Before renting an apartment or purchasing a car, you would first decide whether you can afford the purchase. For major everyday purchases like these, affordability is determined by comparing your income to the cost, and the same is true for nonprofit budgets.
Since nonprofits depend on charitable donations, their income may seem unpredictable. However, your nonprofit can use its data to predict the results of your future fundraisers. In this guide, we’ll explore three data management tips to help your nonprofit forecast fundraising revenue:
When you manage your data responsibly, you’ll be able to use it to power your purpose. Define your fundraising expectations with data so you can better allocate your resources to share your mission and raise money for your cause.
Expand your nonprofit’s database
To make the most of your nonprofit’s data, you must first establish a robust database. Knowing more about your donors and their likely contribution amounts can help you make predictions about your annual fundraising plan. You may already collect the basics, such as supporters’ names and contact information, but additional information on supporters’ giving habits can help you better forecast your fundraising.
For example, instead of simply recording donors’ cell phone numbers during a mobile giving campaign, you could make a list of supporters who contributed much more than usual. As a result, you might identify a demographic especially interested in text-to-give and appeal to them differently in your next fundraiser.
Another way to expand your knowledge of donor preferences, motivations, and giving habits is through prospect research. Collect information on potential donors by observing the following factors:
- History of involvement with your nonprofit. People who have given to, volunteered with, or supported your nonprofit in the past are likely already interested in your cause. Identify lapsed donors and try to determine why they stopped contributing.
- Previous donations to other organizations. Consider other organizations that your donors support. What campaigns are they active in? What causes do they give to? Their philanthropic involvement can reveal their giving motivations.
- Personal information. Go beyond donor basics and learn about their hobbies, interests, and pastimes.
- Wealth indicators. Identify individuals with the ability to give to your nonprofit by looking for indicators such as real estate ownership and business affiliations.
You can collect this data on multiple channels as your donors interact with your fundraising efforts. Your fundraising software, for example, will likely record this information automatically as supporters create donor profiles, input their payment information, and make a gift.
If your marketing team doesn’t have the time or resources to collect this data, Double the Donation’s guide to prospect research recommends consulting a prospect research company for help getting started. With the information your prospect research company provides, you’ll be able to visualize your donors’ giving potential and adjust your marketing strategies accordingly.
Identify revenue patterns
Prospect research coupled with data from previous fundraisers can help you identify giving patterns and establish a reasonable expectation for future fundraising results.
Consider the circumstances surrounding your previous fundraisers, such as virtual events or direct mail marketing campaigns. Then, identify patterns in donor behavior that impacted revenue, including:
- Timing of the gift: Which seasons do you earn the most donations during? What time of the month do most donors give? By understanding the timing of donors’ gifts, nonprofits can make conclusions about the timing of future fundraisers. For example, if a nonprofit sees increased donations at the end of the year and an upcoming fundraiser is planned for December, the organization can expect increased revenue.
- Fundraiser format: What types of campaigns are the most successful? Do more donors attend in-person or virtual events? Do most submit donations manually every month or opt for recurring gifts? Your nonprofit’s most popular fundraising initiatives may reveal donors’ giving preferences, which can help you plan future campaigns.
- Donor retention rate: What percentage of donors continue to give year after year? Your donor retention rate reveals how well your organization keeps donors coming back. Compare changes in your donor retention rate against your marketing techniques to determine which types of outreach keep donors coming back.
Your fundraising software is a great place to analyze revenue from past campaigns. Snowball’s guide to auction software suggests looking for software that manages check-out and extra donations. That way, your platform automatically collects payment details and tracks your event’s overall revenue. If your current solution doesn’t offer the features you need to track your revenue patterns, assess your software options to find one that will manage your fundraiser and track valuable results.
Analyze program results
Revenue patterns may reveal the success of your fundraising efforts, but program results will show what you did with that revenue and how you fulfilled your nonprofit’s purpose. For example, an effective charity auction website can help you raise more in your auction fundraiser. The way you use that fundraiser’s success reveals how beneficial it was to your nonprofit’s purpose, which can ultimately guide your future expectations for funds.
To get a comprehensive view of your future fundraising revenue, consider the broader picture by looking at other sources of data, such as:
- The number of measurable outputs. Determine what information from your nonprofit’s initiatives can be quantified and compare it across results from a number of years. For example, how many beneficiaries were helped? Greater program results may correlate with an increase in supporter trust and awareness of your organization.
- Amount of completed activities. What fundraising goals did your organization set out to accomplish and how did past campaigns achieve those goals? Were the goals realistic, or should they be adjusted for future efforts?
- Community partnerships. How did your nonprofit connect with the community through corporate support? What local companies or establishments backed your fundraising efforts and how could you increase this support?
When you analyze the ways you met your fundraising goals in the past, you can plan how you’ll fund your programs in the future. For example, if you know that your charity auction raised enough money to help 10 people in need, you’ll have a reasonable expectation for the potential of your next auction (especially when coupled with revenue patterns and an expansive database.)
The importance of data management can’t be understated, especially when it comes to setting goals for the future. To make the most of your nonprofit’s valuable data, invest in a data management tool that will organize your information for you.