Using data to drive your nonprofit donations
Donor acquisition & retention are some of the biggest challenges faced by nonprofits.
Fundraising has become increasingly competitive in this digital age and sky-rocketed when the COVID-19 pandemic hit, back in 2020. With fewer in-person events and more virtual campaigns and meetings, the nature of fundraising has totally changed. It is therefore necessary that nonprofits use data to effectively stand out and increase donations.
Chances are, you already have a lot of information about your donors but are not using this data to its fullest potential.
In this article, I’m going to break down 4 tactics to help analyze your available qualitative and quantitative data so you can have a much bigger impact than simply gathering information.
- Assessing donor data
- Identify relevant fundraising KPIs
- Analyzing donor behavior
- Personalize communications
1. Assessing donor data
Not all data is the same. When assessing donor data, it’s important to categorize it into qualitative and quantitative types of data.
Quantitative data is data measured in numbers. It includes metrics like;
Number of new donors. Measuring donors who have given to your organization in the last quarter can help measure growth of the organisation or show the success of a recent campaign.
Number of dormant donors. These are donors who have given to your nonprofit before, but not in the last year. With this data, you need to go ahead and analyze why they stopped using feedback forms or phone calls. From the feedback you receive, you can then determine whether they are lapsed or at-risk donors that can be re-engaged.
Donor retention rate. Understanding the ratio of donors who continue to give to your nonprofit year after year, is crucial. This is a key indicator that shows your growth in impact for your nonprofit.
If your donor retention diminishes, it can be a red flag that your strategies need to be revised. Another way of measuring this is churn rate. If you lose the donors as soon as they give to your cause the first time, then you must evaluate your communication strategies. It’s not that they didn’t want to give in the first place, it’s probably because you did not send that thank you note, or pressured them into giving to another project right away.
Donor journey mapping. How long does it take you to convert a prospect into a regular donor? Where did the donor discover you from? (was it through a campaign on Facebook or through referrals?)
I usually find google analytics most effective because it shows you which web page the user visited first, how long they spent on it, which page they exited, etc. This data helps you improve information on different web pages, give clearer calls to action and overall smoothen the process donors go through to become a part of your community.
Demographic breakdown. Demographics are statistical facts about your donors which include identifying your donors by age, level of income, level of education, ethnicity, gender, and job title.
This data is helpful in segmenting email lists which increases your fundraising campaign success inevitably, for example, donors with a high income can donate to bigger projects such as an emergency operation for an abused girl while donors like students can donate to smaller projects like a child’s meals for a week.
2. Identify relevant fundraising KPIs
Nonprofits need to figure out the metrics that truly matter to their organization and relentlessly measure against them. There are four categories of fundraising KPIs:
Funding KPIs: These KPIs are useful in helping the director of fundraising determine whether the set targets are too high and unrealistic or too low and unambitious.
Amount of money raised vs set target, annual donation amounts received vs set targets, percentage of recurring gifts, and percentage of contributions matched through corporate philanthropy.
Channel KPIs: Nonprofits should measure the effectiveness of the channels used, be it email, social media, or online events. Examples include email opens, clicks, the engagement rate on a campaign promo video. Depending on the nonprofit, you may find that LinkedIn works better in attracting and engaging donors while for other organizations, it’s Facebook. Identifying your strongest digital platform is key in helping you meet your set targets.
ROI KPIs: Ultimately you need to understand the return on investment (ROI) for fundraising to inform future strategies. For example, if you spend $1000 on a campaign but receive only half of the money (donations) you invested, your strategies have to be revised. You ought to at least get back the money you invested even without profits.
3. Analyzing donor behaviour
This is when psychographics come into play. Understanding what projects a donor is interested in gives insight on when they’ll most likely donate. For example, some donors are moved by personal stories about a beneficiary, others want to promote your skills projects while others can be approached for anything.
Gathering data of this nature requires a qualitative research approach in order to get deeper information on a donor. Some of the questions you can use during your research are:
What projects are they interested in?
How do they like to give? (money or in-kind?)
When do they give the most amounts of donations?
Why this project, no the other?
4. Personalize communications
Another way to use data to improve your communications strategy is to incorporate personalization. Once you’ve understood how your donor supports, it is important to communicate in a way that makes them feel more seen, empowered, and appreciated as an individual.
Email marketing has proven quite effective in nailing personalization. It allows you to include the supporter’s first name in the greeting or subject line which increases your opens by 26%
Each thank you email for example should show the donor’s amount and impact it is going to create. i.e “Your generous gift of $400 USD is going to provide 3 pregnant teens in our care with food and clothing for the next 3 months.”
The same applies to impact emails. If you show the donor how much they have given over the years plus their increasing impact, I trust that they will feel motivated to give even more for as long as they can.
There are many metrics to consider — it’s important to be thoughtful about determining what to measure upfront so the data can have a real impact on improving your fundraising efforts.
I hope this article helped erase the fear around words like “data analysis”. Data is your most helpful and ever-present friend.