Nonprofit Analytics: How data can make nonprofits more effective.
— Written by Justin Beasley, with an intro by Marlin
As nearly every aspect of our lives moves online, it’s time for organisations to consider making the shift to digital first fundraising. Doing so requires understanding how to effectively use data to analyse and optimise your digital acquisition and fundraising strategy. This blog article from our exclusive Agency Partner, NextAfter, covers best practice data analytics to help you achieve your digital fundraising goals.
Would you rather be right or wrong? To succeed or fail?
Despite being a data analyst, I will go ahead and make a wild assumption of what you would answer. But despite (hopefully) everyone answering in the affirmative, we’re sometimes wrong and sometimes see our efforts fail. Why?
While there are too many reasons to get into here, many of these situations fall into one of two categories:
- Knowledge gaps
We acted on incorrect, incomplete, outdated information—or no information at all
- Skills gaps
We had the correct knowledge but lacked the execution or strategy skills to get the result we wanted
Now let’s look at this through the lens of your nonprofit. Can you think of a time when a new strategy didn’t work, results changed unexpectedly, or a goal was missed? Through the power of hindsight, you may be able to see right away if it fits in one of those categories.
Nonprofits have extreme knowledge gaps in their fundraising
In fact, we released some new research in coordination with The Global Center for Nonprofit Excellence—based on 155 nonprofits who took the OpX360® assessment, which includes 60+ questions analysing the core competencies of effective nonprofit organisations.
Among the findings were that:
- Just 41% of nonprofits believed that the fundraising team had clear visibility into key donor dynamics over the past 5 years
- The average competency for using data strategically to establish measurable outcomes and objectives was 53%
- These factors were seen across organisational size (ranging from sub-$2M/year to over $150M/year)
More on that study in a moment, but let’s take a moment to reframe these findings into our discussion:
- At least 59% of nonprofits are suffering from extreme knowledge gaps in fundraising
- There’s a significant skills gap when it comes to turning data into effective strategy
I don’t know about you, but when I read those numbers, they hurt.
Having experienced both in the nonprofit space, both personally and in others, I see the impact they have on the staff and the cause. And that’s why I’m writing this to you right now—both to encourage you and to make a case for solving these gaps in our organisations.
Why is data so necessary for nonprofits?
Let’s be clear: data isn’t valuable because of what it is (essentially just a bunch of 1s and 0s these days!), it’s valuable because of what it does. If we’re willing, it can teach us. Maybe even enlighten us. We have a saying around NextAfter that “you cannot optimise what you cannot measure,”—but perhaps it helps to flip that around for the sake of our discussion: measure what you want to optimise.
But measurement alone isn’t enough.
Most of the organisations in the study noted above likely have copious amounts of data available to them—the problem is that the right people lack data visibility.
Data is important because we can use it to get better, to do better.
It can also reveal when something is wrong. But only if the right person sees it. Again, the value isn’t in knowing that retention of new donors is dropping . . . it’s in being able to use that knowledge to evaluate the changes to messaging, deliverability, or cultivation that may have caused it—and being able to fix them.
Some call this type of visibility data democratisation—spreading access and understanding of data to allow everyone to improve their decision-making process. I can tell you from experience that I’ve seen this concept be truly transformational within both my time at a nonprofit and in the organisations we get to work with at NextAfter.
4 Ways Data-Visibility Improves Our Nonprofits
Increasing data-visibility accomplishes a few critical things:
- It increases our empathy.
When we know how our donors and constituents are affected by things we do, it helps us to make decisions that are in their best interests, and that consider their behaviors and feelings
- It increases our responsibility and encourages ownership.
When we see something wrong, we can own it and resolve it. When data raises a question, we can ask and learn from it
- It catches problems before they grow
Countless times organisations have come to us with major challenges that could have been avoided if they had more visibility sooner
- It allows us to find opportunities
We regularly find major opportunities hiding right below the surface. The more your team can see and ask questions of data, the more opportunities you can seize as well
Reaching Data Maturity at Your Nonprofit
As an analyst, I can’t help but see the correlation between nonprofits of all sizes that prioritise data and the improvement to their results—both in terms of fundraising and mission impact.
Speaking practically, though, it can seem overwhelming to get the visibility you need—especially given the complexities of organisational structures and limitations of some nonprofit software. The important thing is to start small and iterate—first determining what is valuable to measure (often starting with high-level metrics and working down into things like sources, lifecycles, and behavioral patterns).
Some systems have better reporting than others, and the solution may be getting the data out of your system and into another tool to visualise and analyse it. Regardless of what it takes, the worst thing you can do is nothing!
Data maturity may not look the same in every organisation. It may not always match the ideal scenario we have in our minds—but I think we would all agree that we can do better. In an age where the whole world swings on the hinge of data, there couldn’t be a better time to take the next step in the right direction. We owe it to our donors and our causes.
And if you want to learn more about The Nonprofit Fundraising Executive Benchmark Report I mentioned earlier, you can get it here.
Are you ready to use data more effectively at your organisation? Head over to our Data & Optimisation page and learn more about how Marlin and NextAfter can help grow your online revenue with digital first fundraising.