Donor Analytics: How To Use Your Nonprofit’s Secret Weapon

Research shows 53% of nonprofits collect donor data, and if you're one of them, you may be wondering whether you're tracking the right metrics. After all, donor analytics can inform your donor engagement tactics, fundraising efforts, and campaign plans, getting you closer to your mission.

If you’re not tracking the right numbers or not tracking donor data at all, you’re missing a monumental opportunity for growth.

In this article, we will:

• See why donor data is key to nonprofit success
• Look at often-overlooked analytics you might want to track
• Explain RFM (and give you a free calculator!)
• Share optimal ways to track donor analytics
• Review best practices for donor data

CharityEngine provides donor management and fundraising software to nonprofits, and we’ve been successfully helping our clients find success for decades. One of our biggest strengths is measuring and reporting on donor analytics. For the best approach to donor analytics, get a first-hand look at our CRM, purpose-built to measure the right things to help our clients succeed.

What Are Donor Analytics?

Donor analytics is the process of gathering data points and examining them in specific ways. You can look at analytics to inform the timing or methods of outreach, decide on campaign strategies, or even use data to encourage more foundational messaging pivots.

By collecting and analyzing this data, you'll:

• Know your donors. While understanding their motive to give is important, it’s also important to identify a targeted audience for campaigns or know which donors might be receptive to a peer-to-peer campaign or volunteering for your event. Even identifying a list of donors who live within 15 miles of your office can be game-changing information when you’re trying to staff a community event with volunteers.
• Identify new outreach methods (and dump some that don’t work). If you launch a peer-to-peer campaign and achieve great success, you might consider leveraging those social circles for a text campaign. Similarly, if you tried to be hip (because what’s old is new again) and launched a direct mail campaign that was an expensive flop, you won’t want to try it again.
• Find new revenue avenues. Perhaps you add a matching gift button to your donation page and then track how many times it’s clicked and how much money is raised. Or you’ll do some A/B testing on an email campaign and find out that it’s true, people really do click on images with puppies.

Making data-driven decisions for your nonprofit outreach greatly increases your chances of success.

9 Often-Overlooked Donor Analytics Nonprofits Should Track

Let’s assume you have a CRM with reporting and analytics, and let’s further assume that custom reporting is built in. (If not...once again, call us!) The question is, then, which reports should you run to maximize your actionable insights? Here are nine we want you to check out.

1. Number of Gifts per Donor

While this may seem obvious, let’s look a little closer. If I want to shock you, I’d say that one gift doesn’t quite make someone a donor. Technically, yes, but when you’re looking at growth, the second and third and fourth gifts (no matter how small) are what matter.

Your long-term success is dependent on donors who are sustainers. Getting that one-time donor to sustainer status should be a significant goal. You're doing well if you can get that number anywhere close to 50%.

Tracking this number also illuminates a sustainer or monthly donor who has suddenly stopped engaging. This is a flag to place a personal call; perhaps the donor is sick or annoyed with something about your nonprofit. A simple, heartfelt phone call is appropriate in either case and can even be reparative.  

2. Donor Lifetime Gifts

Otherwise known as Donor Lifetime Value, this number is important to determine the health of your nonprofit in several ways. 

Remember, gifts can be monetary, but there are also in-kind gifts, gifts of volunteer time, or gifts of service. These count when you’re calculating lifetime value.

You get an immediate to-do list when you sort your donors by lifetime value. Your “most valuable” donors should get a phone call or a premium table at an event or a lunch invitation. This is when someone who has given $50 a month for 20 years will be thanked before a one-time $10,000 donor. It levels the playing field.

Donors who are sporadic givers can be enrolled in an email nurture campaign. Those who have only given once can get outreach specific to them.

Once you take away the flashiness of big nonprofit donations, you’ll be surprised to see what donor insights bubble up. Tracking this metric will make it easier to create and nurture personal relationships with donors.

3. Density of Gifts by Geographical Location

How the heck can a city or zip code tell you anything useful about your fundraising efforts? Well, if you’re a statewide nonprofit, is there a county or a region where you find most of your donors? If so, figure out what’s working there and how to translate it to target other areas.

If there’s an area with a few donors, but you’d like more, maybe you should consider a P2P campaign to spread the word about your mission.

