Analytics for fundraising – questions before data queries

Guest post by Kim Olmsted. Kim has over 25 years of experience in developing analysis for organizational and departmental development. She has assisted clients with some of their most pressing fundraising issues using analysis as one of many tools to gauge effectiveness and investigate solutions.

Being a data nerd, I simply love staring down large masses of data, developing the recipes for statistics and finding the nougat metric that uncovers an unknown truth. Prior to digging into data, all analysis begins with great questions. These may range in simplicity from “why can’t we seem to raise more money?” to “why are we seeing dwindling returns in our annual fund?” While the definition of analytics is to use a system of computing data and statistics to guide our decision making process, all analytics begins with a question or series of questions.

Breaking down the questions to be asking

We might be tempted to query our data until we find something interesting. However, by focusing analytics on answering our organization’s most pressing questions we will be taking the first steps towards accomplishing our strategic goals.

Some standard fundraising questions that institutions currently analyze are:

• How successful are we in reaching our fundraising goals?
• What is our cost to raise a dollar?
• How can we reach more prospects?
• Who will become our next major gift donors?
• Who will become our next annual fund donors?
• How can we set realistic fundraising goals?

Because we are involved in the broader world and realize that social and technological trends may influence our fundraising, we might also be asking:

• How do we reach out to millennial prospects?
• How does communication via social media influence our fundraising efforts?
• How do we ensure donor loyalty in our annual fund?
• How do our communications to our prospects change because of the digital age?
• Is traditional campaign fundraising viable in today’s market?
• How do we engage more of our constituency on the web and measure those outcomes?

There are organizational factors we may also question:

• How do we make our prospect pipeline more effective?
• How do we reach major gift prospects beyond our most loyal?
• Do we have enough fundraisers for our pipeline?
• How do we reach a stretch goal?
• How do we find donors for a new initiative?

Simple metrics – “which prospects have we seen and why?”

In assisting clients, I generally find it helpful to perform a very simple analysis in order to develop a sense of giving patterns.

Using a sample of top donors to the annual fund and major giving for the last 10 years, here are some of the metrics I examine:

• What are their giving habits?
• What are their giving habits to other organizations?
• Where are they located, what is their gender, age and family status?
• What is their capacity to give?
• Do they attend events? Which type of events do they attend?
• How are they connected to the board?
• What is their level of continued support annually?
• Have they volunteered?
• Have they volunteered for other organizations?

This type of analysis can yield interesting statistics, such as those seen by an organization with whom I previously worked:

From a sample of prospects who can give $100K or more

• 72% never attended an event.
• 83% volunteered sometime in their giving history.
• 92% give annual gifts to other organizations.
• 100% had/have board of directors relationships.
• 33% do not have children.
• 62% are women.
• 58% gave to the annual fund consistently for 3 years.

As our mind begins to process this information, we can begin to see who our donors are as well as why they give. In this pattern, we know that volunteering and board relationships are strong indicators of giving, which is comparable to nationwide giving indicators. Would we structure our board differently based on these early predictors? Maybe. Or we might perform deeper analysis to get at the root of why we are seeing these patterns.

Deriving meaningful analysis based on the questions we ask will involve knowing which indicators or metrics help us answer these questions. This requires knowledge of why prospects give. This information usually comes from prospect researchers or as fundraisers. If our prospect research team is performing analysis, they should have a profound understanding of how charitable gifts are given and asked for. For example, it is a widely held belief that those individuals who give charitable gifts to other organizations are also likely to give to ours, thus it seems prudent to investigate our prospects giving to other organizations.

A word about data

Good analysis is built on solid data that occurs in a flexible database, which has reporting features that provides daily metrics. These reports should be accessible to all staff, in real time. Data must be clean and consistent. Data that was collected on only a portion of our donors and/or prospects will provide information solely on that populace, possibly providing skewed information based on the largest pool of our database.

As relationship building for fundraising is broadening to include annual fund prospects and volunteers to organizations, it is best to collect data on all or none. A comprehensive plan of collecting data on prospects requires a thoughtful approach to the questions we want to answer. A data plan should include evaluation of which screening vendors can provide the metrics we wish to use, how the data will be added to the database and who will manage the data afterwards. Data does not clean and maintain itself. Careful planning to this measure will afford constantly updated metrics and analysis allowing for agile decision making.