Data should be at the center of all of your nonprofit organization’s strategies and decision-making. Not only does having enhanced, flexible data visualization at your fingertips save time and money, but it also creates positive donor experiences by helping your nonprofit tailor its outreach methods.
To make the most of your nonprofit’s data, choose a platform like GivingDNA that makes data analysis simple and accessible. In addition to its rich datasets, GivingDNA has crystal-clear reporting features that help nonprofits see patterns and stories in their data. With these user-friendly tools, you can visualize your data to 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:
- What are nonprofit data analytics?
- How can nonprofits get the most out of data analytics?
- How can data analytics benefit nonprofits?
- What are some important data points for nonprofits to reference?
Let’s get started by defining data analytics and breaking down which types of data you should be referencing.
What are nonprofit data analytics?
In the simplest terms, nonprofit data analytics is the process of collecting data and analyzing it to uncover trends, patterns, and insights that will 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:
- Descriptive data analytics. Descriptive analytics use both current and historical data to identify trends and patterns. This is the simplest type of analytics and answers the question, “what happened?” This might involve using engagement data like website traffic to understand when supporters visit your site.
- Predictive data analytics. This type of analysis uses data to predict what might happen in the future. Based on the data your organization already has, you can forecast the outcomes of possible scenarios. For example, you could create a strategy that targets your supporters’ behavior patterns by ramping up fundraising efforts during the end of the year when giving peaks.
- Prescriptive data analytics. This type of data analytics is more complex, typically relying on machine learning to choose the absolute best course of action based on your data. An algorithm can consider all relevant factors, specific parameters, and risks and benefits of potential solutions, helping you choose the best possible action to optimize your fundraising outcomes.
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 actionable next steps to expand your nonprofit.
How can nonprofits get the most out of data analytics?
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. Traditional wealth screening processes don’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:
- Screening more frequently. Traditional wealth screenings are only done once every three to five years, meaning your organization could miss crucial fundraising opportunities. However, GivingDNA allows you to screen whenever you like and recommends screening about once a month.
- Referencing both internal and external data. External, appended data, like your donors’ stock holdings, is valuable because it gives you more context into your donors’ lives and their giving capacity. By combining this third-party data with internal data about how donors interact with your nonprofit, GivingDNA can help you take full advantage of your data.
- Featuring suggested segmentation. Segmenting donors by shared characteristics (like demographic details or household income) can help you target your most valuable donors more effectively. GivingDNA suggests segmentation that will help you quickly identify those donors and which strategies will help you reach them.
- Highlighting a multitude of attributes and data fields. Traditional datasets aren’t always detailed enough to give you a full picture of who your donors are and why your mission matters to them. With GivingDNA, you can view a wide range of different data points that give you more accurate insights, especially for high net-worth donors.
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.
How can data analytics benefit nonprofits?
Without data analysis, nonprofits are operating in the dark. 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:
- Raise more. Optimize your fundraising program by using data analytics to evaluate factors like retention rates and donors’ giving lifecycles. Segmenting donors by their interests, lifestyles, and channel preferences allows you to create personalized, targeted appeals that will improve donor relationships.
- Upgrade more donors to mid-level giving. With a tool like GivingDNA, your nonprofit can quickly identify the donors who are primed and ready to upgrade to the next giving level. Find these opportunities by supplementing your constituent data with third-party data containing philanthropic and giving affinity insights. You can also use the same data to identify supporters who would be receptive to becoming monthly donors.
- Find more major giving prospects. Taking a reactive approach to major gift prospecting (like adding prospects to your portfolio after they interact with your organization) can lead to missed opportunities to expand your pool of major donors. Proactively engage promising prospects in donor stewardship strategies rather than waiting for them to make the first move. Use your data analytics tool to identify the prospects with the most ideal combinations of wealth and giving affinity.
A robust fundraising analytics and wealth screening tool can help you do more than accomplish just basic goals. Look for a tool that makes finding actionable insights and solutions easier, transforming your team into fundraising experts.
What are some important data points for nonprofits to reference?
Constituent data
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:
- Giving behaviors like how much, when, and how donors give
- Demographic data that illustrates donors’ ages, incomes, education, and employment status
- Psychographic data like values, morals, personality traits, lifestyle, and interests
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 that 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.
Preferred communication channels
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 try to 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 also makes outreach feel more personalized. It shows that you’ve taken note of what donors respond to and that you care about folding their individual preferences into your strategy.
