In many ways, the challenges and goals of your nonprofit are aligned with those of a commercial business; only your customers are donors and the revenue is contributions.
By gaining data-driven insights to better understand their customers, commercial businesses are equipped to craft marketing messaging and offer value propositions directly aligned with the wants and needs of targeted consumer groups.
Similarly, nonprofits can spread awareness and motivate action by gaining data-driven insights to better understand their donors’ charitable preferences, habits and expectations.
While there’s no shortage of valuable information being produced through each donation, the challenge is in tracking the right metrics, accurately analyzing data sets and effectively implementing the newfound insights. This is no easy task, but through a strategic approach your nonprofit can create a data-centric framework to guide ongoing decision making.
Here are 6 Steps to getting started:
1. Organize Your Existing Data
People usually underestimate the amount of data they currently have. One transaction produces a series of valuable metrics such as the donation amount, donation frequency, time of year, time of day, payment method, payment source, etc.
However, this data is typically held in separate files making it difficult to maximize its cohesive value. Gather everything you currently know and create one master data set to clearly see what you already have, thereby uncovering any missing pieces to the puzzle.
2. Create A Data Collection Strategy
Having identified the gaps in your current data inventory, list any additional information that would be beneficial and specify exactly how this new information would be applied within the organization. This will help identify ways new information can be obtained without drastic changes to existing processes.
The idea here is to develop a cohesive understanding of what to do and why to do it. A series of individual research or analytic projects will feel productive, but you’d be inhibiting long-term value and longevity of the data collected by isolating efforts focused on short-term goals.
The creation of an overarching research and data collection strategy will ensure ongoing efforts are aligned with your organizational goals and vision.
3. Launch Data Collection Strategy
This is where the wheels touch the road. You already know what you know and you know what you want to know, so now it’s time to go get that information.
As previously stated, valuable data points are already being produced through each donor transaction. So now it’s a matter of creating a system of tracking and recording such data for internal use.
Furthermore, at this point you can benefit from collecting direct feedback for additional strategic guidance. Since these ongoing data collection efforts can be tweaked and adjusted along the way, listening to the donors themselves will uncover any pain-points or opportunities within your current service offerings.
By listening to donors and continually seeking new data, your organization can better understand what donors want and then focus data-driven efforts in that direction.
4. Put Your Data-Driven Insights Into Action
Surprisingly, this is one of the most difficult areas for organizations to fully embrace.
It’s common for decision makers to have preconceptions and presumptions about their organization, and sometimes when data doesn’t support these preconceptions the data is disregarded as being inaccurate.
If the previous steps have been successfully completed, then now more than ever you’re equipped to make sound decisions based on fact rather than personal opinions or past experiences.
This is a gut-check moment testing organizational willingness to become truly data-centric; otherwise all efforts up to this point are wasted.
5. Track & Measure Ongoing Results
Closely follow the impact of any new programs or initiatives to monitor the impact they make on your organization.
If results aren’t being produced as hoped or as expected, you have the opportunity to tweak and adjust as needed without having to start over. One of the main benefits of an ongoing data strategy is its agility and adaptability.
For example, imagine that a new promotional campaign was launched based on what donors said is most important to them. Rather than sitting back hoping for the best, you can monitor campaign performance and record which adjustments “move the needle.”
Now you have a quantifiable set of metrics to measure the effectiveness of campaign details; thereby taking the guesswork out of campaign and process development.
6. Repeat These Steps For Ongoing Growth
By this time your organization is building a healthy inventory of data, so an overall review will highlight what is going well and which areas need attention.
Furthermore, there are likely new strategies and processes in place since the last time you started this process so the internal landscape might be distinctly different.
An ongoing cycle through these 6 steps is how your organization will achieve continued growth. You identify where things presently stand, you set new goals, you take action to achieve those goals and you measure the outcome. With each cycle your understanding and ambitions will grow you’re now operating as a data-centric organization.
To chat more about how your organization can benefit from a data-centric approach, give us a shout!
For over 30 years we’ve equipped our partners with the data-driven insights they need to achieve their goals and reach new heights. We can do the same for you.