Fundraising for a non-profit relies on having a deep, broad, and current understanding of who your current and future donors are, and which programs are most effective. Well-run and successful non-profits have an integrated and current set of metrics that help guide their strategies and programs.
Yet, fewer than 50 percent of non-profit leaders say that analyzing data is easy.
A recent study from Salesforce revealed that the majority of non-profit leaders are challenged by many aspects of data management.
We’ve all heard the term “big data.” Non-profits now have cloud-based access to a wide range of insights and facts. But big data can be too big. Information needs to be culled-down and organized so that it’s most useful to decision-making.
Automation, AI, and machine learning will all make the process easier, but to prepare for it, successful non-profits still need to embrace the basics and have a clear and well-resourced plan for using data and analytics to their best advantage.
Steve MacLaughlin, author of Data Driven Nonprofits summed-up the state of analytics when he said in an interview, “If you start out with bad data, then things never get better — only worse. Building a culture that values data and makes sure data health is a priority is very important.”
Like cleaning out clutter in a home or office, scrubbing and organizing data is not a welcome chore. But it may be the one activity you can invest in for 2020 and beyond that will have a significant pay-back over time.
What Should Tomorrow’s Successful Non-Profit Measure?
The short answer is, “virtually everything that matters to the bottom line and your future growth.” To simplify, consider these basic categories.
Understanding who has been funding your non-profit over time is critical to developing a growth strategy.
1. Donor Sources Over Time. This doesn’t necessarily predict who your future donors will be but will give you insights into your loyal base. Make sure your donor database is kept current and accessible.
2. Donor Retention. Do you fully understand who your loyal supporters are versus one-time contributors? Building an ongoing gifting strategy and communications year-round are critical. Be sure to track:
3. Donor Demographics. Look below the surface. If you can afford to overlay data or conduct surveys, you’ll get a better sense of the persona of your ideal donor. This will help you fine-tune your marketing/sales messages and media.
Donor Acquisition Strategy
Once you’ve pinpointed who your current supporters are, you can assess the size of the market opportunity and apply your learning into creating a data-based marketing plan.
1. Market Size of Current Donor Audience. Perhaps you’ve established that your ideal donor is a 50+ executive with an average of $150K and living in a major metro area. You then need to assess the size of the total population that fits that description. A challenge that many non-profits face is that their past donor base is dwindling. Looking creatively at the donor of the future is essential.
2. Size of New Segments. Think broadly and creatively about your next generation or group of supporters. Look to groups that are large, growing, and easy to reach
3. Effectiveness by Type of Marketing Program. Especially when marketing dollars are scarce, you need to spend them wisely. Take the time and effort to assess the effectiveness of every campaign and compare traditional media approaches to digital media efforts.
4. Digital Marketing Metrics. Understanding your online effectiveness has become a critical element of marketing analysis. Among the data you should track are:
Media Exposure and Reputation
Brands (both consumer and business) can rise or fall based on media sentiment. “Getting in the news” is no longer enough for today’s non-profit. Organizations must invest in thought leadership and brand-building activities that will keep them top-of-mind – at a national or community level. To measure the effectiveness of your efforts an your public reputation, turn to measures like:
1. Reach/value of PR exposure: PR firms and freelancers and wire services can provide you with detailed data about the number of “eyes” your media announcements fall on.
2. Ratings on Non-Profit websites: Savvy donors will check out your non-profit prior to giving. Be sure you’re seeing what they see and make adjustments accordingly.
Organization Efficiency and Culture
Last, but perhaps most important, are those measures that will give you insights into the health and growth potential of your non-profit entity.
1. Program Effectiveness. Even legacy programs need to be reviewed regularly for effectiveness and relevance. Says Selena Swarzfager, President of the MS Council on Economic Education (MCEE), “When resources are limited, the cost per person served by programs helps the leader make a decision on the best use of funds. For an organization with a mission of education, which my organization has, the pre- and post-testing of participants makes sure that the content being offered is truly making a difference.”
2. Staff Retention Rates. You spend time and energy hiring staff, but are they committed to the mission and organization. Are you losing the best contributors? Be objective when reviewing the data.
3. Board Contributions and Retention. Selecting the right talent is both an art and science. Diversity are creativity are more important than ever. Consider taking a page from the private sector and screen for personality attributes when hiring staff and adding to your Board. Contributions can extend beyond financial clout and, depending on where your non-profit is in its evolution, you may want to expand your search to include new types of professionals and skills.
4. Online Reputation (e.g., Glassdoor). Just as donors will search on Charity Navigator or GuideStar, potential employees will search on hiring sites. Work to ensure high ratings as an attractive place to work.
How to Streamline Non-Profit Analytics
The above list may appear daunting, especially if you have a small staff. Your CFO may excel at developing and reviewing topline financials and trends, but some of the measures require more marketing and human resources expertise.
First, pick a small and manageable group of metrics (Key Performance Indicators or KPIs) that you will track over time. Look for ways to automate as much of the data collection as possible.
Assign a person (or a team) to be responsible for gathering and reporting on a regular basis. If you simply don’t have internal resources, look to local educational institutions for highly-qualified interns. Or, find a volunteer who may have a background in analytics and reporting.
Work with third-party service providers who are data-driven. For example, when choosing a company to build a website or create a sales program for you, ask what types of measures they will be using to gauge success.
Make data analytics fun and engaging. Set a regular schedule for metrics review and encourage your team and Board to discuss and weigh-in on trends and performance. Celebrate successes and reward those people who helped “move the needle” on results.
Above all, do not fall prey to analysis paralysis. Once you spot a trend or see an area for improvement, apply the data to craft a fundraising and organization plan. You can turn two-dimensional spreadsheets into an engaging and effective growth strategy if you make the data come alive through action.