Fundraising creates millions of pieces of donor and campaign data annually. As a nonprofit, you can use this data to improve your fundraising campaigns, grow your organization and enhance how you manage donors.
Collecting and analyzing data not only supports goal tracking but also provides insights that show your team and board the impact of their hard work. Implementing data-driven fundraising strategies ensures that you’re using this data effectively to build better relationships with donors and improve your campaigns.
Let’s learn how to manage fundraising data better to improve donor engagement, fundraising, and reach.
How Can Data Improve Fundraising?
Data-driven fundraising should be used to improve your future campaigns.
You can analyze the data you collect to find campaign trends, which helps you plan future campaigns more effectively. You’ll be able to identify fundraising strategies that are working and ones that haven’t been as successful. Data allows you to make necessary improvements and helps with decision-making to find success and grow your organization.
How to Use Data in Fundraising
Measuring fundraising success with data is one of the most effective ways to improve your fundraising campaigns. To make data collection beneficial, you need to know how to use the data you’re collecting and what to look for.
Here are several data-driven fundraising tips to get you on the right track.
Collect the right fundraising data
Nearly every aspect of your fundraiser can be used as data. One of the biggest things to remember when collecting data is that some will be irrelevant to your organization and goals. When irrelevant data is mixed in with valuable data, it’s hard to dissect actionable information.
Focus on collecting the right data for your goals to narrow down your efforts and ensure you can use the information in your database. The “right” data will vary from nonprofit to nonprofit, though some common examples of relevant donor data include:
- Personal information, like their name, contact information, occupation, address, preferences, interests, partners, family, and hobbies.
- Previous engagements with nonprofits include volunteer efforts, advocacy participation, donations, campaigns supported, and event attendance.
- Business ownership, corporate connections, employment information, or other investments.
Pay attention to key donor metrics
Fundraising metrics, also called key performance indicators (KPIs), are measurable values that indicate whether you’re reaching objectives. Key performance indicators (KPIs) are critical for effective fundraising data management.
Donor retention in 2024 fell for the 4th consecutive year, dropping another 4.6%.
Source: Quarterly Fundraising Report from the Fundraising Effectiveness Project
Here are four key metrics nonprofits typically pay attention to:
- Donor retention rate: The donor retention rate is the percentage of donors you retain after an initial donation, which you want to be high. In other words, this is the percentage of your donors that make repeat donations with a maximum of one year between donations. This KPI can reveal insights like how successful certain communication channels are, how your donors prefer to donate, and if you sufficiently recognize and thank your donors.
- Lifetime value: A donor’s lifetime value is the net amount you anticipate receiving from the donor over the lifetime of their involvement with your organization. This KPI can help determine where to dedicate strategic campaign, stewardship, and fundraising efforts.
- The number of donations: Count the total donations you receive throughout a campaign. This is a great metric for determining how well donors and supporters responded to the fundraiser and your appeal.
- Average gift by source: Tracking your average gift by source allows you to determine what donation channels your donors prefer and use more often. This KPI will give insight into which channels are worth maintaining and which channels you’d be better off without. You can use this information to reduce costs and increase activation.
Segment Your Donors
Donor segmentation involves grouping donors that share similar characteristics. Segmenting donors is essential for implementing data-driven fundraising strategies.
With segmented donors, your data will be separated into more understandable chunks, which can help you determine how to interact with each segment. For example, you may create segments based on:
- Age
- Location
- Event participation
- Gift size
- Gift frequency
- Preferred contact method
Creating segments allows you to cater your marketing and communication to the different donor groups to increase the effectiveness of getting through to them.
For example, segmenting your donors based on donation frequency allows you to tailor your communication strategies. When communicating with first-time donors, you need to form a connection so they feel special and will donate again or get more involved with your organization. On the other hand, monthly donors already have a relationship with your organization, so they want to feel special through recognition, like unique thank you notes and updates on how their donations are being used.
Best practices and features for fundraising donor management
About 4 in 10 nonprofit organizations use a donor database or CRM.
Source: The State of Nonprofit Fundraising, Technology and Operations: Impact on Mission Sustainability
Your donor database houses all your donor data, which means there’s a lot of information here at any given time. With such high levels of data, your donor database can quickly become cluttered and incomprehensible.
Keep your database clean and organized to ensure you can find information and use it effectively. Sort your data and keep formatting standard so it’s easy to find and understand. A nonprofit constituent relationship management (CRM) system stores information on all your donors and every interaction you have with them.
To effectively manage your data, leverage a donor database or CRM system designed for nonprofits. These systems streamline fundraising data management, making it easier to analyze data and enhance donor relationships.
Look for CRM features that support data-driven fundraising, such as:
- Reporting: Stay updated, track retention rates, get notified of lapsed donors, and more with this solution. Sharing donor reports is even as easy as a single click.
- Customizable features: Custom tags, fields, segments, and filters allow you to make the CRM work for your organization’s needs. Once you customize your fields, the right system can help you discover personalized insights, like wealth capacity and donor potential.
- Security technology: The latest security technology allows for secure data storage, sharing, and tracking.
Embracing data-driven strategies is essential for optimizing your nonprofit’s fundraising efforts. By focusing on the right data, tracking key metrics, segmenting donors, and using purpose-built CRM tools, you can improve campaigns, strengthen donor relationships, and expand your impact.
With actionable insights and an organized database, supported by the right technology, your organization can make informed decisions and foster stronger connections with supporters.
