Nonprofit Analytics: Leverage Data for Fundraising Success
Nonprofit analytics are powerful. Maximize your fundraising and stewardship efforts—all by using your existing donor data.
Simply collecting data for your nonprofit isn’t enough. To learn from your data, you have to analyze it effectively, too.
That’s where nonprofit analytics comes in. This process takes raw data points and turns them into actionable insights about how to improve your outreach, increase revenue and retention, stimulate growth, and boost overall fundraising efficiency. To help you get started, this guide will explore the following nonprofit data analytics basics:
Let’s get started so you can learn how to take full advantage of the metrics sitting in your organization’s database.
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. Analyzing your data successfully can help you improve everything from fundraising to communications to program delivery.
Types of Nonprofit 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 to give you a better understanding of your strategies’ performance.
Diagnostic analytics, which provides answers as to why particular events and trends occurred in the past so you can adjust your strategies in the future.
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.
Predictive analytics involves the use of predictive modeling: a broad mathematical strategy that uses current and past data to predict future behavior, actions, or outcomes. Choosing a reliable fundraising firm with access to the best predictive modeling tools can help you quickly and efficiently leverage your nonprofit’s data analytics to its fullest potential—all without putting extra strain on your team.
These analytics often work hand-in-hand to create a more complete picture for nonprofits. In particular, many data analytics tools or professional consulting firms pair descriptive analysis with diagnostic analysis, as they provide a thorough snapshot of past operations. Or, they might combine predictive analysis with prescriptive analysis, as together they provide an effective plan for future action.
Benefits of Nonprofit Data Analytics
Nonprofit data analytics can only benefit your organization. After all, the entire point of analytics is to provide insights that help you:
Measure the success of your various campaigns. Data analytics help you determine if your fundraising initiatives are achieving results to adequately move your mission forward.
Intelligently allocate resources. Nonprofit data analytics help you determine which aspects of your fundraising strategies and tactics are the most (or least) successful at engaging donors. With this information, you can better allocate staff time and resources towards the activities and strategies that will make the most impact.
Create improved strategies for the future. Predictive, prescriptive, and diagnostic analytics all provide valuable insight into how you can create more effective strategies going forward, enabling you to raise more funds and better engage donors.
From managing multi-channel year-end fundraising initiatives, to annual budgeting, to day-to-day donor stewardship and renewal opportunities, there is virtually no area of your fundraising program that can’t be improved with careful attention to nonprofit analytics.
How to Implement Data Analytics for Nonprofits
According to Salesforce’s nonprofit trends report, over 76% of nonprofit organizations determined that they need to develop a dedicated data strategy. In other words, even though 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 the steps your organization can take to adopt informative nonprofit analytics:
Consistently track the results of your fundraising initiatives — by campaign, by file segment, by channel, etc.
Create a structured process for collecting data to monitor key donor giving trends in your nonprofit’s CRM. Consider a professional audit of your data.
Keep your data clean and up-to-date with good data hygiene practices. Invest in the right tools, technology, or consultation services to develop predictive models to maximize both retention and net revenue.
Meyer Partners offers sophisticated nonprofit data analytics services to optimize fundraising strategies. To find out more about our services, set up a no-cost consultation with our team.
Metrics to Track for Nonprofit Analytics
The key to nonprofit data analytics is for your nonprofit to collect the right data from the start, which you can then review to provide a full picture of strategy performance. There are a variety of metrics to pay attention to across various channels, including:
Comprehensive Donor Value
The best way to build a strong donor base and raise more for your mission long-term is to take a holistic approach to nonprofit analytics. Instead of focusing only on isolated metrics like donor acquisition and retention rates or your fundraising appeals’ response and conversion rates, analyze your donors’ comprehensive giving trends and value.
Your ultimate goal should be to acquire and retain more donors with the strongest long-term value to your nonprofit. This allows you to get the highest return on your investment by prioritizing prospective, current, and lapsed donors with the greatest long-term giving potential.
To achieve this goal, you’ll first need to analyze your nonprofit’s cost to acquire and individual donors’ projected lifetime value.
Together, these two metrics will help you forecast your long-term return on investment (ROI). Let’s break down each metric in more detail.
