Step 1: Determining your needs for fundraising decision-making

May 1, 2017

“As businesses embrace data-driven decision making, it’s no longer enough to simply collect the data.  In fact, there is so much data, that instead of enabling decision making, it can sometimes do the opposite…Gone are the days when there wasn’t data available to inform decision makers. Instead, organizations now have a flood of data residing in multiple systems, in global locations, locked away in spreadsheets or in people’s heads.”

Ott, Kevin, “Flooded with Data. Striving for Data-driven Decisions.”, September 18, 2016,

http://blogs.cisco.com/analytics-automation/flooded-with-data-striving-for-data-driven-decisions

Data.  A small word that, imho, has caused iceberg-sized headaches to each of us at some point in our fundraising careers.  Some of us are still suffering with it (or because of it).

But data, itself, is only a raw material, a lump of clay waiting to be moulded into something useful or beautiful (or, in some cases, a hideous pencil holder – still useful but less esthetically pleasing).

Transforming your data into something useful starts with figuring out what useful thing you need in the first place.  In today’s blog, the “useful thing” that we’d like to create is the ability to make data-driven fundraising decisions.  It starts with defining your information needs (user requirements) way before any data becomes part of the conversation.  Once you’ve defined your needs your IT department is more than capable of determining how to transform and twist data to satisfy them (and, in my experience, individuals in IT find solutions to everything if we guide instead of dictate).

Why defining your requirements is a good thing
  1. Because data structures, data sources, data rules, data transformation…all of these are influenced by the functions / decisions users need to execute. Otherwise, it’s just lumps of useless clay. 
  2. Because some of your informational needs won’t be able to be met with currently available data, systems and/or staff. You need to identify these quickly and determine the importance of the information, alternate solutions, costs associated with alternate solutions, and whether they are justified in meeting those needs. 
  3. Because defining the types of decisions you need to make and their frequency will influence information delivery mechanisms and processing requirements. In lay terms:  how quickly and how often you need information for your decisions may mean the difference between getting multiple / faster servers to process data at greater speeds or supplying static weekly pdf reports. 
  4. Because it makes everyone’s life easier. 
What you should consider including in your requirements

When defining informational requirements for decision-making, you should be able to state the following:

  • The fundraising department’s objectives, in terms of data-driven fundraising
  • For each requirement:
    • Description
    • The objective it’s linked to
    • Primary purpose (monitor, evaluate, compare…)
    • Decision to be made
    • Needed information
    • Frequency of production
    • Calculations, if required
    • Detail level (by donor, by campaign, by month, etc.)
    • Historical depth (YTD, current year, current month, lifetime, quarter, today, etc…)
Who should be involved in user requirements?

To define requirements:

  • End-users (typically fundraising / operational staff): they are involved in the development, implementation and monitoring of fundraising activities so are crucial in defining the needs of the department from an operational level;
  • Director of Fundraising: they make many of the decisions regarding donor and campaign strategy and have performance and analytic requirements to contribute
  • Director of Operations: their input is centered around operational efficiencies and how to streamline processes for better internal workings and donor-facing processes

To implement requirements

  • IT: their understanding of the granularity and quality of available data, their knowledge of system abilities (and limitations) and of their grasp of the current state of the infrastructure that support organizational activities puts them in the optimal position to determine how to meet user requirements
  • Finance: for those requirements that require external solutions
Types of Decisions and their Required Data

This blog wouldn’t be complete without providing my own experience with data-driven fundraising decisions and the data that support them.

No matter how important we believe strategy, donor engagement, acquisition, retention and monthly conversion to be, what it all amounts to is this:  what revenues are being raised, and at what cost?

Revenue decisions

This is the side that most of us fundraisers spend the majority of our time in. Here we need to make decisions about campaigns:  targeting, messaging, ask amounts, channels.

We need information about past campaigns, donor segment performance, channel performance, response rates, average gift and the results of past tests.  We also need information pertaining to the setting of goals (donor and financial) for each fundraising activity.

Cost (Financial) decisions

This side sets the financial and donor goals of the year, allocates budgets to reach these goals, and monitors the ROI of fundraising activities. Here, we need information such as: comparative YOY monthly/weekly cash flow (Current vs Previous years), actual vs budgeted campaign results (revenues, gifts), YTD totals, costs and ROI, to name a few.

The data at the foundation of revenue and cost decisions are:

  • “Donor”: The minimal data you need is basic donor contact info.  First and Last Name, Salutation, Address, email. Phone number and cell number….the basics, right?  I have yet to come across a NFP that did not have this information (though the quality and “freshness” of the data were sometimes doubtful).
  • “Response”: Feedback from donors about what, where, when and how they respond to our conversation. This data has 2 levels:
    • Gift responses (donations) are always captured as NFPs have legal obligations to do so. How gifts are tagged (channel, campaign, type, payment method…) varies from one NFP to another.
    • Non-gift responses (surveys, subscriptions, memberships, etc)
  • “Contact”: Every time we communicate with donors, we start (or continue) a conversation.  If we are able to track the history of these touch-points (what types of campaigns and communications donors received, when they received them, channel, etc) then we are better able to understand (and influence) the current state of our relationship with each donor.  This information, along with “Response”, allows us to calculate response rates to activities.
  • “Budget”: The amount that is available for covering the costs of the fundraising program.  This amount is usually divided my time (monthly, quarterly, yearly) and/or by fundraising activity (by DM campaign, by online campaign, events, educational programs, etc.)

Armed with your requirements (and my suggestions above) you are already through half the battle to becoming data-informed.

“Having the right data and metrics is essential to growth and success.  Otherwise, we are back to talking about true but useless statistics that do not move the needle.”

MacLaughlin, Steve, “Data Driven Nonprofits”, Aug 3, 2016

https://www.amazon.ca/gp/product/0988850710/ref=ox_sc_act_title_1?smid=A3DWYIK6Y9EEQB&psc=1