Event planning can also be informed by where your major donors are. You don’t want them to have to travel far (with such heavy wallets!). You can also market in-person events, even small meet-and-greet coffees, with a targeted population. 

Knowing where your donors are can show you where to go and where to double down your efforts. It can boost participation in events and campaigns. It’s a valuable paradigm shift!

4. Average Gift

Here’s a metric that will clearly show you fundraising growth. Take your income (weekly, monthly, annually) and divide it by the number of donors to calculate the average gift. Then plot your average gift over time.

• If it’s going up, congratulations! Your engagement and outreach are working.
• If it’s remained stagnant for a while, it’s time to shake things up. Maybe it’s an event, an email campaign with something motivating, like a challenge, or it’s a peer-to-peer campaign.
• If it’s going down….yikes. You will probably want to start by reaching out to your major donors with personal appeals and work your way down the list. Perhaps your largest donors, or your most valuable sustainers, are invited to a “Dinner with the Director” so you can make an in-person plea. 

Regardless of what you find, this isn’t a metric that serves you to ignore. Even when the numbers give you heartburn, stare them down and improve upon them if you need to…but don’t sweep them under the rug, hoping they don’t matter.

5. Retention/Collection Rate

Okay, we’re cheating a little because these are two different metrics. But they go hand in hand, particularly when measuring the strength of your monthly giving programs.

Your retention rate measures how many donors this month (week/year) also gave in the same period previously. If you had 100 donors last February and 80 of those same donors gave again this February, your retention rate is 80%. While that’s pretty good, you don’t want to lose 20% of your donors, so we aim for much higher retention rates with our clients.

For accuracy, you will want to measure retention at the same time every year. Once you identify lapsed donors, you can classify them as LYBUNT (gave Last Year But Unfortunately Not This Year) or SYBUNT (Some Year But Unfortunately Not This Year) to develop a personalized plan to win them back.

Your collection rate depends on how much money was pledged to your nonprofit versus how much you collected. Your collection rates can be greatly improved with good software. Our system rebills and automatically updates credit card information to minimize lost funds, so our collection rates are close to 99%. If your collection rates aren't high, you're missing out on funds intended for your nonprofit. 

6. Volunteer Engagement

Tracking volunteer engagement can measure your nonprofit's engagement with supporters. Use technology to track the number of volunteers, hours worked, retention of volunteers, and how regularly you are adding to your volunteer program.

What can these numbers tell you? When you have a loyal base willing to offer more than financial gifts, you have built a level of community that strengthens everything from your messaging and outreach to grant applications and, on a real level, offers help when you need it.

If volunteer engagement numbers are trending down, it's time to look at your volunteer acquisition and retention strategies and see where you can make improvements. If they're trending positive, double down on volunteer appreciation, because it's working.

7. Social Media Engagement

We often advise nonprofits to heavily utilize social media during campaigns. Offering fundraising updates, issuing challenges, and sharing impact stories can all encourage giving and help with campaigns. 

Measure how your social media posts perform. Which channels see the most followers, likes, and shares? What type of content is resonating? What are the demographics engaging with each platform? Answers to these questions can help hone your marketing strategy and give your team license to try creative approaches.

8. Donation Page Conversion Rates

Perhaps this should be number one on our list! Getting donors to your website's donation page is a start, but the job isn't finished until they click on your call to action and donate. Examining these metrics can be quite illuminating.

For example, how is traffic to the page compared to overall website traffic? If it's low, you might need to review donation page best practices. Once you get supporters on that form, are they clicking "donate?" This conversion is what you want to measure. If you have plenty of traffic but donors aren't converting, you are losing donations and should take steps to optimize the page. Tweaks can include changing the design or even the payment options you offer. 

9. Program Impact

How does your nonprofit work to serve your mission? Measuring the impact of your programs can show you dramatically whether or not your nonprofit's efforts are having the intended effect.

How many pounds of food did you put into the community? How many acres of rainforest did you save, or what was the result of your advocacy efforts? Measuring impact versus goal will keep your efforts focused and can indicate areas that need attention.

How to Understand Giving Habits Through Donor Analytics

Data can help you understand your donors and identify the ways they can support your organization.

Let's say you decide that major gifts and planned giving should be the focus of an upcoming fiscal year. To find those donors, you might want to track wealth indicators. There will be a correlation between data, such as real estate ownership, and the propensity to make a major gift or bequest to a charity.

