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Nonprofit organizations should have data at the center of all of their strategies and decision-making. Decisions grounded in data can prevent costly mistakes like sending out direct mail fundraising appeals to unresponsive donors. Not only does having enhanced, flexible data visualization at your fingertips save time and money, but it can create positive donor experiences by helping nonprofits tailor their outreach methods to donor preferences.
For some nonprofits, data analysis is an intimidating, abstract concept. Data analysis platforms can also be costly, and the reports you receive can be hard to derive actionable insights from. But with the right tool, your nonprofit can avoid these problems altogether.
To make the most of your nonprofit’s data, look for a platform like GivingDNA that makes data analysis accessible. Because knowing what to track and look for can be difficult, GivingDNA features the most important metrics for decision-making front and center. In addition to its rich datasets, this tool has crystal-clear reporting features that can help you see patterns and stories in your data. This platform is incredibly easy to use, helping you visualize your data in minutes so you can quickly make fundraising decisions.
To understand the importance of data analytics and how to use your new analytics platform, this guide will explore the basics of nonprofit data analytics:
If you are new to the world of data analytics, it might be hard to conceptualize what the term means or what the data analysis process looks like. Let’s get started by defining data analytics and breaking down which types of data you should be referencing.
In the simplest terms, nonprofit data analytics is the process of collecting data and analyzing it to uncover trends, patterns, and insights that will help guide fundraising strategies.
Within the scope of nonprofit data analytics, there are different types of analytics your organization can use to learn different things. These different types of data analytics include:
These different types of data analysis build on one another, and you can use them to learn different things about your supporter base’s preferences and the next steps your nonprofit can take to expand its operations.
While analytics are key to an effective fundraising strategy, traditional data and wealth screening have some drawbacks. For example, it can be difficult to visualize trends and patterns in large files of data, and traditional wealth screening doesn’t allow you to review your data often enough to catch each important shift in donor behavior. Instead of going the traditional route, go beyond just wealth screening with GivingDNA.
GivingDNA can help your team save precious time and money by:
Think of GivingDNA as more than just a data analytics platform. Instead, this platform is building out a new category, blending the expertise and capabilities of both a data analyst and a fundraiser. By combining your nonprofit’s data with external data points and using algorithms to segment data into ready-to-use lists, GivingDNA can enrich your data, organize it, and prepare it for your next campaign in just a few minutes.
Remember that without data analysis, each step nonprofits take is in the dark. Your organization could be using the perfect fundraising appeal, reaching donors through their preferred communication channels, and targeting the proper segments with personalized outreach without referencing any data—but in reality, this is next to impossible. Even if you feel like you know your donors and their giving motivations like the back of your hand, an influx of new donors with different preferences and behaviors could derail your existing strategies.
Data analytics helps nonprofits identify broad patterns among donors, track changes, and spot opportunities for growth. Whether your nonprofit is focused on growing its annual fund or expanding its pool of major donors, data analytics can help you:
A robust fundraising analytics and wealth screening tool can help you do even more than accomplish basic goals. Look for a tool that makes finding actionable insights and solutions easier, transforming your team into fundraising experts.
Your donors come from varied backgrounds, have different life experiences, and have unique reasons for giving to your organization. Learning more about your constituents and their lives is crucial to understanding their giving DNA. For instance, you might reference metrics like:
While this data might seem basic at first glance, it can give you a wealth of information about your donors. Let’s say you start a relationship with a prospective major donor, and you’re in the process of developing the perfect fundraising ask. Using constituent data, you can piece together how much to ask for, when to make your ask, and which channel to communicate through. Psychographic data gained through the personal conversations you have with prospects can help you uncover what motivates them to give and what they value the most about your organization.
You can also target specific groups of donors by creating segments. Group donors based on factors like giving level, key behaviors, and demographic data to direct personalized communications to each group. This way, you can avoid sending out boilerplate mass messages that don’t resonate with your audience.
Another way to segment your data is by their channel preferences. Knowing the best way to reach donors is key when soliciting gifts. Because outreach can be costly and time-consuming, you want to make sure donors are actually seeing and responding to your messages.
You might discover that donors in the baby boomer generation respond positively to phone calls from your organization, making for high response rates. However, when you contact Generation Z donors over the phone, they tend to dodge your calls. In this case, you’ll need to adjust your strategy for younger donors and switch to their preferred communication channel, like texting or social media outreach.
Reaching out to donors through the channels they prefer can also make outreach feel more personalized. It shows that you’ve taken note of what donors respond well to and that you care about folding their individual preferences into your strategy.
Often, nonprofits with low retention rates channel the majority of their time and energy into recruiting new donors and soliciting large donations just to replace the old ones and stay afloat.
For these organizations, low retention rates are akin to having a “leaky bucket.” But with data analytics, nonprofits can identify the “holes” in the bucket by diagnosing the reasons why some donors slip away. Then, your nonprofit can begin to develop solutions that meet your donors’ specific needs and preferences to plug the holes in your leaky bucket.
Like identifying prospective major donors, it helps to be proactive when improving donor retention rates. Start by identifying the donors who are at risk of lapsing and implementing strategies that call them back to your cause. The process of reactivating donors at risk of lapsing might look like this:
If your organization is currently making improvements to its retention strategies, consider using your fundraising analytics tool to find upgrade opportunities as well. Pinpoint the most loyal donors who regularly give to your organization and have the means to contribute more. Reach out to these donors to can begin conversations about upgrading them to a higher donation level.
Nonprofit wealth screening helps you learn more about your donors’ capacity to give, giving you an idea of what they are likely to contribute or what amount they might be comfortable upgrading to.
To get a basic measure of your donors’ wealth, reference wealth markers. These markers are the characteristics your current and prospective donors have that communicate their financial giving capacity. Some common wealth markers include:
Keep in mind that there are many other factors to consider when conducting wealth screenings, and simple wealth indicators won’t tell you everything you need to know about major donors. For example, two donors with the same household incomes might have vastly different discretionary spending budgets due to lifestyle or geographic differences. However, these wealth markers can give you a good idea of whether a prospect will be able to help you meet your fundraising goals based on your estimate of their giving capacity.
When your nonprofit leverages data analytics, you can quickly find the insights you need to drive powerful results at your organization. It can take a trained eye and years of experience to track down the actionable insights hidden in your raw data files, so find a data analytics tool that does the heavy lifting for you.
Consider investing in GivingDNA to reap the benefits of its robust, all-in-one fundraising analytics platform. To discover how GivingDNA can bring you the insights you need to gain a deeper understanding of your donors, schedule a demo today!
Check out these additional resources to learn more about data analytics for nonprofits: