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Check-Up Clinic: Donor Data

Posted: 6/18/2020

Click here to read on the Chronicle of Philanthropy

5 Ways to Better Manage Your Donor Data

by Michael Theis

Disruptions from the coronavirus pandemic have upended nonprofits. Many organizations face significant financial challenges even as the need for their services skyrockets. In these challenging times, the ability to connect with donors and inspire them to give generously is more important than ever. But doing that well takes accurate donor data, experts say.

"If you don't know who your supporters are and how they're behaving, it makes it really difficult to fundraise," says Tyler Timko, senior consultant at EDEN+ Fundraising, a consulting firm in Iowa that helps community-based nonprofits with fundraising.

Charities should think of a properly maintained donor database as a prized asset, experts say, and prioritize database management accordingly.

"It should be the foundation for what drives a nonprofit," says Eric Wilson, president of Community Dataroots, a consulting firm focused on data management for nonprofits. "It's the basis for fundraising, developing campaigns, the segmentation of who they should reach out to, and the management of donor retention."

Whether your team is at the office or hunkering down at home because of the pandemic, here are a few simple steps you can take to improve your donor data and manage it well so you can boost your fundraising results over time.

Find Problems With Your Data

Database-management problems come in many forms, but one of the most common is simple: Fundraisers don't use the database to get information on supporters or to enter new data they collect. Instead, they often keep their own proprietary records. To encourage use of your database, Timko suggests assessing fundraiser activity based only on what's in the database. "You can say, 'OK, you're going to be evaluated only on what I'm able to pull from the database 24 hours before a meeting,'" says Timko. So, if the donors in that fundraiser's portfolio have missing or outdated information — or if there is no record of recent meetings or contact — that fundraiser would receive a poor assessment.

In other cases, fundraisers may enter their data regularly but in an inconsistent way. For example, they may use different terms to describe similar information. To prevent this pitfall, create a list of rules for data entry or restrict database fields to a limited list of terminology.

Small nonprofits have some of the biggest challenges when it comes to database management, experts say, including limited staff resources or a board that may not understand the need for a comprehensive data-collection effort.

"Especially in the small to midsize space, I don't even think they often have data, and if they do, it's not organized in a way that's useful or actionable," says Wilson. "That's a problem."

Develop Policies and Document Them

Take the time to revisit your organization's policies on data collection. Wilson suggests having fundraisers sign confidentiality agreements that outline appropriate use of the donors' data. There are serious legal consequences for failing to secure certain personally identifiable information common to financial transactions, such as charitable donations, so it's crucial to make sure fundraisers are safeguarding this data.

"That might seem a little onerous, but when we're dealing with donor information and donations, this is sensitive information," Wilson says. A confidentiality agreement doesn't have to be too lengthy, he adds, "but it's good to have in place."

You also should put your donor-data policies and database-management practices down on paper. Many smaller nonprofits fail to do this, says Erica Waasdorp, president of the consulting firm A Direct Solution. As a result, the body of knowledge related to the organization's database lies entirely with the person who manages it, which can lead to inconsistencies in record keeping over time as staff members come and go.

"I see that an awful lot," says Waasdorp.

Pull Together Information From All Your Sources and Give Each Donor a Unique ID

If you are building a donor database from scratch or seeking to fill in incomplete data, see what information you might already have on your supporters that could be incorporated into the database, experts say. These records can take many forms, such as financial records from past donations, mailing lists, or event sign-up sheets. From there, start with the basics: At the very least, you need names, "snail-mail" and email addresses, and phone numbers. While that may sound elemental, these bits of information can be used to generate a host of additional data about your donors. For instance, you could use addresses to determine which of your supporters live in high-net-worth neighborhoods, a possible indicator of their wealth.

It's important to assign each supporter an internal unique code or ID number in your database. The information donors and volunteers provide can change over time, such as addresses or last names. Unique IDs make it easy to track individual donors throughout their history of engaging with your organization. "That is incredibly important to how we store this information and connect different data sets together," says Wilson.

Create a Database Infrastructure That Gives You Flexibility

As a basic framework, Wilson suggests gathering information about your donors into separate datasets that feed into a master database. For example, the master dataset might contain a single entry for every unique donor ID, with fields for the most basic data such as names and contact information.

A separate, linked dataset would document the history of donor-fundraiser interactions, with a separate entry for every phone call and email sent to each individual donor, tagged by unique ID. A third dataset would track the history of donations from each donor, with a separate entry for each gift, also tagged to the donor's unique ID. Using these ID numbers, you can create filters to mash these data sets together to sort, filter, and analyze your donors' behavior in one place.

This structure makes it easier to cleanly cross-reference information about your donors that could help target or evaluate your outreach efforts. For instance, from the master donor dataset, you could create a filtered list of unique IDs for donors who live in Chicago with fields that include your outreach so you can tabulate the number of emails they've received in the past month.

Prioritize Training

There are many tools to manage databases, from specialized customer-relationship management (CRM) software, to more bare-bones database-management programs, and even spreadsheets, which many organizations use in lieu of a database. But most require some specialized skills to make them sing.

Especially if you're working remotely, now might be a good time to brush up on your skills with these tools — learn SQL (a programming language for managing data) or the ins and outs of how your CRM develops reports, for example. There are many resources out there for those who want to learn more about database management.

For instance, Towards Data Science , a subscriber-supported blog focused on data analysis and management, features regular articles with tips, tricks, and how-to guides useful to anyone who works with data. EdX, created by Harvard and MIT in 2012, also provides free university-level courses on database management.

This article has been corrected to use the term dataset in place of database when creating a flexible database structure.

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