Estimated reading time: 3 minutes, 42 seconds

analyticsNonprofits are under more pressure than ever to personalize their communication with donors. We live in a consumer-centric world where Netflix, Amazon and even my NEST thermostat knows me and can provide a personalized experience. At the same time, the manual process of keeping up with donors has become logistically unmanageable for many nonprofits who are trying to focus on their cause.

The typical donor development professional at a nonprofit can realistically manage up to one-hundred personal relationships at a time. This means that only a charity’s top donors are getting a personal giving experience - while the bottom 90% of the file get very little individualized attention and often lapse after only one or two gifts. With such high demands and limited bandwidth, development executives struggle, many burning out within 16 months on the job. How can nonprofits and busy fundraising executives build personal relationships that donors expect with their limited bandwidth and budget?  

The use of big data has exploded in recent years, and the potential for data analytics in the nonprofit sector is game-changing. Nonprofits are now able to turn to predictive analytics to identify patterns in donor behavior, assess gift amount and frequency, better understand donor passions, and communicate to donors individually, all while saving precious staff time.

With staff time stretched thin and donors expecting a more personalized experience, nonprofit leaders can no longer ignore predictive analytics as the future of fundraising. Here are three ways nonprofits can utilize powerful software to help build personal relationships with the donors at scale:

Identifying patterns

Predictive analytics can identify patterns giving frequency, giving capacity, wealth indicators, donor passions, and more. Even bubbling suggested gift asks based on simple RFM (recency, frequency, monetary) segmentation can help development officers and direct marketing professionals become better equipped to make the “right” asks based on each donor’s giving preferences. If your current software doesn’t suggest gift asks based on this type of data you may be able to do some of the work yourself using an Excel template. Once you have segmentation based on giving data, you can begin to overlay specific call to actions for each donor’s particular passion. This data can often be derived by looking at campaigns they have given to in the past or even scraping their social profiles. This type of “passion extraction” often requires more sophisticated tools to truly scale. That said, asking for the right amount around the right project/passion and at the right time can often cause exponential increases in giving across the file.

Receiving notifications to take action

For busy nonprofits, perhaps the biggest relief delivered by predictive analytics is alerts to signal when a donor is about to lapse or a donor they have the potential to change their giving pattern. Nonprofits should be notified of soon-to-lapse donors or donors who have extra unused capacity based on giving frequency, history, wealth appends, etc. Your CRM system should look for trends in giving behavior and attrition, then quickly bubble up lapsing donors. It’s not enough to simply generate reports, donor development professionals need to be notified in real time of key opportunities in order to prevent lapsing or capitalize on changes in donor giving patterns.

Automating communication based on predictive data

For the creme de la creme of innovative nonprofits, it’s not enough to simply allow predictive data analytics to inform donor development professionals. Leading-edge charities would prefer to fully automate individualized streams of communication based key analytics. In a perfect world, organizations can map out donor journeys for each type of donor and then automatically send emails, create tasks or flag data based on donor behavior. This type of automation is already happening at the world’s most innovative for-profit companies and will soon be making its way into the nonprofit world.

Whether you are a small charity trying to punch above your weight class or a large nonprofit trying to maximize marketing ROI, let the data do the work. Predictive data analytics is transforming the nonprofit sector by helping development officers and marketing staff make better asks, improve retention and create truly personal donor relationships.

Gabe Cooper is the Founder and CEO of Virtuous, a nonprofit CRM that acts as a virtual command center enabling nonprofits to tailor their messages to individual donors, track donors by their passions or geographic location, and even use big data analytics to see which relationships need more attention.

Last modified on Monday, 17 October 2016
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