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Data Analytics for Nonprofits: Understand and Engage Donors

Data analytics for nonprofits can help your organization better understand its donors.

Data should be at the center of all of your nonprofit organization’s strategies and decision-making. Data analytics help nonprofits understand how donors engage with their communications, empowering fundraisers to craft stronger marketing materials, make better fundraising appeals, and position their organizations for growth. 

Make the most of your nonprofit’s data by choosing a platform like GivingDNA from Allegiance Group that makes data analysis simple and accessible, and work with experts who can interpret your data for you. GivingDNA’s digital marketing, web development, fundraising intelligence, and donor analytics tools enable your team to visualize data and quickly make smart 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:

Let’s get started by explaining exactly what data analytics are and breaking down which types of data you should be referencing.

Looking for tools that can provide insight into your donors' data? Explore Allegiance Group + Pursuant's offerings.

What are nonprofit data analytics?

In the simplest terms, nonprofit data analytics is the process of collecting and analyzing data to uncover trends, patterns, and insights that will guide fundraising strategies.

Nonprofit data analytics can be broken down into four categories, each of which can help your organization uncover new discoveries about your donors. These types of data analytics include:

  • Descriptive data analytics. Descriptive analytics uses 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.
  • Diagnostic data analytics. While descriptive analytics explains what happened, diagnostic analytics shows why something happened. For example, your descriptive analytics might show an uptick in website traffic starting last January. Your diagnostic data would connect that uptick to the launch of a new social media marketing strategy, explaining why the increased traffic occurred.
  • 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 possible future outcomes. For example, you could use data that demonstrates giving peaks during the end of the year to create a strategy focused on pushing supporters toward their next fundraising upgrade. 
  • Prescriptive data analytics. Perspective analytics examines various scenarios and attempts to predict how each will play out so your nonprofit can make the best decisions if any of those situations arise. This type of data analytics relies on machine learning to choose the absolute best course of action based on your data. An algorithm can consider relevant factors, specific parameters, and risks and benefits of potential solutions, helping you choose the best path forward. 

These different types of data analytics build on one another. Each helps you learn different things about your supporters’ preferences and determine actionable next steps to expand your nonprofit.

How can data analytics benefit nonprofits?

donors and their giving motivations, an influx of new donors with different preferences and behaviors could derail existing strategies.

Data analytics help 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. Use data analytics to optimize your fundraising program by predicting donors’ giving behavior and creating fundraising appeals that align with their interests. For example, you might segment donors by their interests, lifestyles, and channel preferences to create personalized, targeted appeals to improve donor relationships.
  • Upgrade donors to mid-level giving. With data analytics tools, your nonprofit can quickly identify donors ready to upgrade to the next giving level. Find these opportunities by supplementing your data with third-party data containing philanthropic and giving affinity insights into your supporters.
  • Find major giving prospects. Rather than waiting for promising major giving candidates to make the first move, proactively engage them in donor stewardship strategies. Use your data analytics tool to identify prospects with ideal combinations of wealth and giving affinity.
  • Improve donor retention. Data analytics can spot donors who are ready to upgrade and those at risk of lapsing. Pinpoint behaviors that mark a potential retention risk so you can intervene with re-engagement strategies before losing a donor. 
  • Identify new fundraising opportunities. By analyzing donors’ giving behaviors, you can assess their interests and determine what fundraisers they might respond positively to. For instance, you might discover your major donors have business connections, which could lead to corporate sponsorship opportunities.

Look for a robust fundraising analytics and wealth screening tool that makes finding actionable insights and solutions easier, transforming your team into fundraising experts.

Get a full view of your donors with GivingDNA by Allegiance Group + Pursuant. Book a demo today!

How can nonprofits get the most out of data analytics?

Donor analytics tools are only useful if you have the expert knowledge to make sense of your data. Use a data analytics platform and work with a fundraising consulting firm like the experts at Allegiance Group + Pursuant. With these fundraising professionals by your side, you’ll get more out of your data analytics 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, Allegiance Group + Pursuant’s wealth screening tool, GivingDNA, allows you to screen donors whenever you like.
  • Referencing both internal and external data. External, appended data, like your donors’ stock holdings, provides additional context into your donors’ lives and giving capacity. By combining this third-party data with your donors’ engagement history, GivingDNA can help you get a complete view of your donors to make targeted fundraising appeals.
  • Featuring suggested segmentation. Segmenting donors by shared characteristics, like demographic details or household income, helps you target your most valuable donors and create greater levels of engagement.
  • Highlighting attributes and data fields. Traditional datasets don’t always give you a full picture of who your donors are and why your mission matters to them. With GivingDNA, you can view a range of data points that provide accurate insights, especially for high net-worth donors.

