Nonprofit Analytics: Leveraging Data for Predictive Modeling
Nonprofit analytics can be an incredibly powerful tool to maximize your fundraising and stewardship efforts—all by using your existing data.
You would be hard-pressed to find a professional, enterprising nonprofit organization that doesn’t collect data on its donors, marketing campaigns, or fundraisers. After all, data provides a roadmap to measure the success of your operations, and who wouldn’t want to know how their organization is performing?
However, simply collecting data isn’t enough to ensure your nonprofit’s success. That’s where nonprofit data analytics comes into play, a process that takes raw data points and turns them into actionable insights about how to improve your outreach, increase revenue, stimulate growth, and boost overall organizational efficiency.
To help you get a firm grip on nonprofit analytics and how you can use your data to its fullest potential, we’ve compiled the following essential subjects on data analytics, data modeling, and data modeling services:
Ready to learn more about how your organization can take full advantage of the metrics sitting in your database? Let’s dive in with a basic overview of nonprofit data analytics.
What Is Nonprofit Data Analytics?
Nonprofit data analytics refers to the process of taking the existing, raw data in your database and analyzing it to draw actionable conclusions about your organization.
The key to analytics is collecting the right data from the start, which you can then review and model to provide a full picture of strategy performance. When setting up your nonprofit’s data analysis system, there are a variety of metrics to pay attention to across your various channels. For easy reference, we’ve categorized these metrics based on the type of data you’ll use to calculate each one.
Fundraising & Donor Data
When analyzing your nonprofit’s fundraising and donor data, consider the information you have on individual supporters as well as holistic numbers from your fundraising campaigns. From this data, you can calculate metrics such as your:
Donor acquisition rate: The percentage of donors who engage with your organization for the first time, either for the entire year or during a specific fundraising campaign.
Donor retention rate: The percentage of donors who continue to give to your nonprofit from year to year.
Donor lifetime value: How much revenue each donor has contributed throughout the entire time they’ve been involved with your organization.
While your donor acquisition rate provides insight into your organization’s potential for growth, your donor retention rate demonstrates how you’re doing in terms of financial sustainability. Donor lifetime value can let you know who your most valuable donors are, allowing you to put more effort into retaining them and offering opportunities to deepen their engagement with your nonprofit.
Email Data
Email is one of the most popular nonprofit marketing channels for both organizations and supporters. In fact, 360MatchPro reports that 66% of nonprofits send fundraising appeals via email, and 33% of donors say email is the marketing channel that most inspires them to give. To make the most of this key channel, track metrics such as:
Open rate: The percentage of recipients that open each email.
Click-through rate (CTR): The percentage of recipients who click the links included in an email.
Conversion rate: The percentage of email recipients who take a desired action as a result of your message, such as donating online, registering for an event, or completing a survey.
Return on investment (ROI): The amount of revenue generated from an email campaign as compared to the cost of running the campaign.
By comparing these rates, you can evaluate the effectiveness of your email marketing strategy and make adjustments as needed. For example, you might test different subject lines to see which one results in a higher open rate, or you could make your call-to-action (CTA) buttons stand out more to boost CTR and conversion rates.
Direct Mail Data
Although some nonprofits see direct mail as outdated, it remains one of the most effective methods of soliciting donations. To make the most of this channel, key metrics to review include:
Response rate: The percentage of recipients who send back the return envelope attached to their direct mail solicitation.
Conversion rate: The percentage of recipients who donate or take another desired action as a result of your direct mail campaign (a slightly broader percentage than response rate).
ROI: The amount of revenue generated from direct mail fundraising as compared to the cost of running the campaign.
Cost to acquire: The amount of money required to bring in one new donor through a direct mail campaign, which can be calculated by dividing the total cost of your campaign by the number of new donors acquired through it.
Direct mail is an essential part of your nonprofit’s multi-channel marketing and fundraising strategies. If you need help creating and analyzing your direct mail campaigns, don’t hesitate to reach out to a full-service nonprofit marketing agency like Meyer Partners.
