Fundraising’s Secret Weapon: Data Analytics

 

First of all, understanding data does not need to be intimidating. In fact, understanding the meaning behind your data can have a positive impact on your bottom line.

 

But how exactly do I extract meaningful insights from my data, and utilize them to inform my future fundraising strategy?

 

Actually, the answer is deceptively simple. If you have a question, test it, and figure out what happened. Does that remind you of something?

 

Yes! Every day we use the Scientific Method to find actionable insights for fundraising programs. This method really allows us to identify relationships and understand the links behind those relationships. Sounds complicated, right?

 

Well, let’s break it down.

 

First, we need to ask a question.

 

What is the value of my donors over their lifetime? What is my donor retention rate? What are the costs related to acquiring a new donor compared to their lifetime value?

 

We are trying to tell a story based on an observed relationship. What story are you trying to tell? Asking a question helps us focus the discussion to improve our program.

 

Next, we need to do some background research.

 

Actually, this step is relatively simple, and maybe you’ve already done it. You have probably been tracking your donor data. By doing a historical analysis on our data, we can start to understand past trends within our organization.

 

Okay, now we are ready to make an educated guess to answer our question.

 

Based on the past performance of my program, I can increase the my donor retention by 5% this year.

 

Remember that we are just creating an educated guess based on the trends within our program. We need an educated prediction, so we have the ability measure the results from our experiment. Don’t worry if you are initially wrong!

 

Now, it’s time to test.

 

Build a mathematical model to test the effectiveness of your new strategy. What are the observable results?

 

Let’s draw a conclusion.

 

So, what were the results of your test? Did they match your hypothesis? Maybe, just maybe, we are ready to put an initial strategy into place. Maybe, we need to go back and retest. Whatever the answer, you are now primed to tell a story. We are telling the story of our data to understand and adjust our donor experience to maximize results.

 

Finally, share your results.

 

Data compliments the decision making process, and start’s new discussions about your program. Fundamentally, data is used for measuring and monitoring performance. We use it to create context for our program, and experiment to understand the impact of our decision.

 

Complex issues happen. But, don’t let the challenge of understanding data limit the potential of your fundraising program.  Are you ready to discuss the numbers?

 

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