With these combined internal insights and external data insights, your team can work with top marketing consultants to construct targeted fundraising appeals, build relationships with valuable supporters, and future-proof your fundraising strategy. 

What are some important data points for nonprofits to reference?

Supporter data

When you understand why your donors give, you can craft fundraising appeals that speak to their interests, motivations, and values. By doing so, you’ll build lasting relationships that lead to long-term support. Gather data analytics like: 

  • Giving behaviors, such as how much, when, and how donors give
  • Demographic data that illustrates donors’ ages, incomes, education, and employment status
  • Psychographic data like values, personality traits, lifestyles, and interests

This data provides 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 your fundraising ask. Using the data you’ve gathered about the donor, you can piece together how much to ask for, when to make that ask, and what details to include in your pitch. 

You can also target specific donor groups by creating audience segments. Segment donors based on giving level, key behaviors, demographic data, and other important factors. Then, create personalized messages that speak to each group’s unique relationship with your nonprofit, avoiding sending out boilerplate mass messages that don’t resonate with your audience.

Partner with consultants who know the ins and outs of donor analytics. Contact Allegiance Group + Pursuant.

Preferred communication channels

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 actually see and respond to your messages. 

You might discover that donors in the baby boomer generation respond positively and have higher engagement rates to direct mail from your organization. However, when you try to contact Generation Z donors through the mail, you receive few responses. In situations like this, you would need to adjust your strategy for younger donors and switch to their preferred communication channels, like texting or social media.

Reaching out to donors through their preferred channels also makes your outreach feel more personal. It shows that you’ve taken note of what they respond to and have accounted for their individual preferences in your strategy.

Donor retention rates

Often, nonprofits with low retention rates focus on recruiting new donors to replace the old ones. However, it costs more to acquire a donor than retain them, and 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 why some donors slip away. Then, your nonprofit can develop solutions that meet your donors’ specific needs and preferences to plug the holes in your bucket.

Use data analytics for nonprofits to improve donor retention rates.

Start by identifying donors who are at risk of lapsing and implement strategies that call them back to your cause. The process of reactivating donors at risk of lapsing might look like this:

  1. Find donors at risk of lapsing. These donors typically have not made a gift in the last six to twelve months. 
  2. Reference data about at-risk constituents. Look at demographics, geographic location, financial information, and more to understand commonalities between lapsed and at-risk donors.
  3. Uncover their reason for giving. With data analytics tools and insights from fundraising consultants, your nonprofit can uncover data points related to donors’ giving affinity, donation amounts, and other causes they support. Use this information to create retention messages that align with each donor’s motivations. 
  4. Send opportunity alerts. Send a message to donors at risk of lapsing asking them to re-engage with your organization in a small way. You can also send reminders to donors who lapsed two to three years ago, prompting them to reconnect.

If your organization is currently improving its retention strategies, consider using your data 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 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 eCard.

Wealth markers

Nonprofit wealth screening helps you learn more about your donors’ capacity to give, allowing you to better assess what donors are likely to contribute or how much they might be comfortable upgrading to. 

To get a basic measure of your donors’ wealth, research 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
  • Discretionary spending 
  • Household income
  • Political contributions
  • Stock holdings
  • Real estate ownership

There are many factors to consider when conducting wealth screenings, and these simple wealth indicators won’t tell you everything you need to know about major giving prospects. 

For example, two donors with the same household incomes might have vastly different discretionary spending budgets due to lifestyle or living costs in their area. However, these wealth markers can help you estimate their giving capacity and whether they can help you meet your fundraising goals.

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 with 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 they 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 a donor’s 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. 

The steps in the matching gift process.

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 needed to drive powerful fundraising results. Tracking down actionable insights hidden in raw data can take a trained eye and years of experience, so find a data analytics tool and work with fundraising experts who can do the heavy lifting for you. 

Check out these additional resources to learn more about data analytics for nonprofits and improve your fundraising strategy:

Interested in unlocking your donors' full giving power? Discover how the experts at Allegiance Group + Pursuant can help! Get in touch!