Why Data-Driven Donor Comms Is the Ace in the Fundraising Pack

By Jo Scott, Client Development Director at Go Inspire

Charities have reached a crunch point as the cost-of-living crisis continues to bite. You might have noticed a soaring need for your organisation’s services at the same time as many of your supporters are struggling to donate as much as they’d like.

The problems are laid bare in the Charities Aid Foundation’s Charity Resilience Index, a survey of more than 650 third-sector organisation which indicates 40% of charities are dipping into financial reserves to meet demand. Add in rising insolvencies and it seems a bleak start to 2024.

In these circumstances it might be tempting to think the best thing you can do as a fundraiser is to cross your fingers and hope for a rapid upturn in the economy to increase donations. But your charity can still make gains by boosting campaign efficiency and ROI – thanks to the power of data-driven supporter strategies.

Retail and charity data strategies’ common cause

It could be that you’re already convinced of the need to strap rocket boosters to your data strategy, but your organisation’s senior team see it as a time- and budget-consuming distraction.

Perhaps the easiest way to deal with uncertainty surrounding the value of data strategy is to consider its effect on the retail industry. Tesco Clubcard and Sainsbury’s Nectar have added huge value for both their business and their customers. Other grocers, from Waitrose to Lidl, have followed suit with their own data-driven loyalty programmes – and they’re not alone, with retailers from Robert Dyas to Costa also betting big on data.

Why the comparison? Well, retailers’ needs mirror those of fundraisers – and there are plenty of successful strategies charities can adopt:

  • Retailers want a higher spend per customers; your charity wants to increase donation per supporter – in both cases the answer is data-driven, personalised communications that highlight retailers’ products and charities’ services
  • In retail, companies want to retain customers; your organisation needs to keep their supporters – building a retention model and using the correct CRM strategy is a key approach for both sectors
  • Retailers also need new customers and, likewise, your charity aims to acquire new donors – understanding your existing base then engaging lookalikes is a successful strategy in each sector

Transferring expertise from outside the charity sector, particularly based on experiences from industries with similar ‘data missions’, can prove fruitful. While it’s impossible to put a value on the overall financial gains made by UK retailers through data strategy, consider why charities may want to take a closer look: Boots chief marketing officer Pete Markey has stated that when it increased use of first-party customer data in campaigns, from 7% to 40%, it achieved incremental £2 revenue against every £1 spent.

So, what can data-driven fundraising do for your organisation, and how should you go about it?

Better data for your charity and for your donors

There are numerous rewards your charity can reap by optimising data strategy.

Depending on the size of your organisation you may have a dedicated insight team in place – or there might only be a single data manager supporting the fundraising department. In either case, filtering out fruitless requests of data analysis in favour of insights than can make a difference, and fast, optimises resource for the best results.

Then, by conducting a full audit of your data capabilities, you will identify which aspects need to be overhauled – for example, replacing or upgrading legacy CRM systems that will never form the foundation of a successful data strategy. New systems take time and often budget to implement but offer clear benefits, from efficiency to campaign effectiveness.

Having a 360-degree view of data will also help you to turn the spotlight on how it’s structured at your organisation. Supporter information can be held in disparate databases relating to different products, from individual giving to legacy pledges. Having a supporter-centric approach instead, created with unified data in a single customer view, allows charities to pinpoint loyal and valuable individuals, and improve communications with them.

It’s a far more agile strategy meaning you can react to triggers and target donors with specific messages: for example when they hit a milestone birthday or other personal event; or when circumstances – such as a natural disaster – prompt emergency appeals similar to those they’ve responded to before. The more the individual feels valued and an important part of your cause, the likelier they are to donate.

How data can optimise print fundraising campaigns

Spending on blanket fundraising campaigns that target many groups of donors with a single ask can take the focus off more efficient ways to allocate budget. Using a data-driven segmentation approach will enable you to request help from the right supporters at the right time. This reduces communications volumes and keeps down costs.

Printed communications powerfully provoke a response from donors whether used as a single campaign channel, or in combination with other media. According to a Marketreach study more than one third (35%) of donors prefer to respond to direct mail rather than giving online. But the research also notes that campaigns which combine digital and print deliver 25% higher response rates than standalone digital campaigns.

In addition, printed communications provide a strong example of how data can support channel strategy, donor acquisition and retention. Charities collectively plan and send huge volumes of direct mail and door-drops to supporters, and the process can often feel scattergun, with disappointing returns.

Some of the ways data can be pressed into action to optimise print campaigns include:

  • Hygiene – ensuring you only mail clean data, reducing both waste and cost
  • Planning – audience creation, mapping donor journeys and predicting response
  • Personalisation – understand your supporters inside-out to tailor meaningful communications and build relationships
  • Multichannel – provide insights into how print formats can be combined with digital channels for maximum supporter engagement, based on preference and response data
  • Cross-sell – identifying opportunities to sign up existing donors to support your cause in other ways e.g. persuading raffle players to try your lottery

Data is also increasingly being used to fuel ‘sole supplier’ arrangements. This is where one partner manages all aspects of print requirements in one place; saving charities time, money and the headache of managing several print providers.

Setting out on your data-driven fundraising journey

That’s just a snapshot of the difference a solid foundation of data can make for your charity. If it seems like becoming a data-driven fundraising organisation is a Herculean task, it’s important to realise that much of what you need is probably already in place. And even if it isn’t, a strategic approach will identify and fill in the gaps.

When fundraisers ask us to support with data strategy we do this in five distinct stages:

  1. Understand objectives for the organisation as a whole as well as specific areas of fundraising
  2. Build a roadmap for a dedicated project team to follow that ensures the charity can achieve these goals
  3. Consider how to answer the questions set out in the roadmap – including calling on learnings from other sectors such as retail – and metrics to monitor progress
  4. Audit data across the organisation; assessing supporter personas; and considering a single view and external sources, such as Acorn and Mosaic
  5. Devise a data insight project, broken into bespoke stages e.g. propensity, acquisition, retention, reactivation models; conduct trend analysis and devise your ask strategy, including communication channels

As a final thought, fundraising data strategy is never done and dusted. Charities need a continuous feedback loop, a test-and-learn approach to campaigns and products that accrue vital donor data, other metrics and insights, and feed them back into operations to provider incremental gains.

Ongoing supporter communications are a chance to keep your data strategy from stagnating. Consider actively collecting information on donors’ desires and demands of your organisation. This could be as simple as including a feedback mechanism on existing campaigns, or launching a new standalone survey.

Harnessing data strategy in fundraising is a key way for charities to navigate the prolonged financial pinch. A more efficient approach to campaign strategy, a better experience for supporters – and a bigger opportunity to provide the crucial services that many people so desperately need.