Upgrading Your Nonprofit’s 2022 Data Strategy: What You Need

The new year is the perfect time to take stock of what’s worked for your organization and what needs to be improved. Plus, learning from your data has become more important than ever over the course of the pandemic as so many activities have shifted online. But if you’ve struggled to actively refine your tactics in a digital-first environment, reviewing and upgrading your data strategy should be at the forefront of your improvement plans.

After all, a robust data strategy comes with a few major benefits. When you can consistently generate valuable insights to guide your fundraising decisions, your nonprofit can enjoy:

• Higher returns on investment in future appeals and campaigns
• Deepened relationships with donors as you learn more about them
• Stronger data-driven cases for new investments or strategy changes

To make sustainable improvements to your data strategy, you’ll need the right tools and resources. Here are our recommendations:

Machine Learning Software

Artificial intelligence and machine learning are more than just buzzwords today. The right software can be an affordable and impactful addition to your data toolkit.

Machine learning tools analyze deep patterns in your nonprofit’s data to generate predictions about how individual donors are likely to behave in the future. As you generate more data through donor interactions over time, the model continually grows more accurate. This allows you to essentially replace the time-consuming and often inaccurate process of segmenting your donors for every new campaign—reducing work for your team plus giving you better-targeted lists of donors, resulting in increased overall ROI. 

Nonprofits are already using this technology to drive amazing results. In our guide to AI for nonprofits, we highlight a few prominent use cases:

• Improving direct mail conversions and response rates
• Boosting recurring giving program conversions
• Proactively predicting donor churn out of your giving program
• Strengthening mid-level donor stewardship and major gift fundraising strategies

But there are still a lot of misconceptions out there about what machine learning does and doesn’t do. AI does not blindly automate your fundraising activities and donor outreach. The human touch and your team’s judgment are still critically important. 

Machine learning software makes it easier to actually use your data for strategic decision-making. And with donor segmentation and list building drastically simplified, you have more time for building the human connections necessary for successful fundraising. 

You’ll just need a solid data foundation for the software to analyze. To build this foundation, check out the next three recommendations below.

A Central Database or CRM Platform

Your database or nonprofit CRM is the core of your data strategy—it receives, stores, organizes, and visualizes all of the data that your nonprofit generates through donor interactions. Generating analytic insights about your fundraising performance would be virtually impossible without a reliable database at the center of your strategy.

It’s a good idea to periodically review how your CRM is holding up: Ask questions like:

• Does your CRM satisfy your reporting needs?
• Is it costly to manage and maintain?
• Can all teams benefit from our data, or are views of it siloed to different departments?

Software integrations are another important part of what makes a CRM effective. Seamless data flows between platforms completely remove the need for manual data reporting. For instance, if your machine learning tools integrate with your CRM, you’ll get fresh donor predictions updated in real time. (But even if integrations aren’t readily available, intuitive data reporting and exporting functions can get the job done.)

Although choosing a new CRM can be a major investment, remember that no other parts of your toolkit occupy such a central and important role or touch so many other parts of your operations. If your database isn’t performing well or creates more headaches than solutions, it’s holding you back and should be considered for replacement in 2022 or beyond. 

Well-Defined Metrics and Objectives

You’ll track a wide variety of data points as your organization interacts with donors, hopefully resulting in a packed database full of valuable insights. But looking at all of that data at once is less than helpful when you’re trying to plan a new campaign or marketing push. It can easily get overwhelming and counterproductive if you have tons of data but no clear sense of what you’re looking for. 

You need a well-articulated vision for how you want to actually use your data. This means being able to define your objectives and the key metrics you need whenever you head to your CRM to retrieve information. Consider these tips:

• Familiarize your team with the fundraising metrics they’ll need to understand and find in the CRM. This includes anyone who may need to access the CRM, not just a siloed group of development or fundraising staff.

• If something is especially important for your nonprofit, track it! Too many nonprofits invest in database software but then neglect to actually customize the specific metrics that it collects and the reports it generates. For instance, you could look for ways to automatically track your donor retention rate or thank you responses your CRM.

• Alternately, if you’re collecting metrics that you never use and are unlikely to need in the future, cut them. Having too much unnecessary data can slow down your CRM and your team.

The main idea here is that when your staff accesses your database, they’ll need to understand what they’re looking for and why. This ensures fuller adoption and effective long-term use of your CRM, which will contribute to the overall value of your data strategies over time.

Data Hygiene Protocols

Finally, keeping your database clean and organized is another important way to make sure your entire data strategy stays focused and effective over time. A few standard data hygiene rules include:

• Regularly screening for and removing duplicate, outdated, and irrelevant data
• Standardizing your data entry rules, like how you format dates and names
• Providing your team with training and cheat sheet resources to help them stay on top of data hygiene

There are many ways to clean your database and keep it organized over time, but remember that the overarching purpose is to help keep your data truly useful and valuable. 

After all, if you’ve gone through the work of building a robust data toolkit and strategy—investing in machine learning tools, upgrading and integrating your CRM, defining your key metrics, etc.—easily avoidable data hygiene issues should be the very last thing that holds you back!

An improved approach to how you generate, store, analyze, and then use your nonprofit’s data can be a game-changer for 2022. But you have to start by carefully reviewing what has and hasn’t worked so far. The four recommendations outlined in this list are the key strategic tools and best practices that savvy nonprofits will rely on more than ever going forward. Best of luck!

By Tim Paris, CEO and Co-Founder, Dataro