The truth be told - databases and fundraising strategy

Professional Fundraising

January 2008

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As the head of an agency which specialises in data analysis for not-for-profits, I’m constantly talking to people about the importance of looking as closely as possible at their database to establish what their donors are actually doing so that it can inform their fundraising strategy.

And when people take that advice, they’re amazed at how a better understanding of data can help them raise money.

One recent incident that has brought home to me yet again just how vital this approach is was when I was working with the Lost Dogs’ Home in Melbourne, Australia. Its telephone fundraisers believed they had a problem getting donors to upgrade because they were too old; the main excuse they heard from people who didn’t want to sign up to a regular gift or to upgrade their gift was: “I’m too old, I’m on my pension”.

Initially, I had assumed that as they were on the frontline talking to the donors they must have been right. However, when we looked at the data, it didn’t back up what they were saying. The fundraisers would speak to a variety of individuals, from young people who gave a myriad reasons for not giving or upgrading, ranging from “I’m moving house” to “I’m having a baby” to older donors who seemed only to have one excuse – that they were too old. As this was the excuse they heard the most often, it was sticking in their minds.

If the Home had taken what they said at face value, they might have been tempted to stop call-ing anyone over the age of 65. Yet when they looked objectively at the data, there was no good reason to do so, because what it revealed is that there were other factors, not just age, impacting on conversion figures.

This is a classic example of how, even though the fundraisers were not wrong in what they were saying, their interpretation of what was happening and why was out of sync with the actual results. Too often charities rely on gut instinct, anecdotal evidence, or just personal taste when making decisions about where to spend their fundraising dollars. Too often, the data just doesn’t back them up.

Apart from analytical data which involves a char-ity looking at its own donors and their behaviour, there is a wealth of environmental data that offers the bigger picture, available from all sorts of sources. In the UK there is work produced by the NCVO, Institute of Fundraising and nfpSynergy, while in Australia we have Givewell, Pareto Benchmarking and statistics from the tax office.

These environmental data sources can tell us a lot about how much people are giving overall, or whether income generated by particular techniques, such as face-to-face fundraising, is growing. Yet while they can be a good guide, ultimately charities’ own databases provide the best possible source ofinformation about their donors – information which should be used to inform internal strategies.

For example, the idea that fundraisers should go after corporate and event pounds could be considered contradicatory to the findngs within environmental research. For example, the NCVO’s 2007 Voluntary Sector Almanac highlights how just 3 per cent of income comes from private organisations, imply-ing charities would be better off using other more profitable techniques. But try telling this to Comic Relief, which generates much of its multi-million pound fundraising total from corporates, or to Macmillan Cancer Support, which has a very successful corporate fundraising programme. Clearly for these charities, corporate giving is the biz, but fundraising strategists within other organisations would need to consider the NCVO research alongside their own data before making any decisions.

Similarly, while regular giving or legacies may be seen as the Holy Grail by many, putting a program in place to capitalise on these trends can be prohibitively expensive for some charities and may not be the right thing for them.

The icing on the cake for personalised, one-on-one communication with donors is personal data. Using another example from the Lost Dogs’ Home, it uses donor surveys to gain information including pet names and opinions on animal welfare issues that can be used to tailor communications specifically to an individual.

However, while this approach is successful and appreciated by donors, it has its challenges. The Home has had to develop strict data protocols to ensure its database is accurate and consistent; for example, pet names must be current as writing to donors about their deceased pets is definitely not good donor care.

Charities would need to be very comfortable with their capacity to manage this kind of process before they began; but that doesn’t mean they can’t start finding out more about their supporters as and when they have the opportunity, and building their database accordingly.

So, environmental data can give charities some idea of what’s happening out in the big, bad world, prompt-ing them to look at new ways of fundraising to see if they could fit in with their overall fundraising strategy; but only their own data can tell the truth about their donors and their behaviour. In the end it is this that should drive fundraising strategy.

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