Optimizing donor engagement through data: Expert tips for nonprofits

Approximately 90 percent of nonprofits are collecting data, but nearly half say they do not consistently use data to make decisions. Nonprofits that make decisions based on data engage their donors more effectively than those who don’t. But with so many other tasks to maintain on a day-to-day basis, it can be easy to let data-driven decisioning fall to the wayside. Plus, with disparate systems collecting that data, gathering and making sense these valuable insights become more and more challenging over time.

Discover why this data is so powerful, types of data nonprofits should focus on collecting and actionable strategies for leveraging these insights – plus insights from impact consultancy Sowen, an agency focused on harnessing data to accelerate social change.

Why should nonprofits use data?

Duplicate management, data hygiene, integrations, analytics, reports and dashboards – the terminology surrounding data can be dizzying. Moreover, investing in building trustworthy data sources can feel like you’re spending time away from your mission. After all, you have a constituency to serve, programs to run, teams to manage and campaigns to plan.

Although it can seem like a lower priority initiative, building a culture of data can aid in all your activities and can help inform smarter decision making. Here are some examples:

1. Build stronger connections

Nonprofits can leverage data to understand donor preferences, motivations and behaviors. By analyzing past interactions and contribution patterns, organizations can match tailored campaigns to communication channels to resonate with individual donors. Data allows nonprofits to create nuanced donor personas, guiding them to craft targeted messaging that aligns with the interests and values of specific donor segments, fostering a sense of connection and loyalty.

2. Communicate impact

Data plays a pivotal role in enabling nonprofits to communicate the tangible impact of their initiatives to motivate donors. By connecting the dots between outcomes and contributions, organizations can vividly illustrate the real-world change brought about by their supporters. Rich and verifiable storytelling can compel donors to care more about and advocate for your mission, helping you achieve greater impact.

3. Improve fundraising strategies

Data-driven insights empower nonprofits to refine their fundraising strategies. Analyzing donation trends, identifying peak giving times and understanding the impact of various campaign types enable organizations to optimize their efforts, ultimately helping to boost fundraising success.

What types of data matter?

No matter how small the interaction, every time an action is taken with a donor, you’re collecting data. Whether you’re saving a donor’s contact information, tracking how many people attended an event or sending out satisfaction surveys, you’re engaging in data-collection practices.

You may even have a system of record, like a CRM, that acts as a repository for that information. However, not all data is made the same and it’s important to be clear on what types of data your nonprofit is gathering.

Quantitative vs. qualitative data

At the most basic level, nonprofits need to consider two types of data: quantitative and qualitative.

Quantitative data refers to information that can be measured with numbers, such as dollar values, amounts, percentages or durations.

Qualitative data, on the other hand, refers to descriptive information that can’t be measured, such as names, addresses, feedback or subjective experiences. To differentiate between the two, remember: quantitative measures quantities, and qualitative measures qualities.

Synthesizing both data types into reports and stories can help in decision-making, development and goal setting. Each form of technology you use will likely output both types of data. Understanding the meaning behind and the origin of the data will help you decide how it can be used to best serve your mission – context is key.

Example: Payments data

Consider the case of the data created by your payment processing solution. Two key functions are carried out for each donation processed, generating both qualitative and quantitative data: processing secure transactions and capturing the donor’s information.

Transactions 

Payment processors provide invaluable transactional data, offering insights into donation amounts, frequency and preferred payment methods. This data allows nonprofits to plan for the future by tracking and analyzing financial contributions effectively. For this particular example, make sure that you’re using a solution that treats data security with the utmost importance.

Donor profile

Beyond transactions, payment processors offer insights into their donor’s backgrounds and behavior. Understanding who donors are, how they respond to campaigns and what factors influence their giving provides a holistic view that informs strategic decision-making.

Being able to identify and understand the data from any individual source is a great starting point, however, this information can only be acted upon once it’s matched with the greater goals, resources and constraints of your organization. Here are a few ‘next steps’ for implementing this form of analysis across your organization.

Insights from Sophie Blondeau, Chief Strategy Officer at Sowen

Sophie Blondeau is a strategic thinker and pragmatic idealist dedicated to scaling social impact through data-driven strategy and collaboration. She serves as Chief Strategy Officer and Partner at Sowen, a social impact consultancy dedicated to harnessing the power of data and technology in service of those who are driven to change the world.

Smart organizations understand and accept the importance of placing data at the core of organizational activities, especially when it comes to driving engagement with key stakeholders like donors. They see that when data strategy and analytics are at the center of strategic design, operational excellence and impact measurement, it drives a virtuous cycle of innovation and growth that ultimately delivers scalable growth for both business and social impact. The reality is that no matter where you are in your social impact journey, data can accelerate your efforts.

The integration of data is not limited to a specific part of strategic or tactical execution – it’s permeated throughout. The impact of each step must contribute to the entire life cycle of activities, whether those are focused on strategic, operational or governance activities. Smart, inspiring leaders can develop strategies that bolster scalable growth in reliable insights to all facets of decision making.

Starting the journey is often the hardest part, but it’s absolutely worth the effort.

What we find with the nonprofits, foundations and companies we partner with is that they accept this wisdom, but they have a hard time moving from theory to practice. They know they need to act but are unsure about where to start. They often lack the internal resources or expertise and require an external perspective to help them define best practices and build out a pragmatic roadmap to move them from data to impact.

