Is your nonprofit’s technology stuck in the 20th century?
Does this hamstring you in executing your ambitious, yet difficult, fundraising strategy?
Data collection and use is a massively growing field with increasingly more technologies and companies dedicated to it. As a nonprofit, you’re often at the mercy of funding constraints that limit you from going out and buying the flashy new system or paying a data engineer to help make sense of all the information available to you.
Source: Datameer
But that shouldn’t stop you from trying. There are cultural factors that enable successful data usage, and once employed, can help skyrocket your ability to attract sustainable funding. The following ideas are proposed by Scot Chisholm, CEO of StayClassy.
1. Make data a priority at the top
A shift towards a more data-based operation requires total buy-in from the board all the way down to field-level staffers. By conveying a strong support for making your nonprofit more “data-driven” and “scientific,” all employees need to see the excitement and determination start with you.
Next, data needs to be transparent and accessible for everyone.
The only way (and I mean THE ONLY WAY ) to empower your team to become more data-driven is to let them see, and take ownership of, your company’s data– that means the good, the bad and the ugly.
Once you’ve gotten the hang of the transparency thing, you need to focus on making the right data accessible to each person in your organization (this is the really hard part). To start with, you need make sure that you put the right tools in the hands of the right people. For example, the person in charge of your online fundraising might use a fundraising platform, like StayClassy, to access the campaign data he or she needs to analyze past performance. Or, a Development Director might use a Constituent Relationship Management (CRM) system like Salesforce.com, to analyze and improve the way your organization interacts with donors.
2. Use relevant and actionable metrics
It is critical to not become overwhelmed with the tons of data available to us. Focus on what’s most important to your mission and the clients you serve. Create metrics that align the mission with activities that your team performs. And try to make sure they allow for performance management and improvement.
Use a combination of inputs, outputs, and outcomes to help align people with mission. For example, it may be easy to track the amount of times an employee engages with a client. That might be one metric to gauge performance.
But do client engagements directly correlate with the outcomes you’re trying to achieve in your mission? Add a second metric related to client outcomes to round out this employee’s performance and impact on the organization.
While outcomes are usually the most impactful type of information we can have, they are also the most difficult to secure with data collection. As a result, continue to develop inputs and outputs as key metrics, but also mix in outcomes to round out the performance management process.
Source: Acumen Fund
3. Hire experts
This can be tricky, especially when funds are limited. But focus on people with proven experience mining data and translating information into actionable results.
How do you do that?
Not everyone has had the analytical training of an engineer; but that certainly doesn’t mean that they lack the capacity to appreciate and utilize data in their own role. In fact, I’ve found that some of the most “data-driven” people I’ve encountered had “non-technical” roles. The right type of person, regardless of function, will find an appreciation for the role that data should play in any successful organization. A few traits you might look for in a person are:
– Their inquisitiveness (they question everything);
– Their detective skills (once they recognize a trend, they won’t stop until they find a root cause);
– And finally, their decisiveness (their ability to draw a conclusion and a course of action from a set of data, i.e. sales numbers, marketing analytics, etc.)
Now that you’re set up
Once a nonprofit has invested the time and resources into data management, there is a snowball effect of performance and funding improvements.
You might have dashboards that look like this…
Whether a donor writes a check once a month or once a decade, most large gifts are generated because of strong relationship building. A development office that takes time to know each donor and understand each individual’s goals for distributing their hard-earned money will go a long way in helping attract and maintain those gifts.
Donors want to know their funds are being put to good use, and this is where data and metrics become the game changer.
This concept is described beautifully by Jenny Dinnen at MacKenzie Corporation.
Consider two hypothetical charities, both focused on providing fresh water to poverty stricken villages around the world:
Charity-1 works tirelessly to grow their global impact and evenly distributes funding to its different project sites. They send a “thank you” letter after donations are made which includes on-site project pictures and generally states how each donation helps provide water for those in need.
Charity-2 also works tirelessly to grow their global impact, however they employ a detailed data analytics platform tracking metrics such as weekly donation amounts, fresh water distribution distance in miles and total gallons pumped at each location. Not only does this help more accurately distribute funding on a need-by-need basis, they share with donors the statistical support illustrating the impact of their contributions. For example, “Thanks to your generosity, last month’s donation count increased by 15% and as a result over 1,000 additional gallons of water were pumped on top of the area’s average. In fact, the increase in funding equipped one project site with a truck now capable of delivering fresh water to villages up to 10 miles away from the source.”
Both of these hypothetical charities are working toward the same goal; providing fresh water for everyone everywhere. The difference is Charity-2 takes a focused, strategic approach to managing their in-going and outgoing activity. By tracking valuable data metrics, the resulting analytics can be applied to resource allocation, individual project valuation, and fundraising or donor loyalty strategies; thus improving the overall organization’s efficiency and productivity.
Loyalty is built through maintaining the relationship and demonstrating results. When you can accomplish a donor’s wishes, it goes a long way with keeping their checkbook open.
Source: North American YMCA Development Organization
The same thing applies to grants. The best grantor/grantee relationships develop on the foundation of strong, impactful data.
This report by Principal Investigators Association on How to Compose a Perfect Data Management Plan for winning Federal grants provides useful information for grants and donations alike. The premise remains the same across all kinds of funding: find out what the funder is trying to accomplish, and demonstrate your ability to achieve it.
How the snowball effect works
You start your data management culture change and collection processes. At the same time your strengthening your donor network by maintaining relationships and demonstrating increasing value.
The actual value doesn’t necessarily have to increase…merely the demonstration of value. That’s where the data comes into play.
As you develop closer relationships with donors, and data continues to reinforce your mission and proof that your donors’ wishes will be satisfied, they will gradually trust you more.
As this trust builds, you will climb the list until you’re eventually top of mind when the donor thinks about next year’s gift. Whatever social cause he wants to support, you will have demonstrated in the past your excellence in that area, and your strong relationship will make it even harder for him to think of someone else to give the funds to.
What once started as a collection of donors with little to no proof of success is now a strong network of reliable gifts reinforced by continued program success. Everyone wins!
Already mastering data management?
Check out these top 11 customer relationship management systems that strengthen donor relations.
Apply to hundreds of open Federal grant opportunities here or read this article to see other top grants databases.