If you know the business names and titles of your donors, you might decide to ask a business-owning donor to implement a matching gift program to channel his or her donations in a more tax-friendly way. 

There's an objective way to evaluate your donors and their giving habits. Have you heard of the RFM model of donor screening?

• Recency refers to when a donor last made a gift
• Frequency refers to how often they give
• Monetary value gives you an idea of their giving threshold

If you want to check out the RFM of some of your donors, take a look at our Nonprofit Donor RFM Calculator. Make a copy of it before you enter any data as it’s a public document. Once it’s on your computer, it’s yours.

In this calculator, you will enter your constituents and then assign numerical values for each of the three variables. This will give you actionable insights—a 552, for example, tells you that this donor has given recently (5), gives often (5), and doesn’t give much (2). Perhaps you tell them the tangible effects of a $5 increase on their regular gift. If you have a 444, they might just get a personal thank-you note for being a core donor.

Tracking the RFM of your donors will pinpoint who to ask, for what, and when. That’s nonprofit gold!

What's the Best Way to Track Donor Analytics?

No big surprises here. The best way to track every donor touchpoint is with technology. To be more specific, nonprofits should invest in a CRM built for nonprofits. Most nonprofit CRMs will offer reporting and analytics, but you might want to dive a little deeper and see what functionality is off the shelf and what’s available for an added monthly cost. The differences can be significant.

Key reporting and analytic features include giving you the ability to:

• Customize your reports to slice and dice the data any way you want.
• Segment your donors according to any attribute filters you choose.
• Track and measure all engagement, whether it’s them reaching out to you or picking up the phone when you call.
• Measure the fundraising results of campaigns so that you can accurately gauge the costs and benefits to your nonprofit.
• Perform A/B testing on campaigns and have the data to decide the best language, design, or CTA for maximum engagement.
• Manage your volunteers, from knowing who signs up to how much they work and even what happened when you thanked or acknowledged them.
• Extract insights through automated business intelligence that analyzes patterns to highlight opportunities for your nonprofit to grow.
• Scale capabilities according to your growth and needs.

Bug the people in charge of your CRM. If these features aren’t there, see if they’re available for a fee. It sounds a little dramatic, but if you’re not investing in your data reporting and analytics, you don’t actually know how successful your nonprofit is—or how to grow it strategically.

Best Practices for Donor Data

So you know what data to track, why to track it, what you can learn from it, and how technology can help you. We’ve even given you some talking points (or shopping advice) that will help make sure you’re set up for success.

Let’s take a quick look at best practices for data hygiene, or keeping your data current and correct so you can use it.

• Internally, establish governance over your database. Too many hands in the data will make it hard to maintain consistency so your information is reliable and accurate. A trans-departmental committee that collaborates on business rules and policies is a great idea.
• Set a schedule (we recommend monthly) to check for hard bounces (recipients don’t exist, so delete them) and soft bounces (anything could have happened, so send an email asking if they want to remain on your list).
• Dedupe your data! You can merge or delete duplicate contacts.
• Check your data regularly and filter by date of last activity to find lapsed donors. (Hint: reach out to them. They’re easy to re-engage! If you want some ideas of how to do that, give us a call.)
• If you get a new CRM, don’t just do a mass upload of all your contacts. Take the time to do a contact audit, particularly if you haven’t been consistent in your database maintenance.

The Power of Donor Analytics

So why would we call donor analytics your secret weapon? Because knowing giving patterns, demographics, and trends can help you nurture the right relationships in the right way and plan future engagement efforts.

Better relationships, targeted campaigns, and personalized outreach….that’s secret-weapon-status-worthy, isn’t it? After all, raising more money and increasing the number and value of your donors is the holy grail for any nonprofit.

The next step is to make sure you can measure these analytics in your CRM. They aren’t unusual or unique reports, so you shouldn’t have trouble getting the data, but make sure they’re added to a dashboard so you can keep a close eye on them over time. You'll have the ability to see patterns, highs and lows, and act much faster than you would otherwise.

If you're in the market for new fundraising software, there are a lot of great options. And if you're interested in seeing how CharityEngine can help with analytics, engagement, and fundraising, just request a demo and we'll show you what we've got!