Here are three steps to help get you started:

1. Assess your data maturity

This means evaluating how data-driven your organization is when it comes to every aspect of your organization, from people, knowledge, tools and processes, and being realistic about the changes and solutions you want to focus on. For example, do you really need the most sophisticated data tools that will cost you lots of time and money? Or is it better to improve usage of existing tools and processes? Do you have the right data to meet the needs of your key stakeholders? Do you have the right tools to share that data across teams? Do you leverage data for critical decision-making and design? This will give you a vital snapshot of your strengths, weaknesses and most importantly, available opportunities.

2. Connect with your stakeholders

To create meaningful and measurable impact means knowing who you are creating value for. The first step is to map out your key stakeholders, both internally and externally. This could include your employees, funders, audiences and partners. Take a deep dive to understand their needs, wants and ultimate objectives. What does success look like for each of these stakeholders? What barriers and challenges do they face? Next, prioritize and categorize them to understand their influence and interest in your organization. Once you have a clear picture of the needs of your stakeholders you can align those with quantifiable goals, objectives and metrics which will help you to track your progress and continuously optimize your activities, which can help provide a tangible measure of success.

3. Cultivate a data culture

To fuel the virtuous data cycle, it’s critical to ensure that your employees have access to the relevant data to make insight-driven decisions. It’s also important to provide stakeholders with the necessary skills to use and interpret the data available to them. Creating a data culture is about teaching people that facts matter, and opinions and old habits can (and should) be continually tested against the opportunity of innovation and critical thinking. It is about enabling people at all levels of the organization to make smart and informed decisions that are evidence based and apply creativity, humility and a learning mindset.

How to begin leveraging your data

The value data can have for your organization is clear to see; however, this advice rarely comes with an instruction manual. Reality, of course, is more complicated than theory – time constraints, complexity and organizational culture can limit your ability to adopt a data-driven approach.

There are, however, some universal best practices that can help you effectively leverage your data:

1. Decide what you want to measure

First, clearly define the key metrics and outcomes you want to measure. Establishing specific goals will guide the data collection process and ensure that insights obtained  will contribute to the overall strategy of your nonprofit.

Though it may sound simple, this is a step that many organizations struggle with the most. It may even uncover some conflicting priorities between team members based on what metrics they define as ‘success.’ Keep in mind the Pareto principle, which states that 80 percent of results usually come from 20 percent of key activities. Understand what that 20 percent is and ensure that the metrics you track are aligned with those activities. With focus and clarity on what you want to measure, you’re better equipped for eliminating unnecessary data collection, freeing up space in your system of record and making work easier for everyone on your team.

2. Audit the data and systems you currently have

Before diving into new data initiatives, conduct an audit of your existing systems and data hygiene. Evaluate the quality, accuracy and relevance of the current data sources. Begin by listing out all the technologies you’re currently using and visually mapping out how data – and which types of data – flow between them. This step helps identify any gaps, inconsistencies or areas for improvement in the existing data infrastructure. You can also readily eliminate any data that may be clutter, not serving the key metrics from the previous step.

You may even discover redundant or underutilized systems that could help you limit waste and focus your funding on activities that help you achieve your mission. If you have a clear understanding of how data flows to your system of record and where it originates, it becomes easier to measure success.

3. Create standards and gain organization-wide alignment

Establishing data standards and ensuring alignment across the organization is crucial for a cohesive and effective data strategy. Define protocols for data collection, storage and analysis, and communicate these standards. Make sure you have clear definitions of what every term means so everyone is “speaking the same language.”

These standards need to come from the top down. Leadership must believe in a data-driven culture and lead by example by following all the new standards and definitions you set. Changing an organization’s culture is never an easy task. By making sure everyone believes in what you’re doing, you dramatically increase the odds of success.

What data can tell us

While these principles can serve any organization, here are a few practical ways to begin using data to make better decisions today, following the steps listed above:

1. Gain a better understanding of giving patterns

Say you want to create more volunteer engagement and decide to measure how much your volunteers give versus non-volunteer donors. Start by auditing your data to make sure you’re accurately tracking who in your constituency is volunteering, how long they are volunteering for and when they are donating to your cause. Do you have the tools to reliably track this information? If not, build out rules for what a formal volunteer looks like and create a system for tracking volunteer hours that those running volunteer programs can track with. This can help you better understand how volunteers give and advocate for your organization compared to non-volunteers, providing insight into future campaigns to help attract more volunteers and grow your base of loyal donors.

2. Learn what your constituents listen to

How do you know if your marketing messages are getting through to your donors? In the world of marketing, A/B testing is a reliable means to test how differing variables in design or messaging perform. For example, let’s say you want to measure the success of one email headline against another (email A vs. email B). Start by defining what “success” means for this test, whether that means click-throughs, email opens or direct contributions. Track the performance of one message against the other, teach your team the best practices of A/B testing and analyze the results to see what message your audience responds to the most. Learn and repeat.

3. Segment donors by giving behavior

Segmenting an audience, whether by their location, age, marital status or other factor, is another strategy that data helps with. Combining segmentation information with behavioral data, such as average gift size, gift frequency or donation method, may provide deeper insight into how to best focus your fundraising efforts. When auditing your systems, keep an eye out for duplicate sources of information or tools that aren't integrated and require manual effort to capture data in your system of record. This is a great opportunity to simplify your workflows. Use this data to build out robust donor profiles, which you can then communicate to your team to build smarter fundraising campaigns.

Embracing data is a necessity for nonprofits looking to thrive in the digital era. By leveraging the insights provided by their technology, nonprofits can build lasting connections with their donor base. In a world where engagement is key, data serves as the foundation for creating impactful and meaningful relationships between nonprofits and their supporters.