GUEST POST // 4 Benefits of Data Research for Your Fundraising Strategy
By Gabrielle Perham of AccuData
You’ve probably heard it before: Not all donors are made alike. If you treat your donor base as a monolith, these differences in what donors want and need from your nonprofit can seem like a drag. However, when you recognize and identify these distinctions, they can be your fundraising program’s greatest strength.
While data research is essential across the nonprofit space—from developing advocacy campaigns to hosting events—this guide will focus on how donor data can benefit one of the most vital elements of your nonprofit: your fundraising efforts.
Data research can help you:
Find new donor prospects.
Personalize your fundraising communications.
Optimize your ask amount.
Track your fundraising success.
Ultimately, the process of data research and marketing analysis can help you determine the best way to improve current and future fundraising campaigns. With this in mind, let’s start with one of the biggest benefits of fundraising data research: lead generation.
Find new donor prospects.
Lead generation isn’t just for for-profit businesses. Instead of looking for new customers, lead generation for nonprofits focuses on finding new potential donors for your organization.
While it’s important to retain your existing supporters, finding new donors is crucial to growing your mission. But advertising to everyone who crosses your path isn’t an efficient or cost-effective way to identify these new donors. Data research lies at the heart of streamlining the prospecting process and will help you quickly pinpoint a new target audience based on your ideal donor characteristics, such as their location, wealth, age, and political affiliation.
Philanthropic scoring and wealth screening are the two main components of prospect research:
Philanthropic scoring. Use philanthropic indicators, such as previous giving, volunteering, and event attendance, to predict the likelihood that prospects will give to your organization.
Wealth screening. Use wealth data, such as real estate ownership, stock holdings, business affiliations, and political giving, to identify prospects with the highest giving capacity.
Once you identify these new prospective donors, you can take the next steps to use your data research to inform how and when you communicate with them.
Personalize your fundraising communications.
In addition to finding new donors, data research can also be an incredible tool for more effectively communicating with those donors. Instead of sending out one blanket communication to all donors, nonprofits can segment and analyze their donor data to create targeted, powerful appeals and calls to action.
Consider these ideas to personalize your communications using donor data:
Including donor names. An easy way to make all outreach more personal and engaging is by addressing recipients with their preferred names and titles. With many communication tools, this can be quickly accomplished with merge fields that automatically insert names stored in your constituent relationship manager.
Creating unique calls to action. You can use your data research to tailor your appeals to specific donor segments. For example, you might adjust an email campaign with different wording and graphics to appeal to different donor demographics.
Reaching donors on multiple channels. How and when you reach out to donors can determine how successful your calls to action will be. Leverage data on your donors’ communication preferences (e.g., email, social media, direct mail) to focus your outreach on the most impactful channels.
Once you’ve done your research and are ready to connect with donors, you don’t have to create all your fundraising communications from scratch. Look for free resources, such as NXUnite’s fundraising letter templates, with language proven to engage and convert donors.
Optimize your ask amount.
Data research can also help you optimize the donation amounts you suggest to your donors. In many ways, optimizing your ask amount is closely related to personalizing your fundraising communications.
Because people have a range of financial situations and capacities to donate, the amount they choose can be a highly personal decision. In turn, asking for the wrong amount can be off-putting and alienating to donors. For example, asking for $1,000 from donors with the ability to donate $50 might result in losing those donors altogether.
Data research on wealth indicators, such as income, real estate holdings, and age, can provide insights into how much donors are realistically capable of donating. You can then target your asks in your prospect and donor outreach to maximize that amount.
Additionally, you can use your data to optimize your ask directly on your donation page. We recommend suggesting:
Donation amounts based on ongoing donation data.
Matching gift opportunities based on real-time employer appends.
Recurring donation options.
By giving donors these data-driven suggestions, you’ll raise more money per donor and increase your fundraising return on investment.
Track your fundraising success.
On a larger scale, data points (such as average donation size, acquisition cost, return on investment, average gift size, and event attendance) can help your team determine the successes and failures of your fundraising efforts.
Throughout your fundraising strategy, as you send emails, make suggested donations, test ads, and hold events, you need to track your audience responses with hard, meaningful data. Robust data will help you gauge the effectiveness of any given piece of outreach and allow you to make systematic improvements to engage more donors. Without it, you're relying on guesswork and untested hypotheses that are likely misaligned with your actual donors’ needs.
For example, if an email appeal failed to lead to donations, an analysis of related data might show high-open rates but low click-through rates, suggesting an issue with your call-to-action copy. On the other hand, a high bounce rate would indicate that the contact information in your database is out-of-date and needs updating.
In this sense, your data research will help you acquire new donors, convert followers, and retain existing donors. Over time, the more data you collect, the better your future campaigns can be.
As you conduct your donor data research, take steps to mitigate errors in the data you collect and keep your donor information accurate, organized, and up-to-date. According to AccuData’s guide to data hygiene, bad data can lead to poor decisions and sloppy outreach, costing organizations up to 12% in annual revenue.
For best results, we recommend using donor research solutions, including:
A nonprofit donor database or data management system to track, analyze, and report on all your donor data.
Integrated payment processing and communication tools for automating and tracking both donations and donor outreach.
Third-party data enhancement and hygiene services to help keep the information in your database clean, complete, and up-to-date.
Predictive fundraising analytics that identify future donor behavior and fundraising trends based on past patterns.
Ultimately, your fundraising strategy will significantly benefit from bringing data to the decision-making table.
This guest post was written by Gabrielle Perham.
Gabrielle is the Director of Marketing for AccuData Integrated Marketing. She joined the organization in 2017 and possesses more than 15 years of experience in strategic marketing, branding, communications, and digital marketing. She earned a B.S. in Marketing and an M.B.A in Marketing Management from the University of Tampa.
