Like all other organizations -- including those in the private and public sector -- nonprofits have to strategically and astutely separate essential investments, with those that are valuable and useful, yet not necessarily “must-haves”.
And it is in light of this distinction – and with respect for budget limitations, which is always a factor – that we relay a fact that continues to be verified in successful nonprofits across the country: advanced analytics capacity is mandatory, not optional. Below, we highlight the 5 key reasons why.
1. Increased Personalization
Advanced analytics increases personalization, which means that specific messages and assets (e.g. ebooks, infographics, links to videos, etc.) can be targeted towards certain donor groups based on gleaned variables (e.g. interests, behavior, preferences). Personalization greatly enhances interactions, “stickiness”, shares, relevance, and everything else that nonprofits want and need from their targeted campaigns.
2. Faster, Smarter Decision-Making
Fundraising campaigns are not “set it and forget it” programs. They are multi-faceted, multi-layered events with many moving pieces: some that are on-track and heading in the right direction, and others that are not generating desired or expected traction and engagement.
Advanced analytics gives nonprofits unprecedented visibility into what is working and what is not, so they can make faster, smarter decisions on what channels to use, which donor segments are driving the most value, which messages/assets are generating the most engagement, and so on.
3. Set Aggressive but Realistic Goals
Nonprofits should aim high when it comes to revenue goals. However, unrealistic expectations are more than disappointments waiting to happen: they can derail strategy. If expectations are too low, nonprofits will not have ready-to-implement plans for how to make the most profitable use of the additional revenue. And if expectations are too high, then planned investments or purchases will have to be reset or paused, which has a cascading negative impact.
Advanced analytics gives nonprofits reliable, science-based predictions that they can use to shape expectations and guide investment/spending plans. What’s more, this intelligent forecasting is not just as the macro level (e.g. total revenue expected for the campaign). Nonprofits can drill down to predict revenue for each donor segment, time period, and so on.
4. Proactively Identify Major Donors
Nonprofits have to be very good at proactively spotting potential major donors, and then skillfully ushering them up the giving pyramid. This process often involves hundreds or even thousands of touchpoints, and takes several years. However, the rewards to all parties -- including of course major donors who are making a major difference! -- are definitely worth the effort and investment.
Advanced analytics helps nonprofits identify these potential major donors early on in their giving history, so they can be engaged accordingly. Data can also be leveraged to determine what kinds of messages and channels are most effective with major donors overall, as well as segmented major donors (e.g. families, individuals, corporations, etc.).
5. Generate Personalized Ask Amounts
Last but certainly not least: advanced analytics enables nonprofits to personalize ask amounts, which are much more effective for generating engagement and donations than open-ended (i.e. fill in the blank) or tier-based (e.g. $50, $100, $200…etc.) requests.
For example, Texas-based PBS affiliate TV station KLRU used personalized ask amounts to increase giving by 76% (read more about this here). And Connecticut-based Salisbury School used personalized ask amounts to boost participation rates by more than 112.5%, and increase the amount of donors contributing $100 or more by 43% (read more about this here).
If your nonprofit has the resources – including the capital, technology and talent – to make advanced analytics work in-house, then we advise you to make this among your top priorities; if not your most important aim.
On the other hand, if you are like most organizations – not just in the nonprofit sector, but the private and public as well – and do not have the capacity you need to launch and manage an advanced analytics program, then working with a proven partner that specializes in serving nonprofits is the way to go. You will see the measurable rewards, and the only regret you will have is that you did not do it sooner!