“You can’t manage what you don’t measure.” – Peter Druker
Most fundraising professionals only review donor database analytics when their organization is in trouble financially. They turn to analytics when revenue is lower than expected or when they are losing donors. And yes, this is a very good reason to take a deep dive into your data, however there are lots of other reasons to look at the numbers.
1. Strategy: Many fundraisers make it their practice in January to conduct an annual review of their donor data. They use these findings to strategize for the year. Donor attrition, second gift conversion and long-term donor value are some examples. An analytical review is also very handy at strategic planning time.
2. Change of leadership: Recruiting companies, or the organizations themselves, are conducting donor data reviews as part of the hiring process for senior leaders. Through sharing the good, the bad and the ugly of the organization’s current donor database, candidates are assessed on their responses to the real challenges that the organization faces.
The RFM (Recency, Frequency and Monetary) metric will provide a quick snapshot of the health of an organization. The hiring committee can quickly assess a candidate’s skill level by their answers to questions based on the non-profit’s data results.
3. Capital campaigns: Is a non-profit ready for a capital campaign? The first step to a feasibility study to measure the capacity for a capital campaign is to look at the data, after all, this is how donors talk to you. How many major gifts were received? What time of year donors give? How many donors reactivated? These key metrics will help to assess if a capital campaign is on the horizon.
4. New agency: Changing to a new agency can be overwhelming. You want to ensure the experts you are hiring are up for the task. By using results from the donor review to target questions, the hiring process will be based in facts. You no longer need to rely on hunches and naval gazing.
5. Board of directors: Every year, more boards and fundraising committees are asking for more metrics. They want more than the bottom line. Board members are asking for renewal numbers, consecutive years of giving statistics and revenue stream analytics from fundraising staff. An analytical review ensures everyone is on the same page.
6. Resources: From a more comprehensive database to a new donor relations staff member to an acquisition budget, fundraising professionals are assessing their database to help them make the case for more resources. Whether it be software, human resources or funding, analytics can help guide an organization.
7. Predictive analysis: Long-term donor value is the best way to indicate future fundraising success. This metric is key when advocating for acquisition dollars and planning for more revenue streams.
Whatever your reasons for undertaking a donor analytics review, you will quickly wonder how you ever worked without these important insights.
Samantha Laprade, CFRE, Director, Gryphon Fundraising
