Most nonprofit leaders are used to running their organizations with lean staffs and funds — even in the best of times. But as federal funding cuts deepen and the economy shows signs of instability, many leaders are facing unprecedented financial uncertainty, even as the need for their services grows.
In unpredictable times, “data is often the answer,” says Lindsey Nadeau, vice president, philanthropy insight at UNICEF USA. When the economy is volatile, the number-one question leaders ask, she says, is how much their organization will raise and whether it will hit annual revenue goals. To answer these questions accurately, you have to invest in data quality, infrastructure, and analysis.
Strong data also enables leaders to make better decisions in a shifting landscape, she says. By looking at fundraising changes and trends in real time, they can adjust strategies as needed to stay on track to reach goals — instead of relying on their gut.
Plus, data ensures fundraisers can focus their limited time and resources on efforts they know will work, says Catherine Flaatten, associate vice president of prospect development at BWF, a fundraising consultancy.
“Now more than ever, we really can’t afford to be spinning our wheels on stuff that isn’t going to pan out [as]something beneficial for our organization and for the constituencies that our organizations serve.”
To help you make the case for an investment in data — and figure out how to focus when you get started — the Chronicle spoke with several experts, who shared key tips and steps to take. Here are their top recommendations.
Identify Your Needs
Start by asking questions you want to answer through your data, suggests Jacqueline La Gamma, senior director of prospect research and analytics at the Northwell Health Foundation.
You may find you can answer many on your own with a simple Excel analysis, she says, especially if you have a small database. That will help you pinpoint what data you need to improve. For example, if you’re seeking demographic data on your donors and find that addresses or emails have been entered inconsistently, you’ll know you need to work on those practices.
Fixing these kinds of issues doesn’t require a lot of money or expertise, La Gamma says. And by cleaning up your data, you’ll be laying the groundwork for bigger investments later, instead of buying a tool your organization isn’t ready to use.
Don’t feel pressure to invest in everything you need from the get-go, Flaatten says.
“It’s okay — and probably good — to start small.”
Begin by trying to get some quick wins with your data, building buy-in among staff and leaders, and learning key lessons before investing more.
Talk with your leaders to identify their top fundraising questions that data could help solve, she suggests. Then, create an analysis, dashboard, or report to answer them and point to concrete actions. That will help you stay focused on relevant data, which will make it easier to demonstrate its value as you look to do more.
Focus on Investments That Will Help You Grow
If you don’t already have one, a database should be your first investment, says Jennifer Filla, a prospect-research consultant.
Think about everything you need to do in fundraising and look for a database that can do those things, she says, but make sure it’s easy for your team to use.
“If it’s too hard for people to access, then you have to hire a trained professional to do that,” she says. “And if you don’t have the budget to hire a trained professional, then you shouldn’t have a database that requires one.”
It’s also smart to invest in a wealth-screening tool early on, La Gamma says, so you can understand the giving capacities of your donors and prospects and figure out how to prioritize and segment them.
These upfront efforts will enhance your fundraising overall.
“That’s something that leadership, I think, bites into as well,” she says. Your CEO will be more likely to meet with a donor if you can prove their ability to make a gift.
Some databases also have built-in wealth-screening features.
You should invest in making your direct-mail program data-driven, she says, because that’s how you build a pipeline of donors. You’ll want to create and send targeted lists, track mailings, and assess your results, which may require working with an outside vendor.
Invest in People, Not Just Technology
If you want to expand your data work, you’ll need to either bring in full-time staff with the appropriate skills or hire a qualified consultant, experts say.
“You can build a beautiful technology stack that can do all these amazing things, but if it’s untapped because you don’t have the right humans to leverage it, that’s a problem,” Nadeau says.
Hiring a consultant is a lower-risk option for those who want to start investing in data without a long-term commitment, she says. But you’ll need to spend time onboarding them to make sure they understand your organization’s data, and you should have a designated staffer available to move this work forward after the consultant leaves.
