Nonprofit data-gathering and analysis are crucial for informed decision-making, but many organizations struggle with this aspect of fundraising. 95% of nonprofit professionals say that their organizations gather data, but only 6% are confident that they use this data effectively.
As your nonprofit prepares for the new year, refreshing your fundraising analytics strategy will help maintain an effective, sustainable fundraising approach. Let’s review some frequently asked questions about nonprofit fundraising analytics to help you develop your plan.
What are nonprofit fundraising analytics?
Nonprofit fundraising analytics involves using your nonprofit’s data and key performance indicators (KPIs) to assess past performance and make data-driven decisions for future fundraising activities.
There are three primary categories of fundraising analysis:
- Descriptive analytics: The process of assessing historical data to identify trends and patterns. You can use descriptive analytics to understand what happened during a campaign and why it was successful or unsuccessful. For instance, you can assess your past GivingTuesday campaign performance to identify your most effective strategies.
- Predictive analytics: Using past data to anticipate future donor behaviors or campaign outcomes. For example, you can predict how much a certain donor might give or how much you can raise for a specific campaign.
- Prescriptive analytics: Taking predictive analytics a step further by using analysis tools to identify recommended next actions based on data insights. For example, your nonprofit’s constituent relationship management system (CRM) might offer suggested actions, such as reaching out to a certain donor who exhibits a strong engagement with your mission.
Each of these analysis processes can play a useful role in your fundraising strategy, depending on the insights you’re hoping to gain.
Why is tracking nonprofit fundraising analytics important?
Developing a data analysis strategy takes time and effort, but it’s ultimately worth it because of the benefits it can bring to your organization. Tracking fundraising analytics will allow your nonprofit to:
- Make data-driven decisions that boost your return on investment (ROI). Analyzing your fundraising data allows you to focus your efforts on the activities that drive the highest ROI.
- Anticipate future success. Reviewing past performance can help identify patterns and elements that will make future campaigns successful.
- Determine where to utilize your resources for the greatest impact. For example, you can understand whether you’re making the most of your nonprofit’s software solutions and whether adding new tools can help you reach your goals.
- Help justify strategy changes to nonprofit leadership, such as your executive director and board members. Showing leaders that concrete data supports your ideas will make it easier to justify strategy changes or new resource investments.
- Promote accountability. By gaining a deeper understanding of where your fundraising efforts are succeeding and falling short, you can promote greater transparency and accountability within your fundraising team. Plus, you can provide more accurate fundraising reports to stakeholders like donors, grant funders, and foundations.
Ultimately, conducting fundraising analysis and gathering data can help your nonprofit better serve your community and work toward your mission more efficiently.
What fundraising metrics should nonprofits track?
The foundation of effective fundraising analysis is gathering the right data points and metrics that paint a clear picture of your nonprofit’s efforts.
You can collect a variety of fundraising metrics that illustrate both offline and online fundraising progress. Here are a few important metrics that nonprofits often track:
- Donor retention rate
- Donor lifetime value
- Average gift size
- Fundraising ROI
- Supporter sentiment
- Donor giving preferences
- Engagement data
- Website analytics
- Social media engagement metrics
- Donation page conversion rate
Select metrics that align with your nonprofit’s strategic goals. For example, if one of your current goals is to improve your donor stewardship and build stronger relationships, you can prioritize metrics like donor retention and supporter sentiment. Note any changes in these metrics and adjust your strategies to improve your approach.
How can you conduct fundraising analysis effectively?
Whether you’d like to conduct descriptive, predictive, or prescriptive analysis, you can get started by following these steps:
Set goals
Establish specific, measurable goals to provide a point of comparison for your fundraising progress. Here are a few examples of objectives you might set:
- Boost donor retention to 50%
- Increase your average gift amount by $50
- Increase your donation page conversion rate to 70%
Identify how you’ll use each type of fundraising analysis to reach your goals. For example, to increase your retention rate, you can use descriptive analysis to understand historical fluctuations in retention. Then, you can use predictive analytics to determine which donors are most likely to continue giving and which are at risk of lapsing. Lastly, you can run a prescriptive analysis to determine the right next steps to take, such as sending a survey to gather donor feedback or inviting donors to a stewardship event.
