Data Drives Strategy: Rainmaker Podcast

I was thrilled to sit down with my friend Andrew Olsen to talk about data-driven strategy for “The Rainmaker Fundraising Podcast,” which was published today.

We recorded this in February, and then the pandemic happened, and honestly, data didn’t really seem important in the midst of everything that nonprofits were facing.

Yet those organizations that have their data in order have done the best in the past 9 months, in reaching out to those who want to hear from them and ask for their help, in telling others what their needs are and how they can get involved so the organizations can fulfill their missions.

I’ve had the opportunity to help a client in the past few months to get their database in order, creating clear definitions of active donors, build a lapsed donor strategy and launch new fundraising initiatives for them. I’m excited for their future fundraising success built on a data-driven strategy.

In order to have a data-driven strategy, you have to understand the data. One of the reasons why I love talking to Andrew is because he and I have similar “battle stories” of working with data, we geek out together about data and fundraising. I think he and I could exchange stories for hours.

Take a listen to learn about the “peggy rule,” how arbitrary suppression rules cost nonprofits money, and some of the quick tactics nonprofits can do to prevent these kinds of issues.

This Is Awkward, but Your Data is Leaking

I get it. You’re a small nonprofit. Your budget is stretched to lengths you never knew you could manage. It’s hard to find and pay talented people enough to stick around. To raise money you need to hire people for fundraising, communications, event planning and execution. Paying someone to run your database? You’ll just have to figure it out, there’s no money for that.

And yet…what do your fundraising, communications and event planning people rely on to do their jobs most effectively?

Your database.

In my work with nonprofits of many sizes over the years, I have seen data leaking from the most unexpected areas. It takes a person who knows and works with data to ask the questions that need to be asked to ensure that your organization is using your most important tool most effectively.

Here are some situations I’ve encountered this past year alone:

  1. The organization that didn’t put event attendees in their database unless the attendees also donated, because they didn’t want to pay a higher price to store “non-donors” in their database.
  2. The organization that allowed the website team to capture email sign-ups without looping those people into fundraising messaging, just mission-related content.
  3. The donor team that did not share email addresses of donors with the communications person because they didn’t think about the fact that it’s important for the organization to communicate with their current donors.

Nonprofits are often juggling a variety of tools to accomplish goals — for small nonprofits, the number of tools is infinitely more complicated. They don’t have the budget to purchase an all-encompassing product that acts as donor database, email service provider and website host, where all tools talk to each other and data flows seamlessly between them. So they use an email service provider that works with their website, but not with their donor database. Or their website sends donations directly to their donor database, but doesn’t share the contact information with the email service provider.

When these things happen, donors make gifts but never get emails from the organization. Or the organization sends emails but never asks for donations to support the mission work nonprofits write about so passionately.

In the past several weeks I’ve asked the right questions and finally told a client that they were leaking data everywhere.

When you leak data, you leak dollars.

Going back to fundraising basics, there are three critical elements to a successful fundraising ask:

  1. The Audience
  2. The Offer
  3. The Creative

Or rather, to emphasize in order of importance…

These things happen at no fault of the people in their chairs. The communications person is communicating. The fundraising person is fundraising. The event person is executing successful events. But how much better could each of these people do at their jobs if someone else was helping them make sure they had the right audience?

Ask yourself if data is flowing in all ways, and keep the most important people in your organization in the center of these discussions: your donors.

Failing to Succeed

The road to success is paved with failure.

— Rashida Rowe

I thought of this quote the other day as I sat at my client’s place of business, trying to figure out how to undo a mistake I had made in their database.

It wasn’t a massive mistake, it was a relatively small one. I am working with this client to assist in their fundraising efforts at the critical year-end giving timeframe while their organization is going through staffing changes and transitions. I had made a record-keeping error, uploading hundreds of recent gifts to their prior year’s campaign, not the current year’s. There was no one to ask about how to fix this as all of the database knowledge had walked out the door with their previous employee.

