Thanks to technology, nonprofits have never been so powerful. The emergence of new technological solutions has supercharged the way organizations campaign and strategize. And the more the efforts of these movements are infused with tech, the more effective they become. One of the most important tech innovations to emerge in this space has been the increased use of data collection and tracking. With data, organizations can pinpoint the exact areas in which they’re succeeding, and where improvements could be made.

Despite this, Tim Lockie notes on the Nonstop Nonprofit podcast, "While 90% of nonprofits collect data, only 5% of nonprofits use data in every decision they make."

In most cases, charities are unfamiliar with how data works and the benefits it poses. In this article, we’ll be attempting to improve this figure by explaining exactly why data is important, and how your organization can use it to make the most of your efforts and resources.

Why is data important for nonprofits?

Data transforms facts and figures into actionable information you can use to improve your organization’s strategy. In addition to helping your nonprofit make better decisions, data helps prove your positive impact, eases struggles to connect with potential donors, and provides direction for your future fundraising efforts.

Some of the main uses of data include:

• To track wider industry trends, which is to the benefit of everyone working in the not-for-profit field.
• To update your donor databases with ease, and from this, figure out a strategy to improve donor retention rates.
• To identify your weak points and the demographics you’re failing to reach, from which you can build a more effective major donor acquisition plan.
• To make more effective decisions informed by the reality of your organization—its pitfalls and its successes—that will result in more donations being made.
• To build an accurate profile of your donors and supporters, which you can use to create more personal relationships, leading to their continued support.
• To improve communication with your supporters, as you can identify their needs and build a communication strategy around this.
• To understand the financial health of your organization and to devise ways of increasing funding and donations.
• To tell the story of your organization, the progress it has made, and its successes, which will compel more people to support you.
• To improve your marketing efforts and ensure that you’re reaching as wide an audience of people as possible.

Ultimately, with data, organizations are empowered to strategize in a creative, efficient, and effective way.

Understanding Data Collection for Successful Fundraising Efforts

Nonprofit data can broadly be classified under two categories: macro-level data and micro-level data. Macro-level data refers to large-scale demographic or community-level trends. Micro-level data refers to specific information collected directly from individuals served by the nonprofit. Both types of data provide valuable insights and help nonprofits make informed decisions.

Macro-level Data for Nonprofit Organizations

Outputs

These are the data points that represent the concrete results of your actions and efforts. This might include how many people attended one of your actions, how many sign-ups a particular program received, or the number of donations received.

Outcomes

These are the data points that represent the changes that arose as a direct result of your organization’s actions. For example, if you organized a healthy eating initiative for local schools, an outcome would be an overall improvement in the diets of children within the locality.

Impact

This is the measure of the systemic, lasting changes that your organization has achieved. Taking our example from earlier, the community impact of a healthy eating initiative might be an improvement in the overall health of children within this district. This particular category of data is the most difficult to measure.

Macro data is valuable on a big-picture level but can be difficult to generate in the short term. To build up macro data points, organizations are required to gather micro data points, which collectively can create a macro data point. Some of the most important micro-data for nonprofits to collect include:

Micro-level Data for Charitable Organizations

Campaign and action data

Any information related to the fundraising events, programs, and initiatives you organize. Take note of how many new supporters and donors you acquired, the rate of supporter satisfaction, and the donor acquisition cost.

• Financial data: all expenses related to your organization’s work. This includes the expenses incurred from organizing your events, donations, and cash in hand.
• Donor data: this is your way of building a donor profile, and will help you to see which demographics are most and least compelled by your organization. With this information, you can build a more targeted strategy. Make sure to collect information such as your donors’ ages, addresses, employment status, and history as a donor.

Marketing data

This data will help you determine whether your marketing campaigns are worth the investment. For this, you should collect data relating to website traffic and website bounce rates, social media engagement, and email open rates.

Industry data

In addition to collecting data from within your organization, make sure to also track external data related to the industry in which you work. For example, if you’re a movement working to alleviate homelessness, it’s worth noting the rates of homelessness in your country, the number of available shelter spaces, etc.

How to Collect Data for Nonprofit Organizations

Data collection is crucial for nonprofit organizations for impact measurement, tracking progress toward their goals, and making informed decisions. Here are some tips on how nonprofits can effectively collect data: Define your goals, use technology, be consistent, and share your findings far and wide. 

Now that we’ve examined the types of data that charitable organizations need to collect, it’s time to look at how to collect this data. For this, you’ll need tools that turn the information you collect into actionable data points. In our (biased) opinion the best tool for this is Funraise. Here's why.

