nonprofit donor data analytics

Nonprofits-Your Data is Your Most Valuable Asset

Art Warren Nonprofit

The Secret to Reaching Individual Donors

It’s no secret that individual donor contributions make up the bulk of revenue for many nonprofits. In 2016, individuals gave $281.86 billion and accounted for 72 percent of all giving, according to Charity Navigator. This at a time when total giving to charitable organization reached a record high level of $390.05 billion. Now more than ever, people are in a giving mood. That’s good news for nonprofits.

However, convincing these generous individuals to choose a cause from the estimated 1.5 million charitable organizations in the U.S. is only becoming more competitive. And while nonprofits already have oceans of information about their supporters, volunteers, activists, members, and other constituent groups, far too few of them are leveraging their data to make their fundraising and advocacy campaigns stand out from the crowd.

In his book, Data Driven Nonprofits, Steve MacLaughlin explains that nonprofits often get overwhelmed by managing the steady stream of data they store across multiple structures and systems. With their data siloed, nonprofits also often fail to see how extremely valuable data is to their return on investment (ROI).

At the same time, when nonprofits do generate insights from the data they are producing, analysts and marketers often don’t know what to do with their observations. The insight to action gap remains far too high.

The average nonprofit is missing out on $3,781,461 in untapped giving potential.

According to Target Analytics, the average nonprofit is missing out on $3,781,461 in untapped giving potential. The research firm’s analysis revealed that nonprofits have the potential to increase annual donors’ contributions by an average of $52 and increase major donors’ gifts by $1,197. That’s a lot of money being left on the table.

The truth is that if nonprofits listed data on their balance sheets, it would be worth more than just about anything else. The reason? The raw information holds insights that lead to more successful campaigns. To make their fundraising efforts generate more revenue, nonprofits should be using advanced analytics to ask questions like these:

  • Which supporters are most loyal?
  • Which email or direct-mail campaigns generate the most donations?
  • Which programs need to improve the most?

How to Reach More Individual Donors with Direct Mail

These days, marketing channels like social media, email, and direct mail are becoming saturated. Potential donors are bombarded with a high volume of marketing messages. To be heard-and to increase your chances of individual donors choosing your organization-you have to be smarter about your data. Savvy nonprofits are using advanced analytics to scale their outreach efforts through targeted and personalized marketing programs.

One of the most popular-and effective-marketing channels for nonprofits is direct mail. But the costs for design, printing, postage, and paper can diminish the return on investment for many organizations. Thankfully, advanced analytics can improve the efficiency and cost-effectiveness of direct mail campaigns.

For example, Lityx was recently asked to improve the time-to-market and reduce modeling costs for a client’s direct mail program. This particular client executes marketing campaigns to approximately 5,000,000 individuals about 24 times a year. Random mailings across the database performed at a 1.25% response rate with an average value of about $13.50 per responder, and a fully burdened mailing cost of $0.40 per piece.

Lityx automated the client’s modeling process to speed up the amount of time it took to deploy the campaigns, while making them more effective. Previously, the client spent 40 hours on each of the 25 models used for the direct mail campaigns, for a total of 1000 hours. But with Lityx, all 25 models were built in just 60 hours.

The advanced analytics from Lityx helped the client achieve:

  • 90% savings in development costs for series of 25 predictive models.
  • Improved model lift, in less than 10% of the time.
  • Projected incremental 76,000 responses and $1.72 million customer value.

This is just one illustration of how nonprofits who embrace advanced analytics will be able to build more efficient, profitable relationships with donors in today’s competitive environment. Solutions on the market today can help you scale your fundraising efforts, so you can increase donations without increasing the workload.

Lityx understands the nuances of nonprofit marketing. Schedule a consultation to learn how you can partner with Lityx to help build a higher-performing fundraising strategy.