5 Ways Data Can Enhance Your Donor-Focused Fundraising

Successful fundraisers know their donors. It’s a truism long repeated in the philanthropy world, though fundraisers’ understanding of its meaning has evolved over time. Recently, many fundraisers have shifted from a technology-focused “cash machine” model of donor relations — in which donors are expected to spit out donations in response to solicitations that press the correct buttons — to a donor-focused “friendship” model, in which fundraisers focus on building human connections and developing personal relationships with donors.

While the shift to a donor-focused approach is laudable and, I believe, likely to be effective in improving fundraising success in the long term, fundraisers need to be careful not to lose sight of data in the move toward relationship-based fundraising. To develop a successful donor-focused strategy, fundraisers need to rely on rigorous analysis of high-quality data to understand the characteristics and motivations of their particular donors and prospects, as well as the nature of their organizations' existing relationships and the fundraising landscape in their targeted communities. This data-grounded understanding provides a necessary foundation for effective connection and relationship-building.

To support a successful, donor-focused, relationship-based fundraising strategy, organizations should collect and analyze information on donors, prospects, past campaigns, public perception, peer organizations and best practices to create a broad and robust data framework from which to work.

1. Segment donors
Basic donor and campaign records can be a treasure trove of important, relationship-building data if used skillfully. A look “under the hood” of an organization’s fundraising database should provide data that can be analyzed to identify clusters of like-minded donors around which to build a tailored personal engagement strategy.

While donor segmentation is a routine part of fundraising (e.g., segmentation by gift size or recency), effective donor-focused segmentation goes beyond the basics to identify distinct combinations of qualities that define a specific organization’s subsets of donors. The segmentation process should take into account a variety of individual characteristics, such as:

• Reason for engagement with the organization
• Existing relationships with the organization or its members
• Geographic location
• Demographics (e.g., age, sex, marital status, ethnicity)
• Donation method (e.g., online, paper, in person)
• Communication preferences (e.g., social media, email, post)
• Timing of donations
• Donation amounts

Useful donor segments form true “culture groups” with whom fundraisers can establish lasting and fruitful relationships using culturally appropriate communication, cultivation and solicitation methods. Robust and accurate donor and prospect segmentation is absolutely essential to a data-driven, donor-focused fundraising strategy because segmentation allows a fundraiser to understand and connect with donors and prospects on a human scale. Ideally, all data analysis and research projects should reflect and inform an organization’s understanding of its donor segments.

2. Investigate prospects
While most fundraisers understand the importance of investigating the giving potential of prospective donors, prospect research should go beyond wealth information to include demographics, relationships and other aspects of personal background that may influence a prospect’s potential connection with an organization. Prospect research should take into account how the prospect under consideration fits into the organization’s donor segments or culture groups, and how these cultural characteristics will influence the long-term cultivation and solicitation process.

3. Interpret history
Rigorous analysis of past campaigns can reveal important information to inform a donor-focused strategy. While simple campaign “postmortems” are routine, they are not always based on fine-grained, objective data that provide a clear picture of the campaign over time. In-depth campaign performance analyses allow organizations to understand how specific variables (e.g., donor characteristics, instances and amounts of donations, solicitation approaches, marketing efforts) relate to the success or failure of a campaign.

Interpreting previous donor engagement and campaign performance through the lens of data, rather than anecdotal perceptions, can give fundraisers the tools to build an effective fundraising strategy and avoid costly mistakes.

4. Survey constituents
Fundraisers often rely on instinct, assumption or anecdote to gauge how their organization is perceived. While this approach may seem intuitive, surveys designed to gather donor and community feedback can reveal important information that could change the course of fundraising and marketing efforts, with dramatic impact on fundraising success. Brand perception analyses allow organizations to survey current and prospective donors throughout their community or region of interest. Survey results can be analyzed in the context of donor segments and demographic characteristics, and provide valuable information about how community members perceive, value, interact with and give to the organization.

Fundraisers also may fail to conduct message testing before initiating a campaign, assuming that a message that resonates “in-house” will also resonate across donor segments. This assumption is risky, as a misaligned message can damage relationships with donors and prospects alike. High-quality message testing helps fundraisers ensure that their campaigns resonate with the intended audiences and spark the kinds of human connections that lead to strong, long-term donor relationships. An initial investment in message testing allows fundraisers to allocate time, resources and human capital toward effective campaigns.

5. Benchmark peers and evaluate best practices
Industry-level data helps organizations understand their fundraising efforts in the context of their peers and the greater fundraising landscape. Benchmarking, in particular, adds a crucial level of perspective to internal understanding of fundraising effectiveness by providing information about the fundraising histories of peer organizations. Key benchmarking data points may include: solicitation techniques, cultivation strategies, online and marketing strategies, and campaign goals and results. It is important to allocate time for benchmarking and best-practices research because these projects allow for comparisons that isolate and identify particularly effective or ineffective strategies, saving valuable internal resources in the long term.

Make connections for success. Every development office has limited staff and time. Given these limits, fundraisers cannot afford to waste precious time and resources on strategies that are not backed up by data. A strong data framework allows an organization to make the most of a donor-focused fundraising strategy to build and sustain vibrant, long-term, fruitful relationships across a thriving and committed donor base.

Rebecca Huenink is a grants consultant at Hanover Research. Her career has focused on helping public benefit organizations succeed. She has more than a dozen years of experience in the development arena, providing fundraising and strategic support to a wide variety of large and small organizations. Rebecca’s fundraising expertise focuses on donor stewardship and cultivation, annual campaigns, capital campaigns, board development and training, reaching younger donors, and donor-focused fundraising strategy. She particularly enjoys helping organizations leverage the resources they already have to drive an increase in fundraising revenue.