It’s challenging to navigate the philanthropic landscape amid a global pandemic. With roughly 4 billion people under some sort of order to stay in their homes and nearly 2 million confirmed cases of COVID-19, there is an ever-growing number of issues competing for donors’ attention.
In previous economic downturns, donors have often concentrated their charitable contributions on causes related to near-term societal needs such as food, housing and health care. That has forced nonprofits to develop messages that address how their mission continues to serve and address current needs.
That’s where philanthropic analytics comes in.
Philanthropic analytics brings a data-driven approach to fundraising by helping nonprofit organizations. The approach can maximize a development shop’s resources by leveraging data to remove the guesswork from areas such as prospect management, staffing structures and donor communications.
Despite the potential benefits to philanthropic analytics, most nonprofit organizations aren’t effectively leveraging their data. For example, only 17% of respondents to Grenzebach Glier and Associates’ March 2020 “Nonprofit organizations’ use of analytics survey” capture return on investment metrics on analytics and 67% capture ROI metrics on fundraising.
While most organizations are leveraging tools such as wealth screening (84% outsource the functionality), affinity modeling (internal) (57% handle in-house) and visualization (50% handle in-house), a significant share of organizations have plans to invest in philanthropic analytics tools and technology in the coming years. For example, 19% have wealth screening on their road map, 14% have data hygiene and 14% have visualization.
To make sense of survey results and to examine the current state of philanthropic analytics—and where the field is going—we spoke with Richard Geiger, senior vice president, philanthropic analytics, at Grenzebach Glier and Associates.
Q: Where does philanthropic analytics currently fit within most nonprofit organizations’ organizational structure?
RG: It depends on the organization. For some organizations, it fits within back office operations. In others, it fits in finance because that’s the area of the organization that keeps tracks of numbers.
In other organizations, a chief strategy officer (CSO) might oversee it or it may fall under the strategic planning function that sits under the CEO, absent a CSO. Typically, those executives use analytics to examine the efficacy of their organization in delivering mission, as well as understanding what kinds of constituents are supporting that mission through philanthropy, advocacy, and other activities.
Q: Based on market-leading institutions, where should analytics fit within most nonprofit organizations’ organizational structures?
RG: Again, it varies based on the specific organization. For the work we do at GG+A and the fundraising world, analytics typically fits well somewhere in fundraising/development/advancement in an advancement services or operations shop. But for some organizations, it has branched out into its own specialization rather than sitting within another area, such as database management. Analytics or business intelligence becomes the umbrella that manages areas that include data, reporting, prospect management, and prospect research. The focus shifts from having data to having data that becomes actionable and consumed into strategy development and deployment.
The very best organizations have a 360-degree view of their constituents. These organizations engage in analytics to help leadership maximize relationships and lifetime value across channels and mission engagement.
Having a specialized area dedicated to analytics ensures that the organization isn’t pushed aside by the various other tasks that eat up our days. That ensures that they have the bandwidth to monitor and identify leading and lagging indicators, which can give them a forward-looking, rather than backward-looking approach. Rather than examine how many prospects engaged in an activity or how many dollars they gave, they can shift tactics and look at leading indicators such as the correlation between dollar value in pipeline by stage and the percentage of gifts that closed to get a sense of what is likely to happen in the future.
Q: What’s holding institutions back from implementing changes that will more effectively leverage analytics?
RG: It all comes down to resources that are in limited supply—money, time and talent. Many major gift officers or fundraisers talk about major gift fundraising as an art rather than a science. But data can help fundraisers reach their goals. For example, if an organization uses data to qualify every prospect before a gift officer makes a visit or ask, that officer will have a significantly higher chance of meeting his or her objective when he or she meets with the prospect.
Q: How can organizations just starting out in analytics overcome their initial challenges?
RG: Every organization needs to start by figuring out what it wants to measure. What are the things within its fundraising programs that have metrics and are measurable? Then, based on those that need metrics, the organization can look at those metrics to determine its progress and its definition of how to gauge success.
Then it can start examining those metrics and coming up with a plan on how to engage in what it is measuring, how it is going to measure it, and how it will be consumed. For example, if the metric is participation rate, it can begin examining what feeds into a jump in that number. Is it phone-a-thon, a mailer, or something else?
Q: How might an organization benefit from implementing an analytics program during the current climate?
RG: It’s even more important within a challenging environment to find ways to demonstrate that strategy and tactics are delivering a clear return on investment. A clear path to ROI is key when resources are limited.
While it can be hard to defer to data when organizations are not used to that approach, the current disruption in institutions’ normal operations may make this the right time to push ahead in this direction. As they examine how to move ahead, organizations should embrace and lean into the challenge of balancing the art and science of fundraising.