Cost to acquire
Cost to acquire is the amount of money your nonprofit spends to bring in one new donor. If you’re running a direct mail campaign to acquire new donors, this metric would account for associated costs like rental lists, printing, postage, and any marketing or design services you use. Calculate your cost to acquire using the following formula:
[Net cost of acquisition efforts] / [Number of donors acquired] = Cost to acquire one donor
This metric also accounts for the cost to re-acquire lapsed donors, which is often the most cost-effective way to increase the size of your donor pool since you already have their information and know they have a connection to your nonprofit.
Donor lifetime value (LTV)
LTV projects how much revenue a single donor will contribute to your nonprofit throughout the entire time they’re involved with your organization. While you should take into account individual donors’ giving potential and affinity for your cause to get the most accurate predictions, you can get a general sense of the LTV or your nonprofit’s average donor with this formula:
[Average donor expectancy] x [Average donation amount] x [Average donation frequency] = Donor lifetime value
Estimating a donor’s long-term value can help you determine how many resources to allocate toward acquiring a specific donor and sustaining that relationship. LTV also lets you know who your most valuable prospects and donors are, allowing you to put more effort into stewardship by offering opportunities to deepen their engagement with your nonprofit.
Return on investment (ROI)
Analyzing both cost to acquire and donors’ projected long-term value helps you determine the potential return on investment (ROI) of acquiring and retaining certain donors.
ROI refers to the total amount of revenue generated from donor throughout their involvement with your organization as compared to the cost of acquiring and stewarding that relationship. To calculate your ROI, you’ll need to track all of your expenses and compare them to the total funds raised from individual donors.
To see the highest return on investment, we recommend prioritizing direct mail as your primary fundraising strategy. Although some nonprofits see direct mail as outdated, it remains one of the most effective methods of acquiring donors and soliciting high-value donations. Ultimately, donor-driven direct mail campaigns informed by nonprofit data analytics are your best bet for strengthening your donor base and fundraising potential long-term.
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:
Email open rate
Open rate is the percentage of recipients that open each email you send. Open rates can tell you how compelling your subject lines are and if your email communications are relevant enough to pique the interest of specific audiences.
Click-through rate (CTR)
CTR measures the percentage of recipients who click the links included in an email. To increase your click-through rates, try creating more straightforward, empowering calls to action. Recipients won’t click on a link if it isn’t clear where it’s taking them, so be sure to include relevant links and clearly explain them.
Conversion rate
Just like direct mail conversion rates, your email conversion rate is 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)
Similar to direct mail campaigns, measuring the amount of revenue generated from an email campaign as compared to the cost of running the campaign helps you determine if certain email strategies are worth your investment.
By investigating these nonprofit analytics metrics, 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.
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
This is the amount of time visitors spend on your website. Typically, a longer session duration indicates more interest in your organization.
Organic search traffic
Traffic from organic search refers to the number of visitors who access your website via Google search. This metric can provide insight into the success of your search engine optimization (SEO) strategy.
Referral traffic
Referral traffic, on the other hand, measures the number of visitors who come to your website from other websites. This metric demonstrates how your site fits into the broader online ecosystem, helping you identify opportunities to expand its reach.
Conversion rate
Understanding your website’s conversion rate allows you to tailor your forms and CTA buttons to create a better user experience that ultimately leads to more donations and sign-ups.
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.
Meyer Partners: The Best Service for Nonprofit Analytics
Meyer Partners is 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 data experts who can leverage your nonprofit’s metrics to create personalized strategies to better steward your donors, improve marketing outreach, and maximize fundraising success.
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 journey 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:
A Nonprofit Direct Mail Fundraising Guide: How to Succeed. Dive deeper into direct mail fundraising strategies and learn how to improve your approach based on your direct mail data.
Donor Acquisition: The Complete Guide to Attracting New Donors. Master the art of donor acquisition with our definitive acquisition guide's data-driven insights and strategies,
Donor Stewardship: How to Create & Use a Stewardship Matrix. Learn more about using your data to improve your approach to donor stewardship, ultimately helping you retain more donors long-term.
