Facilitate Means to Make Easy
We’re in the era of ‘Big Data.’The digital revolution has made it so there’s more and more information that can be acquired and stored.
We’ve gotten really good at collecting data. It’s everywhere.
But use of data is not.
In fact, at the moment less than 0.5% of all data is ever analyzed and used
So… now what? How on earth do you sort through it all and turn it into something meaningful and actionable? Especially if you’re a nonprofit with a limited budget?
It begins with understanding why data is important, what data is most meaningful to you, and how to prioritize data collection and evaluation strategies to help you reach your goals.
Data alone is not knowledge.
It must be broken down and scrutinized for us to understand patterns and gain insights. For-profit businesses are constantly buying new software and hiring new staff to help them with data analysis. Nonprofits? Not so much. How will nonprofits adapt and cope, given more limited budgets?
First, by not sticking there heads in the sand.
The amount of new data being generated is increasing at exponential rates. 90% of the data in the world today has been created in the last two years alone. Anything that exists in the digital world has the potential to be recorded as data. Voice, video, text communication, online purchases, online reviews and social media posts all now count as data, and any company or nonprofit that finds a way to leverage this virtual ocean of information will gain new opportunities for growth. Nonprofits are going to have to do something! Nonprofit marketer/guru Katya Andreson highlighted our need to deal more effectively with our data:
You can’t do a great job as a marketer if you don’t have a clear grasp of your audience. And you can’t have that without data that gives you one view into people: when they’re giving, how they’re giving, how much they’re giving. Having a database of online donors vs. direct mail donors vs. major donors doesn’t give us the view we need. We need our information in one place, with the tools that can help us analyze the information. It’s like investing in glasses when your vision is blurry: it’s a wise investment to allow yourself to see.
Unlocking the secrets of big data is the next frontier in innovation, competition and productivity per a recent McKinsey report. This means effective, consistent data collection, analysis and visualization. In the years ahead you’ll no doubt begin to hear about new approaches and services to help nonprofits become more efficient at using big data to support their missions. You’re probably already hearing about many of them (e.g., here and here and here). Pay attention!
It will behoove you to reconsider the potential that data may have to help you improve results. As the great management guru Peter Drucker famously said:
“What gets measured gets improved.”
Do you know your:
FUNDRAISING RESULTS
- Overall donor retention rates?
- First-time donor retention rate?
- Recurring donor retention rate?
- Average gift size (can also calculate by different giving levels)
- Percentage of donors who upgrade/downgrade?
- Percentage of donors who lapse?
- Percentage of lapsed donors you recapture?
- # of gifts per time period (e.g., monthly, quarterly)
- Overall donor growth (factors in number of new donors plus all of the above)
NOTE: You can calculate all of the above overall and/or by (1) giving level (e.g., major donor) and (2) demographic (e.g., board; parents)
FUNDRAISING RETURN ON INVESTMENT (ROI)
- Cost per dollar raised (CPDR) -overall and by campaign?
- Lifetime donor value?
- Lifetime donation value?
- Overall donation growth (total value of gifts received over defined time period)?
- Campaign conversion rate?
- Pledge fulfillment?
- Giving capacity (informed estimate, usually through research and wealth screening software)
FUNDRAISING ENGAGEMENT
- Outreach rate (e.g., frequency of donor contacts)?
- Fundraising participation rate (e.g., Peer-to-peer; Crowdfunding)?
- # of asks made?
MARKETING METRICS
- Open rates?
- Click-through rates?
- Email opt-out rates?
- Applause (i.e., likes; follows) rates?
- Amplification (i.e., share) rates?
- Conversation (e.g., comments; replies) rates?
- Website visits
- Traffic-driving key words
- Referral rates (i.e., percentage of leads that come from different sources)
- Online conversions (email, social media, website landing pages CTA’s taken)?
You should!
What Gets Measured Gets Improved!
Big Data is only going to become bigger, but don’t stop with the data. Remember, it’s not knowledge.
It’s business intelligence that will make your data actionable and will, ultimately, make you smarter.
If you don’t know what’s working well, how can you invest more in that strategy?
If you don’t know what’s not working, how can you develop a plan for improvement?
If you create a data report, but then don’t share it with anyone to discuss what it may mean, is it like the proverbial tree falling in a forest?
Next Steps
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Budget for what you need (technology software, staff, strategy and training).
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Invest in and commit to your own data measurement education.
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Create a data collection, measurement and evaluation plan with clear goals, objectives, strategies, deadlines and assigned responsibilities.
I highly recommend you check out the resources available at The Fundraising Report Card if you need help understanding and/or calculating any of these fundraising metrics. For more marketing metrics, check out Measuring the Networked Nonprofit by Beth Kanter and Katie Paine. And for social media metrics you should be tracking, check out this article on Nonprofit Hub.
Any tracking tool, like Google analytics or whatever is available in your fundraising software, email provider and CRM, can be extremely helpful. Many nonprofits have these tools; they just don’t use them!
Data is your jumping off point for action that merits your investment. There’s no point to continuing to work hard if you’re not working smart.
Keep your eyes and ears alert to opportunities to turn your bits and bytes into knowledge and action.
This article was updated March 16, 2017
What are you doing to analyze your data and turn it into action?
