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09/08/2011 - There’s gold in them thar hills
In the mountains of donor data that many nonprofits are sitting on lie the veritable gold mines of opportunity to greater fundraising riches. Kathy John explores the hidden value in your database and how to reach it.
What lies beneath?
It’s pretty obvious: the money raised from donors helps to fund vital programs and services. It’s also obvious that donors who have a long-term relationship with an organisation will give more and help fund even more vital programs.
Yet, what is often overlooked is the value donors bring to your cause, by who they are, where they live, what they like about you and their giving patterns over time.
The equity value of your database is not just in the number of donors you have and the total income raised. The real value is the insights and information you gain from the analysis of their data, which you can use to power growth.
Because the information is captured in quantitative and transactional form, you have a gold mine of data for analysis residing in your database! Analysis of donor behaviour, likes and dislikes, response and non-response; this is the “value-add” information in
So where do you start digging?
Firstly, prepare a detailed analysis brief, just as you would for the development of creative for a new appeal. The key is to analyse your data relative to the fundraising programs within your own organisation, so you can use analysis to drive future fundraising plans and strategies.
There is limited value in an analysis which gives you a huge array of charts and figures which are very interesting (if you’re an analyst) and impressive (if you’re paying the bill), but not conducive to taking action appropriate to your cause.
Secondly, review your in-house capability to perform analysis. If time, resources or skill sets are not available inhouse, then look outside for an analysis partner who can work with you, a partner who understands the science and practice of fundraising.
Then prepare your methodology: refine the rules and parameters for analysis; select the data to be included, and most importantly the data to be excluded. Conduct checks and balances to ensure the data in your analysis has integrity and proceed.
A database with 30 years of fundraising history will require more extensive analysis than a two-year-old database.
Finally, translate analysis findings into a legitimate report and executive summary that can be understood by all who need to be enlightened. Make sure the findings are easy to break out for use in driving program strategies.
Shoot down myths and build your business case
Whether you’re working with a mature database of 100,000 plus supporters with 20 years of history, or a new database with less than 5,000 supporters, the primary measurements will be constant. Use your data to drive programs, to put ‘furphies’ to rest, to validate your beliefs, to support your case for more investment and to disarm your critics!
It’s very important to validate your authority with accurate and timely data analysis.
To illustrate this point here’s a story a colleague likes to rejoice in. “Whenever a board member queries the wisdom of donor acquisition programs I just drop the big heavy donor audit folder down on the desk and invite them to learn more about how our donor relationships have developed!”
Data analysis gives clarity and direction
A frustrated colleague recently shared a conundrum with me. “The 2009 Christmas appeal income was down on last year and the Board believes it hasn’t performed.” The data for the two appeals revealed that 2009 results were actually ahead of the 2008 year up to February 7 – Black Saturday.
An influx of donations came in February because people gave in response to the media attention for the bushfire emergency, these gifts were included in the 2008 Christmas Appeal results. More importantly, if post campaign analysis had been done at the time, the emergency donors would have been identified and flagged for special treatment.
We work in an industry where fundraising teams are continually expected to raise more under pressure. “We’ve lost capital as a result of the GFC, so we’ve been asked to raise 20% more this year … with 10% less budget to invest in donor relations.”
Two options: pack up your bags and run fast, or, analyse your donor base, find the giving patterns which reveal opportunity for tactics such as upgrades and major gifts, and use the insights gained to build better relationships with donors.
My apples aren’t bananas
It’s natural that we like to compare the performance of our organisation with others – but there are dangers. We spend days/weeks/months each year on fundraising analysis and a CEO says “just give me a score out of 10 … and how do we compare with xyz down
I always prepare a two page overview with succinct graphs for executives who are too busy to immerse themselves in detailed reporting.
Database performance comparisons can create unrealistic expectations if people don’t understand the complexity of fundraising.
If you compare a cause which has invested strongly to build brand value and now ‘owns’ a product category (e.g. child sponsorship) with another cause which has limited scope to link donors with cause recipients, the comparison will be uneven.
Continuing in this vein, a healthcare service will usually appeal to a wider audience than a disability service provider. Some organisations are more likely to attract regular givers than others. Welfare organisations can perform better during recessions.
And most importantly, the stability, or lack thereof, in the fundraising department of an organisation can have an adverse impact on the performance of donors because relationships may be disrupted or lost.
What was, is not what will be
Analysis tells you what donors have done before , but the past is not always a predictor of what donors will do in future. You can change giving patterns by offering more involvement, additional opportunities to give, better communications and servicing … that’s why ongoing data analysis is so important!
Kathy John loves data almost as much as the air we breathe. She is the founder and managing director of Robe-John & Associates and has been immersed in charity direct marketing for 25 years.