Funraise is a nonprofit software tool that supports the fundraising efforts of nonprofit organizations. In terms of data collection and analysis, Funraise is the perfect tool for organizations of all sizes.

Their platform provides a fundraising metrics dashboard for data and intelligence, which offers essential insights into the growth of your donations and donor database. With this dashboard, you can organize your data to align with your needs and create both simple and sophisticated donation reports, which you can export and schedule as donation report emails at any time.

With Funraise, you can also use the CRM tool for nonprofit data management to organize your donor records, providing custom data reports, collecting giving history, and ultimately allowing you to track and nurture supporter relationships. Donations can easily be analyzed within the donation CRM, which allows you to run both simple and complex donation database reports from lybunt/sybunt reports to user behavior breakdowns.

Funraise allows effective fundraisers to make the most of the information they collect and create a meaningful strategy with the data they produce.

Best Practices for Nonprofit when Collecting Data

Best practices for nonprofits to consider when collecting data include practicing great data hygiene, letting your technology do the difficult work, analyzing your data consistently, and setting clear goals before collecting any data. Data itself can't help your nonprofit make social impact; structured usage and discipline are the keys to making data work for you.  

Now that you know how to collect data, it’s important to understand the particular requirements and standards to which charities must adhere when collecting this information. As a nonprofit, keep these in mind:

• Provide your team with the training they need to become comfortable with using the data tools you have invested in. Thankfully tools like Funraise are especially easy to use, so your team will grow comfortable with using them in no time!
• Involve everyone in your team in your data collection processes so that data can be seamlessly integrated into the decision-making processes at all levels of your organization, from your Executive Director to your volunteers.
• Consider the purposes for which you’re collecting data before gathering it. Ask yourself: how can this information improve your organization? What insights might this information provide? This will help you to avoid clogging your data storage system with unnecessary information.
• When collecting data of any kind, you must make sure that you have received the authorization necessary to keep and manage this data. While most self-generated data sets do not require prior permission (such as the results you’ve recorded from your own actions), any action taken outside your organization that involves information about your donors, supporters, or volunteers (like emailing, data sales or swapping), is likely to require the consent of those to whom the information pertains. Make sure to review the data privacy laws within your region.
• Our society doesn't often associate data with the not-for-profit sector. Resultantly, those volunteering and working with your organization may be somewhat unfamiliar with, and perhaps even skeptical of, obtaining and using data. Don’t let this perturb you! Make sure to educate your team on the importance of data for nonprofits by showing them the different ways it can help your organization and the vital role it plays in building your strategy—you can start by sharing this article with them!
• Grassroots movements tend to be smaller in size than other forms of not-for-profit organizations. Resultantly, most grassroots organizations have relatively small teams of volunteers. This can make the prospect of collecting data seem even more daunting, as each team member will be required to take on an even larger amount of work. However, tools such as Funraise eliminate this issue entirely—with easy-to-use data analysis, and storage and sharing features—most of the tricky administrative work associated with data collection is automatically completed by these tools, so you don’t have to. This will save your team valuable time and effort while simplifying the data collection process overall.
• Make sure to regularly clean your data files. This means removing any inaccuracies in the information you collect and also deleting any information that is unnecessary.

Why is data important for Non-Governmental Organizations (NGOs)?

Nonprofit organizations, including Non-Governmental Organizations (NGOs), benefit greatly from data. One way NGOs can use data is for program evaluation and impact assessment. Data can also be used by NGOs to improve their internal operations and increase efficiency. Furthermore, data can help NGOs better understand their target audience and stakeholders.  

Once your organization begins collecting data, you can then use it for a variety of purposes. Some of the main ways in which your organization can use data include:

Monitor the success of your actions

With the help of data analysis, assess the performance of the actions and campaigns you have completed. In particular, track event attendance and supporter satisfaction (this can be done by inviting your supporters to complete surveys).

• Measure how many of your event attendees converted into donors, volunteers, or long-term supporters.
• Understand which actions are worth completing and what factors contributed to their success.
• Gain a sense of who participated in your actions and which sectors of your community were missing- make sure to actively target these demographics in the future.
• Chart your donor relations and supporter retention rates- this is one of the most important factors in devising a new engagement strategy.

With data analysis, your actions can be visualized in realtime and in a variety of formats, including through color-coded graphs and detailed fundraising reports. This will help everyone on your team to properly understand the data and its implications.

