Donor Analytics Guide: What Nonprofits Need to Know

According to M+R Benchmarks, the average one-year donor retention rate for 2023 was 44%. Additionally, the average new donor retention rate was 23%, proving just how difficult it is to engage donors enough for them to continue contributing year after year.

Reaching out with generic fundraising asks or last year’s marketing materials won’t cut it. Retaining donors requires personalized, relevant experiences that speak to your supporters and their needs.

While collecting and implementing donor data is the solution to creating more tailored opportunities and communications, this data is only as strong as how you interpret it. With analytics, you can transform donor data points into actionable insights that boost your retention rate. In this guide, we’ll explore the basics of donor analytics and how you can incorporate them into your strategy.

What are donor analytics?

Donor analytics involves transforming data into insights on donor behavior, preferences, and trends. Nonprofits use tools like predictive modeling, artificial intelligence (AI), and machine learning to identify patterns in donor data and infer how supporters may respond to different opportunities.

For example, let’s say you want to pinpoint potential major donors. With the help of a predictive AI model, you could combine giving capacity, giving history, and engagement data to determine who your most promising prospects are. 

Once you identify these donors, you can use machine learning to qualify them, making more specific predictions like when donors will give and in what amounts. Equipped with these donor analytics, you can focus your outreach on top major gift candidates and tailor your fundraising asks accordingly.

What are the benefits of donor analytics?

When you leverage the power of donor analytics, your nonprofit will experience numerous benefits. These include:

• A deeper understanding of your donors: Analyzing donor data enables you to learn more about who your supporters are and how they want to interact with your nonprofit. You may find that 80% of your donors live in your local area or that only half of your newsletter subscribers follow your social media accounts, allowing you to make decisions with this information in mind.‍
• More personalized communications: With a better understanding of your supporters, you can create highly tailored, data-driven marketing campaigns that resonate with them. When donor analytics and fundraising are combined with AI, you can generate hyper-personalized communications that align with your donor’s interests and are written in your writing style, saving you time and enhancing the quality of your communications.
• Improved fundraising asks: Taking a closer look at metrics like giving history, giving capacity, and likelihood to contribute helps you develop stronger fundraising asks that donors are more likely to respond to. Using AI predictive analytics, you can better understand their capacity and willingness to give and estimate the best ask amount.
• Higher return on investment (ROI): By making data-driven decisions based on donor analytics, you’ll generate a higher ROI from your marketing and fundraising efforts. Additionally, focusing only on those most likely to convert preserves resources, allowing you to boost your ROI even further.‍
• Stronger donor relationships: Leveraging donor analytics doesn’t only benefit your organization. Connecting donors with relevant opportunities gives them a more positive, enriching experience with your nonprofit. In turn, you’ll develop stronger, more longer-lasting relationships with them and retain their support over time.

Making the most of donor analytics offers a win-win situation for donors and your nonprofit. While donors appreciate your effort to speak to their personal wants and needs, your organization benefits from the resulting engagement and donation revenue.

How can nonprofits leverage donor analytics effectively?

Although donor analytics naturally provide several benefits to your organization, there are steps you can take to maximize their effectiveness. Finetune your donor analytics strategy using these tips:‍

Determine your goals

‍Your goals will help you decide which data points to focus on and which tools you need to accomplish them. For example, you may leverage data about donors’ preferred communication channels and donation history to create more personalized donor stewardship plans. On the other hand, if you’re trying to identify potential planned givers, you may focus on giving capacity and level of commitment to your organization.

Clean your database

‍Once you’ve isolated the data you’ll need, clean up that information to ensure it’s accurate and useful. This data hygiene process involves resolving duplicate, outdated, inaccurate, and incomplete entries. You may also append missing or incomplete data to round out your database and gather any additional information you need to analyze.

Segment your supporters

‍As Deep Sync’s first-party data guide explains, “With well-defined segments, you can tailor outreach to specific groups within your target audience and deliver content that resonates with their unique interests, preferences, and behaviors.” Segmenting your supporters allows you to analyze different groups individually to gain insights about how to best engage with them.

Use the right tools

‍Look for an analytics and AI platforms that are known for working with nonprofits. That way, your provider will understand your goals and help you get the most out of your donor analytics. Make sure the tool you select is equipped to generate the insights you’re looking for—whether descriptive, predictive, or something else entirely.

If you'd like to explore AI, but you're not sure where to start, try Momentum's free ChatGPT designed for major gift fundraisers. It's been trained on the latest fundraising best practices and can help you research and ideate the best ways to engage your major donors and maximize your impact.

Evaluate your approach

‍Once you’ve implemented your donor analytics insights, use data to determine what went well and adjust your approach as needed. For instance, if you’re using donor analytics to upgrade your fundraising strategy, Aly Sterling Philanthropy recommends examining data for your nonprofit strategic planning like donor retention and conversion rates and comparing them to your previous campaign results to evaluate how much your data-driven approach has improved donor engagement.

To further measure your success, consider surveying your supporters about their experience with your optimized campaign. Ask donors if your communications resonated with them and if there’s anything else you can do to offer more relevant opportunities.

Make data-informed decisions with donor analytics

Data leads to stronger decisions, but fully analyzing and interpreting that data leads to even stronger ones. Tap into the power of donor analytics to upgrade your marketing and fundraising strategies and build a lasting community of dedicated supporters.

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This article was written by Gabrielle Perham, the Director of Marketing for Deep Sync. She joined the organization in 2017 and brings more than 20 years of experience in strategic marketing, branding, communications, and sales enablement.