03/13/2020
How healthy is your data?
Are you a small nonprofit, doing amazing work in the field but struggling to find your footing when it comes to raising money? Let me guess that you have a junior development person on staff that helps write the grants and maybe does some of the data entry, but you can't afford to hire an experienced database manager -- and you're not sure how a database manager differs from data entry anyway?
If the above sounds familiar, read on to learn some best practices regarding maintaining your database and how poor practices may be harming your fundraising ability.
Marketing experts will tell you that acquiring a new customer is five times as expensive as retaining an existing customer. The success rate of selling to a customer you already have is around 60-70%, while the success rate of selling to a new customer is closer to 15% or less. The same holds true for donors — it is more expensive in terms of both staff time and money to acquire a new donor than it is to convince a current donor to make a second, third, or tenth gift. That is why having a robust database of donors that includes the full giving history of each donor along with various means of contact (email, phone number, mailing address, etc.) is critical.
This shouldn’t be too difficult - if someone sends over a check, it most likely will have a home address printed on it. You are possibly even using that address to send a thank-you note. But are you making sure that address (a) is in your database and (b) matches what is in your database? If not, you should.
If someone makes a donation online, you should, at the very least, capture their email address. Credit cards also require zip codes, if not the full street address, so again, this information is yours to be had, if you follow through and make sure it’s entered. (Some payment systems and data management tools will do this automatically if they are set up properly. And it is worth the time and money to make sure the sync-properties are set up properly.)
Another mistake I’ve seen is when nonprofits treat donations where the donor has requested anonymity as anonymous donations. It is a very rare case when the donation is truly anonymous; in my ten years in fundraising, I have only seen one case when a donation — made through a Community DAF (donor-advised fund) — that was truly anonymous. In most cases, the donor is known and should be logged under that donor’s name. Then make sure there is some sort of flag that indicates that this donor’s name should not be published in annual reports, on your website, etc.
Speaking of DAFs, I have also seen instances where donations made through DAFs — where the donor is known — where the gift is logged through the holder of the Fund instead of the donor that advised that gift. This too is a mistake. Why? Because in order to better steward your donors, you need to have a record of their giving. If the gift is listed as ‘donated’ by Schwab, or Fidelity, or the local community fund — the actual person behind the gift may very well be ignored.
Remember that good data-keeping will enable you to more fully track donations, compare giving from one year to the next, better steward donors (FYI: Cultivation comes before the gift; stewardship comes after); and improve annual fundraising results. Having an experienced database manager will help lead the way.
Intrigued? In PART TWO, I examine how a Database Manager differs from a data-entry associate, and why you may need to hire one.
Lorraine Goodman, Nonprofit professional
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