Streamline funding

• Use data analysis to boost funding and appropriately allocate expenditures.
• Devise a better strategy for utilizing your funds to maximize your resources—this can include donations, funding and membership fees.
• Create an accurate overview of your organization’s cash-on-hand (i.e, the amount of money accessible to your organization at any given time, including bank accounts, paper bills and assets).
• Track cash flows to determine if you can cover your expenses.
• Build an accurate profile of your donor base, and from this, create more targeted actions to increase funding.
• Furnish your stakeholders with in-depth and accurate financial reports.
• Determine how many hours your volunteers are working to understand the time and labor needed to achieve your goals (this information can be beneficial to have when securing grants).

Improve your fundraising marketing campaigns

For many movements, marketing is one of the most important ways of attracting people to your cause. Use data analysis to build the most effective marketing campaigns possible.

• Chart the click rates and traffic to your website, including the number of visitors and the amount of time they spend on your website.
• Analyze your social media engagement, including the engagement rate and number of impressions you receive per post, and build your social media marketing strategies around this.
• Review the success of your email campaigns by analyzing the open rates, and devise campaigns that operate to increase this percentage—after all, according to Brevo, email marketing is the most profitable and cost-effective channel for direct marketing campaigns. Some A/B tests to try are donor segmentation, subject lines, and varied calls-to-action.

Build an accurate profile for your donor base

Data analysis is an excellent way to refine your understanding of the people supporting your organization’s efforts.

Use data to track the ages, locations, educational background, and employment status of your donors. This will help you to identify exactly who your donors are, and begin creating a plan to figure out why people from certain demographics are not compelled by your cause.

Once you’ve grown comfortable with basic data analysis, you can move on to more complex forms of analysis. This includes collecting information about the donation history of your supporters, their interests, and the other causes and organizations they support. From this, you can create fundraising strategies, events, and outreach actions that are more likely to draw your donor base in, thereby increasing their likelihood of giving you their continued support.

Data analysis is one of the most powerful tools at a your nonprofit’s disposal. With data, you can gain insights into your organization’s successes and pitfalls and discover which types of people your organization is most effectively reaching. So make sure to invest in data analysis software to supercharge your efforts and increase your donor base today!

Data FAQs for nonprofits

(FAQ featuring answers from awesome Artificial Intelligence writers + delightful human editors)

What is data-driven marketing for nonprofits?

Data-driven marketing for nonprofits involves using information and insights gathered from data to make informed decisions about marketing strategies, campaigns, and outreach efforts. By analyzing and leveraging data effectively, data driven nonprofits can better understand their target audience, track the success of their initiatives, and maximize the impact of their messaging.

What should a data dashboard include?

A data dashboard is a valuable tool for nonprofits to track and analyze key performance indicators and metrics. Take a look at these nonprofit dashboard samples to design your own data dashboard, and consider including the following components: KPIs, visualization tools, real-time data updates, and custom time frames.

What is an example of a data-driven insight?

An example of a data-driven insight is identifying trends in donor behavior and preferences. Through data analysis, a nonprofit may uncover that donors who receive personalized communication on the impact of their donations are more likely to contribute more, regularly. This insight allows the nonprofit to tailor data driven fundraising strategies to focus on personalized updates and first-hand stories of impact.

How can I make my nonprofit more data-driven?

Utilizing data effectively is crucial for data-driven nonprofits to make significant impact on the communities they serve. Here are some ways that nonprofits can take a data-driven decision making approach: Define clear goals, collect relevant data, analyze it regularly with tools specifically designed for donor analytics, and then use those insights to make great decisions.

How can my nonprofit start using data?

By harnessing the power of a data-driven approach, nonprofits can make informed decisions, measure their impact, and better serve their communities. If your nonprofit is looking to start using data but doesn't know where to begin, here are some steps you can take: lean on technology, identify your goals, take it slow, and look at the data from all angles. 

How can data help nonprofits bring in more donations?

Data can be a powerful tool for nonprofits looking to increase their donations and impact. By effectively leveraging data, nonprofits can better understand their donors, target potential supporters, and tailor their fundraising strategies to be more effective. The more effective the marketing efforts, the better the return on investment.

Sources:

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THE STATE OF DATA IN THE NONPROFIT SECTOR, cdn2.hubspot.net/hubfs/433841/The_State_of_Data_in_The_Nonprofit_Sector.pdf. Accessed 9 Aug. 2023.

“What Is Email Marketing and How Does It Work? Tools & Strategies.” Brevo, 25 July 2023, www.brevo.com/blog/what-is-email-marketing/#:~:text=Email%20marketing%20is%20the%20most,of%20your%20digital%20marketing%20strategy.