Nonprofits no longer rely solely on traditional fundraising methods to secure the resources they need to make a difference. Instead, they are turning to the power of data and analytics to drive fundraising efforts forward.
In this guide, we’ll explore the ins and outs of data analytics for nonprofits. Whether you’re a seasoned fundraiser evaluating past efforts for a fundraising assessment or new to the world of nonprofits, these insights will help you turn data insights into dollars that support your mission.
Segment donors for personalized appeals.
Personalizing your communications with donors makes them feel seen and valued for their individual contributions to your nonprofit. But how can your nonprofit uncover more personalization opportunities?
Using a fundraising analytics tool, you can leverage both first-party and third-party data. First-party data is collected directly from your supporters and can include metrics like giving behavior, engagement with your website and other communication channels, and contact information. Third-party data is any information you obtain from sources outside of your organization, typically sourced from very large audiences (e.g., supporters of your cause from across the country).
These data sources work together to provide a comprehensive picture of your organization’s supporters and larger patterns in the space. Use your findings to segment donors based on shared traits, and use the segments to create personalized experiences for each group. GivingDNA recommends starting with five common categories: demographics, psychographics, giving behavior, communication preferences, and engagement level.
Here’s how to target donors based on these categories:
- Demographics: Socioeconomic traits like age, gender, and income impact individuals’ experiences and how they want to interact with your nonprofit. Speak to each segment’s interests and values. For example, if you provide free tutoring to children in need, you might create age-based segments to appeal to parents and grandparents separately.
- Psychographics: These traits relate to the donor’s lifestyle, hobbies, interests, and values. Highlight the ways that supporting your nonprofit aligns with those values or interests—an avid hiker, for instance, appreciates nature and would be willing to give to your conservation project.
- Giving behavior: Sort donors based on their average gift size, gift frequency, whether they participate in your monthly giving program, or preferred donation methods. Tailor the amount you request to their average donation size, promote upgrade opportunities to generous supporters, and share recurring giving opportunities with regular donors.
- Communication preferences: Do donors prefer email, direct mail, phone calls, text, social media, or another channel? Make sure to reach out to them through the channel they use most to ensure they see and engage with your messages.
- Engagement level: Assess how deeply supporters are involved with your organization (e.g., making one gift a year versus volunteering weekly). Consider creating segments for active, occasional, and passive engagement. Active donors may be invited to join a leadership committee while passive donors receive brief updates about your work a few times a year.
In addition to using these segments to send targeted messages and appeals to your supporters, consider making simple adjustments like greeting them by name as well. These small changes make communications feel more genuine, inspiring more donors to take action.
Enhance internal and external prospecting tactics.
Prospecting is used to identify potential major donors both inside and outside of your organization. Keep in mind that it may be easier to gain the support of prospects within your existing donor pool because they already have a connection with you and have shown a commitment to your cause.
When looking internally, consider donors who have a larger average gift size, donate frequently, attend your events, and engage with fundraisers. If you are searching for major donors outside of your existing supporters, you might start with board members and major donors of similar causes.
Traditionally, prospecting requires your team to search through online databases, social media profiles, and publicly available financial records to uncover:
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- Wealth markers: Analyzing wealth indicators, including net worth, real estate ownership, and stock holdings, can reveal an individual’s financial capacity to give.
- Affinity for your cause: Determine whether the prospect has a personal interest in the cause through interviews and their past behaviors. For example, political affiliations and donations can be indicative of their values.
- The likelihood they’ll make a major gift: Gauge the likelihood a prospect will make a major donation to your organization by evaluating their commitment to other causes. Look for propensity or habit markers such as donations to similar nonprofits or board membership with another organization.
Remember that securing new major donors can significantly impact your fundraiser and the overall health of your nonprofit. As the Pareto principle asserts, 80% of funding is contributed by the top 20% of donors. While this exact ratio may not be true for your organization, your top donors likely play a disproportionate role in your success.
Measure campaign ROI and adjust fundraising strategies.
After a fundraising campaign ends, work with your team to evaluate what worked well and what didn’t. According to NPOInfo’s guide to nonprofit data collection, you should start with metrics like conversion rate, return on investment (ROI), average gift size, and donor retention rate.
Using these metrics, your nonprofit can:
- Assess whether you met your goals. At the beginning of each fundraising campaign, your nonprofit should set clear, measurable goals, such as raising a certain amount of money or reaching a specific number of new donors. Campaign data allows you to determine whether you fell short of, met, or exceeded the goal. This will help you set goals that are ambitious yet achievable in the future.
- Identify new opportunities. Did your campaign help you make new connections, reach a different audience, or unlock a new revenue stream? Make note of ways to capitalize on these opportunities. For example, perhaps an organization that delivers meals and groceries to the elderly usually gets support from individual donors in the community, but a recent campaign also caught the attention of local restaurants. This opens the door for future sponsorships and CSR initiatives like volunteer grants.
- Pinpoint areas for improvement. Take a more granular approach to see how specific strategies panned out during the campaign. If a particular email in your marketing campaign performed much worse than others, identify whether the subject line, content, timing, or another factor impacted its performance. Keep these considerations in mind for your next campaign.
Remember that you don’t have to wait until your campaign ends to evaluate these metrics. Checking your progress toward your goal during the campaign will tell you whether you’re on track to meet your goal and give you time to make adjustments that carry you across the finish line.
As you move forward, remember that the world of data and analytics is ever-evolving. Continue to explore new techniques and stay ahead of emerging trends. With a commitment to data-driven fundraising, you will be well-equipped to both sustain and expand the impact of your organization’s vital work.
