The fundraising and donor engagement landscape has changed considerably over the last decade. Analytics tools and the data available today allow charities and nonprofits to develop data-driven strategies that are proven to be more effective. But while charities of all sizes understand the value of gathering data on their donors and campaigns, a lack of expertise and knowledge related to the utilization of those data sets can impede growth. In this article, we will look at how charities and nonprofits can use data and analytics to strategize their fundraisers to enjoy optimal results.
Importance of metrics and data in fundraising campaigns
The better a charity or nonprofit understands its donors, the higher its chance of setting up an impactful fundraising campaign. Data collected over time can create the much-needed feedback loop required to help your charity and nonprofit do better every year.
In other words, identifying key fundraising metrics and tracking data for fundraising campaigns can show you how successful your efforts have been in meeting your organization’s goals and can highlight the areas that need to improve. The numbers and results of your campaign better enable you to determine how to effectively allocate your resources and make important decisions on better utilizing each dollar spent.
4 essential elements for strategy and planning
Having worked with a huge number of nonprofits and charities of all sizes, we believe these four elements can have a noteworthy impact your overall strategy and planning:
1. Data dashboards with past and current data
Many questions come to mind as we start analyzing past and current data. With the large volume of data that become available as a result of each fundraising campaign, it is easy to get overwhelmed.
So questions like: What should be measured? What can be safely ignored? Are we measuring too much or too little? How can we ensure the numbers are accurate? These are some of the questions that most charities and nonprofits have as they dive into metrics and data.
Therefore, instead of measuring every data point, a good approach is to start with handful of key metrics. And to streamline this process, a fundraising data dashboard showcasing past and current data sets can play a key role.
What is a data dashboard?
A data dashboard is a data visualization tool that compiles and displays key performance indicators for your charity or nonprofit. It highlights areas that need attention and showcases initiatives performing at par with industry standards. Overall, a data dashboard allows nonprofits and charities to get a holistic 360 degree overview of their fundraising journey. You can either build this dashboard on an excel sheet or purchase a monthly subscription tool such as KIT or Datahero that will compile, prioritize, predict, and analyze key data sets for you.
2. Industry benchmarks
One of the best things that you can do to stay ahead of the curve is to look at various industry benchmarks for your metrics and then measure your progress against them. Benchmarks are the standards that serve as reference points for metrics. For example, if the industry average of cost of raising a dollar (CRD) in a given year is $0.24, that serves as a benchmark to evaluate your fundraising efficiency in that particular year. As a best practice, you could aim for $0.20 or try to lower it further.
Overall, some of the most important industry benchmarks and metrics that your charity needs to track include the donor retention rate, donor lifetime value, average gift size, and donation growth rate. This fundraising report card provides a detailed look at the key industry benchmarks across the nonprofit sector.
3. Up-to-date donor data
Just like any other dataset, up-to-date data about your donors is the only way you can have clear insights about the areas that need improvement. They help measure your fundraising and marketing performance. These should ideally be updated regularly to provide you with clear insights into your ongoing efforts. The following five metrics can help you keep your donor data up-to-date.
a) New contact and donor acquisition
Don’t just focus on acquiring new donors. Collecting contact records is equally important, if not more. Otherwise, you will miss out on nurturing opportunities. These new contacts can come from the events you hosted, people who signed up to receive your newsletter, people who contacted you via social media, traffic on your website, peer-to-peer campaigns, etc. Be sure to capture contact activity and basics such as contact information. Your charity or nonprofit can then work on nurturing these contacts through drip campaigns so they can become donors.
b) Donor acquisition by campaign
This donor metric tracks how your charity or nonprofit is gaining its first-time donors and which campaigns are resonating best with your target audience. This will also shed light on how your donors prefer to give and what kind of messaging is most effective.
c) Number of days before donors’ first gift
This metric showcases whether your nurturing programs are having the desired impact. It is key is to reducing the time between the day a new potential contact joins your database and when they make their first gift.
d) The average number of donors who upgrade
Simply put, an upgraded donor is one who gave more this time around compared to their previous donation. In this metric, you can track how well you’re upgrading donors year over year. When you isolate the ‘upgraded’ donors and start tracking their giving history, you can glean valuable insights. Perhaps they started giving more when they signed up to a monthly giving program, or you can trace this back to a specific event that a majority of these donors attended, etc. Finding these ‘trends’ will give you a clear idea on how you can encourage more donors to upgrade.
4. Knowledge of the latest trends in fundraising
Keeping an eye on the latest trends, both good and bad, can help your charity or nonprofit avoid the pitfalls, prepare for the path ahead, and do better overall. A few trends that seem to be shaping the nonprofit landscape include:
- A shift in donation channels — According to the Why America Gives report, people are opting for and completing many more donations via their mobiles devices, smart watches, and other wearable tech which means that offering your donor base flexible giving options has become more important than ever. Also, currently, recurring giving accounts for 26% of total online revenue for nonprofits. The remaining $400 billion in offline donations will also gradually shift online to save time and resources.
- An increasing uptake of online charitable gaming-based fundraisers – According to the Charitable Giving Report of 2020, online charitable giving is seeing a year on year increase of 20.7% while a report by Funraise indicated that 47% of donors gave to charitable causes through online charity gaming such as raffles and sweepstakes.
Some popular online charity raffles are:
- 50/50 online raffle: As the name suggests, the pot or prize pool in a 50/50 raffle is split between the charity and the organization. The prize— which is usually a lifechanging amount—is funded via ticket sales while the winner is selected via a draw. For maximum impact, the raffle should ideally be repeated every month to garner momentum and also increase the size of the pot.
- Catch the Ace: The popular online and offline fundraiser has multiple draws and usually runs for up to 52 weeks—or until the Ace is found. A winner is selected each week via a random draw who takes home a percentage of the proceeds from the sale of tickets. They also get a chance to pick another card from a 52-card deck to take home the progressive (cumulative) jackpot. If the Ace is not found, the chosen card is removed from the deck and the proceeds are rolled over for the next scheduled draw.