Why Nonprofits Need to Utilize Donor Data
When I was hired at my first development position at the University of Louisville years ago, I immediately learned one glaring fact: I was responsible for raising hundreds of thousands of dollars annually, yet I had no donor-driven data to work with. There was no computerization of records, and I had little historical information to use as a starting point. I immediately had to contact several similar and best-of-class organizations for information and create my own systems and processes. I also needed to understand the context of my position and field of endeavor, and how data was to be utilized.
The Nonprofit Leadership Center notes in our data-driven world, we are used to having the numbers readily available to make decisions. How does this relate to the world of donors?
As nonprofit leaders look ahead, new data continues to emerge that provides insights to help move their missions forward. While the fundraising climate feels dire, according to The Nonprofit Leadership Center, humans are still wired to give, giving behavior is shifting to helping solve immediate problems, organizations continue to focus on relationship-building, and intentional communications matters. Many donors do not have enough data to understand where they can direct support.
Foundant suggests four essential things fundraisers should know about donor data as professionals are finding themselves with too much data to evaluate:
- Gather data, such as basic personal information, advanced personal information, etc.
- Collect donor data by logging previous donations, your organization’s website, your organization’s online donation forms, social media and outside sources.
- Analyze donor data by employing segmentation and determining wealth plus warmth indicators.
- Determine donor insights through data by allocating outreach resources, perfecting donor communications, making the optimum ask, educating matching gift programs and considering major and planned gift solicitations.
Causevox emphasizes that donor data tracking is important to your fundraising success. It helps you focus on individual donors and determine when and how to ask for the appropriate gift. You need to determine how to collect donor data, where to place the data and determine a strategy for what information to collect and when to collect the information. In collecting the basic data, you need to determine the best place for donor inspiration to get involved. You also need to determine the type of information, such as family information, ability to volunteer, employment information, online interactions, age and affinities.
DNL OmniMedia determined five nonprofit data essentials to get to know their supporters in deeper ways. It notes that a high-revenue return depends on knowledge through data and effective use of that knowledge. DNL states that donor analytics is the key to combining donor information in a combination for positive strategy.
Five key nonprofit data essentials include:
- Donor engagement history
- Donor giving habits
- Donor and prospect giving capacity
- Donor and prospect giving propensity
- Donor communication preferences
Araize points out the need to nurture the relationships you have with donors and build on them in the future. To do this, you must collect certain types of data such as biographical information, nonprofit involvement history, real estate ownership, educational background, business connections, political giving history, hobbies and interests.
PND suggests that one of the biggest challenges nonprofits face in strengthening their donor relationships is not being able to see and understand their donor data. Collecting and analyzing data allows you to better understand your donors, take advantage of corporate philanthropy and reach new markets.
Look at donor capacity and donor affinity to determine a donor’s ability and willingness to give. Note indicators such as real estate ownership, business title/affiliation, stock ownership, giving history, relationship to your cause and political giving. Use wealth-screening tools and continually review the most current data possible. Donor data will help you understand your existing donors and help identify new prospects.
Donor data is vital to your success, but mistakes can occur. GuideStar notes the seven biggest mistakes in handling donor data. These mistakes are:
- Assuming data/gift entry needs no guidelines
- Never or seldom running an NCOA update
- No recording of person donor interactions
- Not backing up your data and testing your backup
- Never cleaning up your data
- Not taking advantage of data append services
- Not integrating key systems in your organization
Understanding donor data should be on the top of your to-do list. Without relevant, up-to-date and comprehensive data, you will not have the tools to determine the best strategy for fundraising success. I can easily say the largest gifts I have ever secured came in large part from having a comprehensive knowledge and data on the prospect in advance of the first face-to-face meeting.
After that meeting, I ran to the car and took a volume of notes in preparation for the next meeting with the prospect. Having donor data to understand the prospect is critical to your success at the outset. Invest in data, and learn to use it wisely. To be competitive in resource development, you must constantly secure, retain and upgrade donors. Always realize the importance of donor data.
Duke Haddad, Ed.D., CFRE, is currently associate director of development, director of capital campaigns and director of corporate development for The Salvation Army Indiana Division in Indianapolis. He also serves as president of Duke Haddad and Associates LLC and is a freelance instructor for Nonprofit Web Advisor.
He has been a contributing author to NonProfit PRO since 2008.
He received his doctorate degree from West Virginia University with an emphasis on education administration plus a dissertation on donor characteristics. He received a master’s degree from Marshall University with an emphasis on public administration plus a thesis on annual fund analysis. He secured a bachelor’s degree (cum laude) with an emphasis on marketing/management. He has done post graduate work at the University of Louisville.
Duke has received the Fundraising Executive of the Year Award, from the Association of Fundraising Professionals Indiana Chapter. He also was given the Outstanding West Virginian Award, Kentucky Colonel Award and Sagamore of the Wabash Award from the governors of West Virginia, Kentucky and Indiana, respectively, for his many career contributions in the field of philanthropy.