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With data analytics, fundraising must be both an art and a science

Fundraising has become more business-like over the past two decades with the introduction of data analysis and various measurement tools.

Unfortunately, not all charities are following these best practices. But merging the art and the science of raising money is a necessity for organizations that need to grow, measure fundraising efforts and make smart resource investments.

The charities that shine in this area include the crucial data component, but also overlay the essential “heart factor” and emotions of fundraising. The last thing the sector needs is for our fundraising appeals to be as warm and inviting as a reminder to get an oil change. We cannot let our business lens of data override the storytelling of fundraising. It is a delicate balance.

Companies like Tim Hortons, Canadian Tire and Petro-Canada have been crunching the numbers since day one. Corporations like these have departments focused on the metrics. The C-suite team makes marketing, human resources and inventory decisions based on data. They know the average number of times a customer visits and how much they spend and how to encourage them to buy again. Implementing integrated customer loyalty programs provides them with mounds of data to analyze their target audience.

In this era of immense pressure on non-profit leaders to do more with less, it can be overwhelming. Especially since there is no time to waste when it comes to solving social issues like homelessness, food insecurity and mental health.

Charity metrics are very different from data used to sell a double-double, a set of new tires or a tank of gas. Data from the non-profit sector and the way it is used can mean someone eating today, finding housing this week, or receiving mental health support this year.

Harnessing the power of donor data to analyze metrics such as second gift conversion, long-term donor value, reactivation, and consecutive years of giving can help your charity go from desperate to thriving. Non-profit staff can stop guessing at their next strategy.

Make no mistake, leadership teams and board members are asking for these numbers from development professionals. I think there is some old-school thinking that analyzing data is a punitive exercise or that, as charities, we do not want to become too corporate.

Let’s look at an example. An organization has 20,000 donors in the database but only 5,000 donors, or 25 per cent, are actively donating. The goal provided by the executive director is to acquire another 1,000 donors. Is the organization prepared to retain these new donors? Does the team have a sustainable stewardship plan? Why are the 15,000 donors in the database not giving now? Is the charity appealing to the lapsed donors enough in a year? Using data to set reasonable benchmarks and track trends is mandatory for fund development.

Looking at donor data analytics to raise more money and therefore help more people, animals or oceans is key to the success of any charity trying to serve their beneficiaries fully. Embracing data and the science of fundraising does not mean giving up the art or the personal connections or the emotional side of the sector.

As a sector, we need both, just like the world needed both Edison and Picasso.

Sam Laprade (CFRE) is a local radio host and director of Gryphon Fundraising.