“Otherwise, you’re paying for something that you’re never going to put into use, and that’s not a good investment,” Nadeau says.
If you can afford it when starting a data program, it’s best to hire full-time staff or rework an existing role to focus on data, she says.
One initial low-cost strategy could be to hire a database analyst who can work on your policies and procedures, audit and improve the quality of your data, and train fundraisers.
Crucially, someone in a data-focused position needs to meet with leaders regularly to review the data, she says. Make sure the whole staff knows these meetings are happening, and how often, to convey the importance of data and foster a more data-driven organizational culture.
Make It Easy for Leaders to Say Yes
It can be helpful to pitch an investment in data as a pilot, experts say, especially amid economic uncertainty.
Pick one or two things to test first, rather than seeking too much change at once, Nadeau suggests.
“I think that feels less intimidating or overwhelming to leaders who are facing really tough decisions.”
UNICEF USA has taken this approach with its fundraising data shop, expanding the team gradually from five to 35 positions over the past five years. The organization not only hired new staff with data expertise but also ramped up the technical skills of existing employees.
“It was not like, boom, all of a sudden,” Nadeau says.
When making your case to leaders, think about what they might be afraid of losing and try to curb that fear, Flaatten says. Give them two or three options with different levels of risk and ROI, so that it’s not a “zero-sum game.”
As much as you can, make your leaders feel like this investment is their decision or idea, she says, rather than something they’re being pushed into.
If you sense any resistance or hesitation, try to understand what’s behind it, and let that guide how you craft your argument.
For example, a leader who simply doesn’t understand what you’re pitching requires a different approach than one who is scared of the changes data might bring about or of revealing their lack of expertise in this area.
To figure out where your leader is coming from, try to make them feel safe by being vulnerable, Flaatten suggests. Share a concern you have about data and ask if they can relate, so they don’t have to bring it up first.
Show the Impact of Data — and Focus on Growth
Flaatten likes to talk with leaders about how data can help them scale their work without adding employees they can’t afford.
“It’s like multiplying your staff without paying for those salaries and benefits,” she says.
Take prospect research as an example: One employee could assess 10 — maybe even 100 — potential donors individually and determine what to do with them, but no single person would have the bandwidth to do that for 100,000 prospects.
“Imagine if you were able to hire 1,000 more staff to sort through your database and … prospects,” Flaatten says. “Well, you don’t have to because you can invest in data tools that can do that for you.”
Focus on the outcomes of what you’re pitching, Nadeau suggests, not on technical terms or too many details about how it will work.
And be specific: Share the KPIs you’ll use to measure success.
When making the case for an AI portfolio-management tool to her leaders, for example, she led with fundraising benchmarks they hoped to hit with the tool, compared with results they would expect to see without it.
It’s also smart to tie data to one of the business goals in your organization’s strategic plan, Nadeau says. Your leaders and board members are already bought into that plan, so drawing the connection to data should help increase their support.
Finally, demonstrate the potential return on investment of data in a visual way, La Gamma suggests, because leaders tend to respond well to analysis.
“They love a pretty chart; they love when they can see something visually,” she says.
If you’re seeking a new tool, ask the vendor for an ROI assessment based on your data, she suggests. Many will provide that for free, and it will help you show the giving potential you could unlock in a way that is visual and tailored to your organization.
But go low when setting expectations, La Gamma says, “so that the wins are big.”
Keep in mind, a new data project typically needs to be in place at least a year before you can assess whether it worked, and you should factor in any limitations you’re facing, such as messy data.
Be upfront with leaders about potential challenges you foresee, she says, so they won’t come as surprises later.
No matter what you’re working on, expect to have setbacks — and that’s a good thing.
“That means that you’re taking a risk and that you’re doing something different and innovating,” La Gamma says. “I think there’s always failure with growth. If you’re not doing that in some capacity, then you’re not growing.”
