Learn what data is, how it works and how you can use data to kickstart your fundraising efforts
Crunching mountains of data can seem like a boring task, but giving attention to the right metrics can unlock the next level of your fundraising success. If you collect the right data, you can use the numbers both internally and externally to evaluate the accomplishments of your campaigns and promote those successes to your supporters.
What is data?
Before you can begin tackling your data in a manageable way, it’s important to understand exactly what that four letter word means. According to Merriam-Webster, there are three definitions attributed to the word, all of which apply to fundraising.
1: factual information (such as measurements or statistics) used as a basis for reasoning, discussion, or calculation
2: information output by a sensing device or organ that includes both useful and irrelevant or redundant information and must be processed to be meaningful
3: information in numerical form that can be digitally transmitted or processed
How does data fit within fundraising?
For most, the first definition is what’s most commonly associated with data-driven fundraising. Information is captured by the fundraiser and analyzed to identify trends and gaps in their campaign. But in order to make sure you’re accurately collecting your data, you have to process it first.
That’s why it’s important to understand the second definition. Since you will collect a wide range of information from different channels during your campaign, it is important for you to digest that information and pull out any data which is irrelevant for your purposes. You can maximize the impact of your analysis by only concentrating on meaningful data. Because this process is time-intensive, many nonprofits enlist the help of fundraising consultants with experience working with this type of data.
The last definition of data points nonprofits to their fundraising methods. By using digital fundraising platforms, donation information is instantly converted to transmittable information that can be used at your disposal. With a countless number of tools and applications online, harnessing your data can allow you to accomplish virtually anything you can imagine. To help you get started, our Data Connect program allows you to easily connect your donation information to over 700+ applications.
4 Key Fundraising Metrics
While there is a limitless pile of data and metrics that you could aggregate, it’s important to concentrate only on the metrics that make sense for your organization. Otherwise, the chances are you’ll get lost in a sea of numbers and have nothing to show for it. To help you boil down what’s important, we’ve listed our top 4 fundraising metrics which every organization should track:
1: Donor Retention Rate
Donor retention rate is just what it sounds like: the percentage of donors that your nonprofit retains after the first donation, with a year maximum between donations. A high retention rate usually correlates to low solicitation costs, since you’re able to collect donations from donors who already know and care about your organization instead of searching for new ones. Retaining donors is also a surefire way to increase a donor’s lifetime value, which is the next metric on our list.
2: Lifetime Value
The best way to increase your fundraising efficiency is by maximizing your donor’s lifetime value. Simply said, the lifetime value is the net amount you can expect to receive from a single donor. This metric is simple to forecast and tracks gains over a period of time. The beauty of this metric is that is shows the true value of your fundraising events. Even if you were to break even during a fundraising event, the lifetime value from any newly on-boarded donors can be attributed to the event’s success.
3: Number of Donations
Fooled ya! You probably assumed we were going to say donation total, didn’t you? While that may be the ultimate prize, counting the number of donations you receive can be a much better indicator of your success. By keeping an eye on the number of donations you receive during a campaign, you’ll know if donors responded to your appeal, and can assess the health of other metrics like donor retention rate and lifetime value without diving into them.
Formula: Just count how many donations you received
4: Average Gift By Source
By identifying the average gift by source, you’ll be able to see what channels your donors respond best to. Alternatively, you’ll also have visibility of what your high cost/low return channels are. With this data in hand, you‘ll have the knowledge to reduce your fundraising costs and increase activation by focusing your communication on what works.
Now that you have a solid grasp of what data is and know a few key metrics, let’s talk about how to use it. You’ll want to look at your data in two buckets, internally (just for you and your staff), and externally (for your donors and perspectives).
As you kick off your next campaign, whether that’s a multi-year capital campaign or your first foray into fundraising, try a new data-driven approach to your goals. You very likely already set goals based on total amounts you need to raise. This time, set some secondary goals based on the fundraising metrics in this post to achieve a more well-rounded view of your success.
You may also find it helpful to create an internal dashboard to display your goals, progress, and trends. In this way, you can avoid the redundant meetings to share progress, and your staff will have a real time view of how their efforts are paying off.
An example dashboard showing YoY donation comparison
Why keep the evidence of your organization’s good work to yourself? Share some of your most impressive metrics from big campaigns and fundraising events with your supporters to show them what their contributions have made possible.
After your events or campaigns end, gather basic information like total donations as well as interesting trends like the percentage of gifts that came from each giving channel. Display these data points in graphs or visually engaging infographics, then share them widely on social media, using your campaign hashtags and tagging your sponsors for maximum publicity. And as an added bonus, consider optimizing your story into shareable content that can be spread easily.
A great example of linking multiple data points in a infographic.
For more best practices on using data to drive your fundraising and for examples of how to best use data on Razoo, check out Razoo’s recent webinar.