Data Analytics for Donor Management

It’s been said (way too often, perhaps) that data is the new oil. Its value is undeniable in the modern-day. But, like oil, it needs to be processed and refined. Otherwise, it’s useless. There’s no point in collecting a large amount of data unless you know how to use it to improve specific business outcomes. In the non-profit space, there seems to be a question looming about how to leverage data for tremendous success. 

Non-profit Organizations can make millions by way of donations. They receive funds from hundreds and thousands of people and parties who believe in them and want to support them. They collect funds from different parts of the country and even the world. One look at the number of transactions, and it’s clear that a massive amount of data is being generated! 

Unlike oil, this is data comprising the preferences and habits of living, breathing human beings. They need to be addressed in a specific way to convince them to continue their support and spread the word. This can only be done by keeping track of each donor and intentionally and carefully nurturing each relationship. But this cannot be easy to execute. 

That’s why we feel that while most non-profit organizations dream of a steadily growing list of donors – that same list can turn into a problem! It becomes close to impossible to handle donor relationships effectively. 

So, what are the key challenges that non-profit organizations face with a growing list of donors?

Challenges in Fundraising

  1. Individual Donors Are the Most Common
  2. According to studies,95% of most non-profit funding in the US is from individual donors. Additionally, it’s essential to increase both the number of donors and the amount donated by each. That creates a vast amount of data for non-profits to process and act on. Doing so is also expensive and complex, and it’s challenging to work with such information manually. Not only is that time-consuming, but it also creates blind spots and introduces a margin for error. That can add to the organization’s expenses – something that’s highly undesirable, especially for NGOs and non-profits who already work on small budgets.

  3. Donors Are Becoming More Selective
  4. Due to financial constraints, households have tighter budgets than before. Their ability to donate has decreased. Now, they’re choosier about whom they present to. They’d want to contribute to organizations whose values significantly align with their own. Thus, establishments have to pay more attention to getting their message across to the right people. They also have to ensure that the message is genuinely representative of their work.

    Another aspect of this is how to avoid spending time on those who will not contribute again. Doing so is a waste of time, effort, and money. There must be processes to help organizations correctly identify genuine potential donors from the rest.

  5. Wide Range of Fundraising Activities

Specifically, in the context of the NPO’s various activities, the fundraising efforts must include tracking down and managing a lot of data related to donors, members, volunteers, etc. The organization must also build intuitive systems predicting who will donate and build a loyal base of supporters. Do they need to know who will be a repeat giver? Who can help the organization best meet its goals? Fundraisers must decipher which campaigns to run, identify the correct platforms on which their target audiences spend time, etc.

In the face of such challenges, how do you cultivate bonds with new donors, convert current donors into stewards, or maximize processes related to donor retention, engagement, investment, and much more?

There’s one tool that can help – namely, data analytics.

How Can Analytics Help?

The solution to these problems lies in data analytics. These analytical procedures help unlock hidden insights that can drive targeted actions and communications, from improving donor engagement to increasing returns on fundraising efforts. Let’s explore how organizations can use data analytics to manage their donor engagement.

  1. Identify Prospective Donors
  2. Analytics will help identify those who have interests and exhibit behavior relevant to your cause. That enables you to understand who your target audience is. That way, you’ll know who you’re trying to reach and through what messaging. Plus, analytics can help determine when staff should give extra information to a specific donor for their continued support or the trigger event that could encourage a more significant donation. They can assess historical donation information and other donor characteristics to target those with the highest probability of conversion. 

  3. Analyze Trends
  4. Analytics helps NPOs understand and anticipate potential donors’ needs, behaviors, and preferences. That helps define what messages, advertisements, etc., would encourage your donor to donate. These give a sense of how long they will contribute and how many touch-points they need to increase their engagement. Predictive analytics will also help you set additional tactics based on possible future changes in donor behavior. All these answers will help you optimize the frequency and nature of donor contact to maximize their contributions. 

  5. Test Marketing Efforts
  6. Do you run Facebook ads or Google ads? Most non-profit marketing teams test the efficiency of their ads using A/B tests. But analytics can do more than this. Innovative platforms can give you greater control over your programmatic campaigns on many digital media. It reduces the number of tests you’ll have to run in the first place. It’s a faster way to understand what drives engagement and where you should connect with potential donors. Using this information, you can nurture different donors in more meaningful ways. 

  7. How To Generate the Highest Returns

This information will help you find where to use your donor acquisition resources to get the most bang for the back. That will bring down expenses and increase the returns you get per donor. How? You can see what channels, campaigns, messages, etc., work and don’t work by assessing the data. Analytics will help determine what kind of messages and which channels are the best (and worst) for outreach. That includes email, phone, direct mail, etc. You can then put fewer resources in the low-result areas and put them into the work things. That will increase efficiency.

These were just a few ways data analytics can help you grow and nurture your growing list of donors. After all, they are precious resources that fuel your organization. Refining your donor management systems by tapping the power of data analytics will go a long way in driving up donor engagement and contributions