Website Data
Your nonprofit website serves as a hub of information about your organization and a central location for supporters to get involved with your mission. Optimize your online strategy by tracking metrics such as:
Session duration: The amount of time visitors spend on your website—longer session duration often indicates more interest in your organization.
Organic search traffic: The number of visitors who access your website via Google search, which can provide insight into your search engine optimization (SEO) strategy.
Referral traffic: The number of visitors who come to your website from other websites, demonstrating how your site fits into the broader online ecosystem and helping you identify opportunities to expand its reach.
Conversion rate: The number of visitors who take a desired action—understanding this allows you to tailor your forms and CTA buttons to create a better user experience.
Make sure to analyze these metrics on both desktop and mobile. More than half of all nonprofit website traffic comes from mobile devices, so it’s critical to provide a positive experience for these visitors as well as those who use desktops.
The Benefits of Nonprofit Data Analytics
There are few ways that nonprofit data analytics can’t benefit your organization. After all, the entire point of analytics is to provide insights to measure the success of your various campaigns, intelligently allocate resources, and create improved strategies for the future.
From managing complex year-end fundraising initiatives to annual budgeting to day-to-day donor management, there is virtually no area of nonprofits’ outreach operations that isn’t affected by or can’t be improved with effective data analytics and data modeling.
The 4 Major Types of Data Analytics
Within the broader science of nonprofit analytics, there are four main types of analysis with different goals and prescribed uses. They include:
Descriptive analytics, which visualizes events and trends that have occurred in the past.
Diagnostic analytics, which provides answers as to why particular events and trends occurred in the past.
Predictive analytics, which visualizes and predicts trends that will occur in the future. This form of analytics is particularly useful for nonprofits as they work to streamline and perfect their communication, fundraising, and marketing strategies.
Prescriptive analytics, which recommends strategies to stimulate positive changes based on the results of your predictive analysis.
These analytics work hand-in-hand to create a more complete picture for nonprofits. In particular, many data analytics tools or professional consultant firms will pair descriptive analysis with diagnostic analysis, as they provide a thorough snapshot of past operations, or predictive analysis with prescriptive analysis, as together they provide an effective plan for future action.
How to Begin Implementing Data Analytics
According to Salesforce’s nonprofit trends report, over 76% of nonprofit organizations determined that they need to develop a dedicated data strategy. Clearly, in spite of the fact that most nonprofits engage in some kind of data collection, taking the next step and converting data into usable analytics is something that many organizations struggle with.
Bearing that in mind, consider these steps your organization can take to adopt sophisticated analytics and improve your data strategies:
Find out what channels, programs, and campaigns are important for your organization to track.
Create a structured, formal process for collecting data and tracking key metrics.
Keep your data clean and up-to-date with good data hygiene practices, and perhaps even a professional audit of your data.
Invest in the right tools, technology, or consultation services to begin creating effective models for analysis.
Data analytics is a particularly sensitive and complex process, and as such it requires dedicated tools and professional help to effectively accomplish.
For example, Meyer Partners boasts a wide range of sophisticated data analytics services to optimize fundraising, marketing, and communication strategies. From comprehensive predictive modeling tools to house file maintenance, our professional data services are made to guarantee continued growth and improvement for your organization’s unique needs.
Analyzing Nonprofit Data with Predictive Modeling
Now that we’ve established the fundamentals of nonprofit analytics, let’s focus on a particularly important form of analysis for nonprofits to stimulate growth: predictive analytics, or predictive modeling.
What is Predictive Modeling?
Predictive modeling is a broad mathematical strategy that uses current and past data to predict future behavior, actions, or outcomes. For nonprofits, this might mean that you are able to predict the giving habits of donors a year in advance or foresee the performance of certain outreach activities long before they’re officially launched.
What are the Benefits of Predictive Modeling for Nonprofits?