A couple of things I’ve learned about the mistakes I’ve made in my career:

  1. Most mistakes can be fixed. The first step is to admit that you made a mistake so you can start working on a solution. Thankfully I’m not a brain surgeon so my mistakes don’t result in someone dying. That perspective is also helpful and keeps a person from panicking.
  2. Walk away for a while to think things through. There’s a reason why some of the best ideas come when people aren’t looking for them. I took the opportunity to step away, get some food (it was around lunch time anyways), change my scenery for a while. The solution came to me while I was driving back to the office.
  3. Trust yourself. Tell yourself “I am capable of solving things.” I know this about myself because — don’t act surprised — I’ve made mistakes before and fixed them. Or, I had someone show me how to fix messes I’ve made and now I know how NOT to make those particular mistakes again.

After getting some food and fresh air I returned to the task of fixing the error and dabbled in this new-to-me database. Thankfully I have a host of screw-ups I’ve done in other databases in my past that I could rely on for experience. Within 30 minutes I had crafted a solution, tested it out and voila! Fixed. And now I know how to query data and run mass updates in another software system. Imagine that, new knowledge that I got from making and fixing a mistake! That’s success right there.

Destruction by Database

My very first job out of college was at an agency that called itself a “database marketing” firm. They didn’t market databases; they used data to make informed marketing decisions. I had the glamorous job of working in the Response Center, answering inbound telemarketing calls and entering direct mail leads generated by the smart marketing that had been executed for their clients.

I never got far from data the rest of my career. From analyzing client direct response results to understanding how a nonprofit was capturing data so I could later request it, using data has always been a part of my job. I’ve seen data managed with kid gloves, every piece of information carefully captured, updated and reported as it comes in. I’ve also seen great measures of data be shredded rather than entered into the database, thousands of potential relationships rolled out the door in a bin after years of lingering in a drawer.

From all of this, I have one piece of advice for nonprofits, and you can quote me on this:

Invest in your database.

— Jenny Floria

Pretend you just bought a new car. Congratulations! You have a car! It runs smoothly, it’s quiet, it is awesome. But you don’t change the oil, put air in the tires, or do anything to maintain the car. It gets louder and louder over time, the ride gets bumpier and, well, in no time at all you’ve got a clunker on your hands.

The same thing happens when you don’t regularly invest in your database. Here are some of the ways in which I’ve seen nonprofits pay in the long run for not investing in their databases.

Nonprofit A purchases a highly-recommended and relatively expensive database. The person put in charge of the database often ignores the upgrades the software company recommends installing, figuring the updates aren’t worth the time or money. Before they know it 10 years have passed and the database doesn’t capture more than two phone numbers per household (because who’s got more numbers besides “work” and “home?”). They re-invest in a new database and move the data, losing much of it in the conversion as the fields were not properly mapped since the old database was so antiquated.

Nonprofit B uses a free database. This meets their needs for the first few years when they’ve only got a couple of hundred donors. They grow quickly and need to raise big money for their expansion. They realize they don’t have current addresses on many of their founding donors, they have phone numbers captured in one of four different fields and can’t do any wealth screening because their data can’t be matched due to its inconsistencies. They have to pause their campaign to make an investment in a database, something they should have done earlier.

Outside of the initial purchase and licensing expenses, how should nonprofits be investing in their databases?

  • Put the right people in charge of the database. Give the job to a professional who knows the ins and outs of databases and what is needed to keep them running effectively.
  • Treat the data like your nonprofit depends on it…because it does. No matter how insignificant it may seem, every piece of information could be a treasure. Evaluate every source and make sure your database has the ability to capture it, even if you choose not to.
  • Update update update. Unless the initial purchase decision was completely disastrous, it is nearly always more effective to continue working with your current database than move to a new one. Budgets have been blown, deadlines extended, good employees resigned, and potential revenue left on the table in the midst of database conversions.
  • Train people on how to use the database. This includes training your database manager, who should stay up-to-date on the latest developments. When updates occur, make sure users are aware and know how to use the new features.
  • Have consistent data capture. Where data is stored and how it is used should not change every time a staff member walks in the door. Have written documentation of when, where and how data is captured so that it continues to flow regardless of who is working at the nonprofit.

Data is at the heart of your business. You want your major gift officers to reach donors at the right phone number, your appeals to reach people at their current address, and to understand the relationship between donors and your organization. Make these investments in your database for your team to succeed.