Donor retention rates
Often, nonprofits with low retention rates focus on recruiting new donors to replace the old ones and stay afloat. This practice isn’t sustainable, and these low retention rates create what fundraising professionals call a “leaky bucket,” where nonprofits continually lose the donors they have while trying to earn more support.
Fortunately, with data analytics, nonprofits can identify the “holes” in their bucket and diagnose 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.
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:
- Find donors at risk of lapsing. These donors typically have not made a gift in the last six to twelve months.
- Reference data about at-risk constituents. Look at demographics, geographic location, financial information, and more to understand why donors are lapsing.
- Uncover their reason for giving. With a platform like GivingDNA, your nonprofit can quickly reference data related to donors’ giving affinity, donation amounts, and the other causes they tend to give to. Use this information to create retention messages that align with each donor’s motivations.
- Send opportunity alerts. Send a message to donors who are at risk of lapsing asking them to re-engage with your organization in a small way. You can also send donors who lapsed two to three years ago a reminder to reconnect with your cause.
If your organization is currently improving its retention strategies, consider using your fundraising analytics tools to find upgrade opportunities as well. Pinpoint loyal donors who regularly give to your organization and have the means to increase their contributions. Reach out to these donors to begin conversations about upgrading them to a higher donation level.
This increased support might come in the form of higher recurring gifts or through participation in other types of fundraisers. For instance, you might promote your merchandise store or an eCard fundraiser to donors who have already shown a commitment to your cause.
Of course, remember that with an upgrade request comes additional stewardship responsibilities. When devoted donors expand their support, show your appreciation by thanking them for their efforts via letter, phone call, or an online eCard.
Wealth markers.
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:
- Net worth
- Household income
- Political contributions
- Stock holdings
- Real estate ownership
Keep in mind that there are many other factors to consider when conducting wealth screenings, and these 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 the cost of living in their area. 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.
Employment information
Employment information can be part of your research prospecting process as certain job titles indicate a high annual income. For example, if you identify a donor who has a C-suite position, they may be a potential major giving candidate or have the ability to help your nonprofit form a corporate partnership with their business.
Additionally, if you know where your donors work, your nonprofit can leverage corporate giving programs, like matching gifts. Matching gifts are donations businesses make to the same nonprofits their employees give to, usually matching their contributions at a 1:1 ratio. However, matching gift programs are not widely publicized, and chances are that many of your donors are unaware of whether qualify for matching gifts
By tracking your donors’ employment information, you can help them discover their matching gift eligibility. In some cases, this can have a major impact on your donors’ giving potential. A few examples of top matching gift companies include:
- Disney. Both full and part-time employees are eligible for matching gifts, meaning a broad spectrum of employees can have donations of up to $25,000 matched.
- Microsoft. All matching gift programs have a donation minimum and maximum for which gifts they will match. For example, if an employee donates $25 but their employer has a minimum of $50, the gift is ineligible for a match. Microsoft lowers the barrier to entry for employees with a low minimum of just $1.
- Soros Fund Management. While Microsoft’s low minimum requirement makes participation easy for all employees, Soros Fund Management’s high maximum of $100,000 means some of your major donors may be able to double their gifts.
To help your donors discover if they are matching gift eligible, consider investing in a matching gift database. These tools streamline the matching gift process by allowing donors to search for their employers and get paired with their matching gift information in seconds.
Some matching gift tools even offer communication tools for your nonprofit. These allow you to take note of which donors are match-eligible and continually encourage them to claim their matching gifts. This saves your team time and effort, enabling you to pursue your mission all while earning valuable funding.
Wrapping Up
When your nonprofit leverages data analytics, you can quickly find the insights you need to drive powerful results at your organization. Tracking down the actionable insights hidden in your raw data files can take a trained eye and years of experience, 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:
- Wealth Screening for Nonprofits: Key Tips and Providers. Wealth screening is an important piece of the data analysis process, helping your organization identify the most promising prospective major donors.
- Donor Segmentation: The Secret to Better Fundraising Results. Donor analytics tools allow you to organize your donors into strategic segments. Learn how to create donor segments that strengthen your fundraising campaigns.
- Master Your Mid-Level Giving Program. Your mid-level donors are some of our most reliable supporters. Discover how to connect with these donors to secure their support long-term and increase their value over time.
