The ‘Catch 22’: Using Analytics to Demonstrate Impact

Andrea Steffes-Tuttle Nonprofit, Predictive Analytics

There’s a common ‘Catch 22’ that nonprofits experience, one you’ve most likely had to confront if you’re involved in acquiring donors and leading direct marketing campaigns. As a nonprofit, your ultimate goal is to create an impact. You need to demonstrate that impact in order to access funding, but alas, you need funding to create infrastructure and provide the capacity to make an impact.

It’s a vicious cycle, but one that can be broken with advanced analytics.

Donors Demand Evidence

Metrics for nonprofits can be more elusive than they are for for-profit companies. Instead of profits being the end-all, be-all, nonprofits must report on their revenue, the efficiency of their dollars, and the impact of those dollars.

In the past, some organizations could count on their passionate pleas for support to deliver a response from donors. But now there are too many competing pleas for attention. In order for an organization’s voice to be heard above the noise, they must update their strategy and provide clear evidence of their performance.

The Balance summarizes this problem well;

“In an era when more and more social investors, individuals, institutions, and governments, are asking for evidence of performance in their grant-making, smaller organizations cannot afford to rely upon traditional pleas for support, many of which are based upon the size of the problem or need to be addressed, or upon how hard the organization is working… While these approaches worked in the past, as the outcomes movement spreads those who lack evidence of performance are increasingly going to be left behind.”

Advanced Analytics Improves the Lives of Donors and Employees

There is a growing urgency to conquer the data hurtle and make better use of data. More and more, nonprofits are beginning to see the value of using advanced analytics to guide decision-making and evaluate performance.

Donors love to see that their donations are put to work and that they are working efficiently to get the most out of every dollar. The increased efficiency that advanced analytics creates causes big changes internally and externally.

Cut the Fat, Focus, and Improve Results

When it comes to fundraising, the spray-and-pray approach is expensive and doesn’t provide the personalization that consumers demand. On the other hand, individualized donor outreach is labor intensive. With advanced approaches like predictive analytics, organizations can focus their outreach efforts and campaigns to those most likely to donate with a high degree of accuracy.

With a data-led approach, nonprofits can prioritize high-touch personal outreach, creating more efficient and effective communication, and reduced marketing costs. It’s a win-win! Nonprofits spend less effort to get better returns and donors get more personalized communication from organizations they care about.

Cost Isn’t an Excuse Anymore

If the price is what’s keeping you from adopting advanced analytics in your organization, you should know that cost should no longer be a limiting factor. With the democratization of data, technology and sophisticated approaches are more accessible. Honestly, the benefits outweigh any cost. Advanced analytics is a sure way to get more out of what you spend. An advanced analytics tool, like Lityx, pays for itself, and then some.

Give Donors What They Need to Choose to Support Your Organization

You can see a great example of the impact of advanced analytics in this case study that illustrates how a national nonprofit used data to improve their direct mail campaigns. With the help of advanced analytics, a nonprofit cut both their time and their spend on a yearly direct mail campaign by 90 percent. Think about how your organization could leverage the extra budget you’ll gain from making your campaign dollars go further!

The proper use of advanced analytics gives nonprofits the power to break out of the “Catch 22” cycle. By investing in advanced analytics up front to power your campaigns you can transform your results. With increased efficiency and ROI, you’ll have the evidence you need to pave the way for future fundraising and get a lot more bang for your buck.

Learn more about advanced analytics for nonprofits >>