It’s easy to see how predictive modeling can be incredibly useful for organizations of all kinds. For the nonprofit sector more specifically, these types of analytics are most often used to perfect donor outreach and fundraising strategies.
For instance, predictive analytics and modeling are particularly well-suited for mapping out future donor habits, including giving patterns like how frequently, how much, and when exactly donors are most likely to give. In particular, it can help identify donors with hidden potential who are likely to upgrade their giving into the mid or major donor level. This, of course, can go a long way to help nonprofits make better and more cost-effective decisions about how to build out their fundraising plans.
Of course, the extent of these benefits is completely dependent on the accuracy and comprehensiveness of your predictive data models! This not only means having a CRM or donor database in place to track all the necessary data—it’s also critical that you thoroughly understand your organization’s goals, set the right KPIs, and invest in the right tools or professional services to build out your data models.
What is the Best Tool for Predictive Analytics?
When it comes to investing in the best tool to launch your predictive analytics and modeling strategies, nonprofits generally have two options: invest in your own predictive modeling technology to perform in-house analytics, or invest in a professional data service.
Let’s take a look at these two options in more depth.
If you choose to perform in-house data analysis, you will have the benefit of being able to access your modeling software at any time and gain a direct, more intimate understanding of your internal processes. That being said, this option also takes intensive training and technical expertise to be run effectively. In fact, it will likely require a dedicated team to manage these complex and delicate systems.
If you choose to partner with a dedicated nonprofit data service, the effectiveness of your data models and your ability to observe and manage your analytics will be entirely dependent on the service you use. However, if you’re mindful to pick a reliable, reputable firm, then you will be able to quickly and efficiently leverage your nonprofit’s data to its fullest potential—all without putting extra strain on your team.
If you’re confident that you’ll be able to invest the extensive time, resources, and manpower required to get an in-house predictive data analytics system off the ground, there are several software solutions that should hopefully be able to accommodate you.
However, if your organization doesn’t already have a set of data experts on staff with hours to spare, we strongly recommend investing in the services of a professional consulting firm that performs nonprofit analytics.
Meyer Partners: The Best Service for Predictive Analysis
Who We Are
Meyer Partners isn’t your typical consulting firm. We are a full-service communications, marketing, and fundraising consulting agency. That means that we are uniquely qualified to offer top-down solutions for virtually all of your organization’s operations, including comprehensive data analytics services.
Our dedicated team includes fundraising and data experts that can leverage your nonprofit’s metrics to create the perfect, personalized strategies to better steward your donors, improve marketing outreach, and maximize fundraising success.
How Our Data Services Can Help You
The data analytics services offered by Meyer Partners are as robust and powerful as every other service touted by our agency. In particular, our best-in-class predictive analytics services allow us to mine your data house files and model donor behavior with incredible accuracy.
With these intuitive models, we build intelligent plans of action for you to succeed in savvy, long-term donor relationship-building—all while using fewer asks and generating far higher margins of revenue.
Additionally, we also boast data services such as:
Sophisticated fundraising campaign analytics
Comprehensive program analytics
Intelligent donor segmentation strategies
Ongoing house file maintenance
Deep data auditing and data hygiene
If you’re searching for the most reliable method to begin performing data analysis—or receive professional consultation for any area of your marketing, communication, or fundraising operations—Meyer Partners is the top solution for you.
Additional Resources
With these insights, you should be far better equipped to navigate your nonprofit analytics and choose the right tools or professional services to run and manage these powerful models.
Want to learn more about nonprofit data, data-driven strategies, and data services that could help your organization? Take a look at these resources:
How Clean is Your Donor Data? Explore the fundamentals of data hygiene, major benefits, and what it takes to maintain the integrity of your donor data.
Professional Fundraising Consultants: Find the Right Firm. Find the right consultant to take your nonprofit operations to the next level with this dive into the best consulting firms.
Donor Acquisition: The Complete Guide to Attracting New Donors. Master the art of donor acquisition with the data-driven insights and strategies offered by our definitive acquisition guide.