Use a variety of tools to gather data
You can use multiple tools to collect donor data that will support your fundraising goals, such as:
- Fundraising tools
- Online donation page
- Donor management or CRM software
- Email marketing platform
- Social media analytics tools
- Website analytics tracking platforms
Ensure your fundraising tools integrate with your other software solutions to enable seamless data transfers between platforms. For example, Bloomerang’s donor management software guide recommends finding a nonprofit CRM that integrates with your fundraising software, marketing solutions, and financial management platform. This makes it easier to keep all supporter data organized and accessible from your donor management system.
Create donor segments
Segmenting your donors can reveal patterns in their giving behaviors. You can leverage donor segments to help build targeted marketing campaigns or determine the right donor groups to engage in specific fundraising campaigns.
RFM (recency, frequency, and monetary value) is a popular segmentation method. This involves segmenting donors based on their donation:
- Recency: How long ago donors last gave. For example, you might create groups for those who have given recently and those who haven’t donated in a while.
- Frequency: How often donors give. You can create groups for monthly, quarterly, annual, and sporadic donors.
- Monetary value: How much donors give. Consider creating segments for major, mid-level, and smaller donors.
Of course, these aren’t the only segmentation criteria you might consider using. You can segment donors based on personal preferences, like their reasons for giving or specific programs they like to contribute to.
You can also group donors based on demographics, like age. The Cerini & Associates Nonprofit Fundraising Guide outlines the general age ranges and communication preferences for each primary age group to make it easier to market to each generational segment.
Assess reports regularly
Set up automated data reports in your donor management system to regularly assess your fundraising progress.
Review reports with your full team so everyone is on the same page. Team-wide collaboration is essential to stay on target and work toward your metrics goals.
You can also share these reports with stakeholders periodically to promote transparency about the fundraising process.
Adjust your strategy based on trends and patterns
Use your fundraising analysis to assess the success of past fundraising efforts and adjust your strategy accordingly.
For example, let’s say you notice a major drop in your donor acquisition rate. In that case, you can use your donor management software to help identify your top prospects for upcoming campaigns based on wealth and engagement analytics.
Or perhaps your nonprofit is preparing for your annual silent auction event. You can run a predictive analysis to determine which donors supported your event at a high level in previous years and are most likely to attend again. Then, you can personally reach out to them and invite them to the event.
Maintain data hygiene
Data hygiene is the process of cleaning your nonprofit’s data to ensure its continued usefulness in your fundraising analytics efforts. Incorporate these data hygiene tips to improve your fundraising analysis:
- Regularly review your database for outdated, duplicate, or unnecessary information. This data can clutter your database and make your reports less accurate, so be sure to remove it as quickly as possible.
- Make sure your data collection tools only gather useful information. For example, design your online donation form to only ask necessary questions, like donors’ names, payment details, contact information, and giving amounts. Avoid including irrelevant form fields, such as those that ask for donors’ birthdays or hobbies.
- Leverage a CRM that performs automatic data scans. For example, search for a platform that offers automated nightly change of address updates or duplicate data checking. This can allow your fundraising team to focus on generating valuable insights from your analytics tools.
Establish standardized data hygiene measures across your fundraising team to maintain a clean database. For example, create guidelines for inputting new data points into your system or securely deleting data that is outdated or no longer useful.
Jay Love, Co-Founder & Chief Relationship Officer
Bloomerang
Jay has served this sector for 33 years and is considered the most well-known senior statesman whose advice is sought constantly.
Prior to Bloomerang, he was the CEO and Co-Founder of eTapestry for 11 years, which at the time was the leading SaaS technology company serving the charity sector. Jay and his team grew the company to more than 10,000 nonprofit clients, charting a decade of record growth.
He is a graduate of Butler University with a B.S. in Business Administration. Over the years, he has given more than 2,500 speeches around the world for the charity sector and is often the voice of new technology for fundraisers.