Learn what data is, how it works and how you can use data to kickstart your fundraising efforts
For most, data can be overwhelming and misunderstood. But once you get past the initial fright of the word, you’ll learn that it can unlock the next level of your fundraising success. By using data to drive your fundraiser, you’ll be able to quickly identify the most successful aspects of your fundraising campaign, and which ones are holding you down. But before we dive into how to harness the power of data, let’s first understand what it is.
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 the data you collect will be erratic, it is important for you to digest that information and pull out any data which is irrelevant for your purposes. By doing this, you can maximize the impact of your analysis, since you’ll only be concentrating on meaningful data.
While the first two definitions help you adjust your fundraising efforts, the last definition can be your fundraising. 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 are renewed from one time period to another, commonly year over year. By focusing on the donor retention rate, you’ll find the ability to lower your solicitation costs, since retaining donors is a whole lot cheaper than finding new ones. Retaining donors is also a sure fire 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).
The most important action you can take is to set a goal. Think about what you want to accomplish and how you’ll measure your progress. Then create a plan to get there. As you plan, you’ll want to break your goal into smaller tangible successes that your team can build on and celebrate. Once you’ve begun to implement that plan, it’s time to start analyzing your data to ensure the needle is moving in the right direction.
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
Once you’ve fully aggregated your data and have identified what you want to share with the world, it’s time to start thinking how you’re going to do that. Forget those standard fundraising thermometer images, you’ll want to think of something that displays your data in a compelling way. In a world full of noise, it’s important to communicate in a quick, concise, and easily digestible manner for your reader. You’ll also want to link multiple data points together to show the full impact of your efforts. 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.