymous? You need to find out. Steve Greenhalgh of AmeriGives Consulting has been advising large charities and leading corporations for years about workplace giving. He sums up the predicament this way:

Yes, it is true that many donors like to give through the workplace because they can give without their personal information being released to charities. But often, it’s the United Way that is protecting or preventing access to the donor data. The United Way and the recipient charity are stuck in a tug of war over ‘whose donor is it?’ In those cases, both sides lose. Sometimes it is the company’s workplace campaign vendor that is responsible for the problem – making it difficult to retrieve donor data, or only supplying a fraction of the data you need. All parties in the industry need to work together to encourage sharing of information in order to improve communications with and transparency to the donor.

We at Third Sector Labs agree 100% with Steve. Charities, fundraising federations and corporate workplace giving program sponsors who work together to improve donor communications and gift transparency will encourage more people to give.

In our second example, let’s look at online giving. I can’t tell you how many times we have run across charities that allow anonymous giving on their website. While this is less common today than it was 10 years ago, it is still a problem. Let’s put the stake in the ground here and now. If you allow anonymous giving on your website, STOP. It can put your organization at risk because you have no audit trail for an electronic transaction. Quite frankly, it’s lazy. And perhaps most importantly, you need the data to help you plan your next fundraising appeal.

Give up the occasional online anonymous donor in favor of the ones who want to connect with your organization and with whom you now have a chance of developing a relationship.

Solutions and conclusions

So, you are reading this blog and you recognize the problem. Now you want to explore solutions. There are a number of techniques and best practices that can be implemented through your giving technology to help you gather more complete donor data. It starts by analyzing the data you get vs the data you need. Map it out, look for the gaps, and develop tactics to close those gaps. Perhaps you need a new CRM. Perhaps you need to make improvements to your website or your online donation forms. Perhaps your workplace giving strategy and partnerships need revisiting.

Don’t settle for less. Of course you won’t always be able to get all the data you want. Still, fundraising without donor data is a problem you can work on, and a business risk you should reduce.

Good luck, and let us know if we can help!

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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