Welcome back to Ask a Responsive Fundraiser. This week, weโre excited to show off our spiffy new branding and even more excited to welcome T. Clay Buck to the column! This week, weโre tackling data management. Clay has covered everything from building a data governance strategy to digging into donor data.
Be sure to check out past editions of Ask a Responsive Fundraiser and leave us a comment on LinkedIn so we can answer your questions!
Dear Responsive Fundraiser: As our nonprofit grows, so does our amount of data. What are some of the best practices for creating a data governance plan or strategy?
โ Desperately Seeking Strategy
Dear Seeking: This is one of the most important questions any nonprofit should ask itself right now. It applies to both growing organizations starting to collect more data and those already having a lot of data on hand.
For this discussion, Iโm referring to fundraising and communications data, but these principles should apply to all information an organization collects, from donors to volunteers to program recipients and beneficiaries.
We must acknowledge that data is an organization’s most valuable asset, especially in this economy. Nonprofits are absolutely not immune to hackers’ targeting and data security and privacy invasions. We now have many examples of nonprofits, both large and small, having been subject to data breaches and ransomware attacks, which affect our ability to fundraise, communicate, and provide services.
So, while there are very specific tactics to ensuring data securityโsuch as ensuring logins are secure, no shared logins/passwords, not emailing data lists back and forth, etc.โwe need to borrow the concept from GDPR (the EUโs General Data Protection Regulation) and have one person on staff be the single point of responsibility for the policies and procedures surrounding all data.
Our Boards of Directors need to recognize their role in governing how that asset is managed. In other words, just as we have a facilities committee or a finance committee, we increasingly see a data governance committee as part of the board and responsible for overseeing management. The organizational data point person would report directly to that committee.
Of equal importance is having a data collection and storage policy and procedure that everyone must follow, as well as a data entry procedure manual and standards to ensure all data is entered correctly, appropriately, and consistently. Many resources are available for constructing theseโthese processes may need to involve legal counsel. Still, the critical importance of ensuring accurate, ethical, and secure data practices is a way to build and confirm our communities’ trust in us to manage their information correctly.
Read More: Data Quality: Why It Matters and What to Do About It
Dear Responsive Fundraiser: How can I streamline data hygiene tasks? I know theyโre ongoing, but they often take up so much time that I canโt focus on fundraising and building donor relationships.
โ Help Me with Hygiene
Dear Hygiene: The first step is taking the time to fix and clean the data you have โ and, yes, that might be a long and arduous task, but it is so worth it in the long run. Invest in automated processes, typically available through your CRM provider or outside data vendors, to de-dupe records, standardize entry, and correct any errors that can be fixed via automated processes (National Change of Address, SSDI screening to code deceased records, etc.).
There will likely be a number of records that cannot be corrected through these processes and will have to be addressed and corrected manually. Depending on the volume, the best way to do this is to commit to addressing them in chunks.
For example, you know you have 2,000 records that need to be manually addressed. This sounds extremely daunting, but setting aside an hour to clean 100 records daily for 20 days is doable, especially if that work can be divided among key staff members or volunteers. Yes, 20 days is a long time, but again, it is worth the investment in the long term.
This means there needs to be documented standards on how data should be entered and managed so that everyone enters it the same way. A data entry standards manual is an incredibly helpful resource (and is part of the aforementioned work of the data governance committee and internal, cross-departmental data standards team).
Once the investment in cleaning errors has been made and doneโand the time required to do it has been invested, it then becomes an issue of maintenance:
- Regular NCOA updates, de-duping, and standardization: Use existing CRM resources or external data partners.
- Regular review of data cleanliness: At least once a month, someone should review CRM reports that show potential duplicates, errors, etc., and fix them.
- Ensuring that all data coming in meets the standards and is maintained.
So, yes, these can be time-consuming at the start, but once theyโre in maintenance mode, they donโt take as much time and pay huge dividends in building relationships. You canโt connect with a donor you canโt reach.
Data quality degradesโit just does. People move, change addresses, get divorced or married, and change names. You can expect an annual loss of about 6%- 8% of data qualityโthat starts to add up.
As an example, letโs say you have a list of 1,000 donors who give $250,000 annually. Each of those records is worth, on average, $250. If you lose 6% of them in one year, just to data quality, thatโs $15,000 you cannot renew next year. (1,000 x .06 = 60. 60 x $250 = $15,000).
If you do not invest in data quality, you will lose an additional 6% of data record quality next year, which means you now have 120 donors at an average of $250 or $30,000. In other words, data quality starts to compound and affect actual revenue loss. Estimating that compounding data quality loss is a good way to measure just how important maintaining data quality is in justifying investing the time and expense into data quality.
Related: 5 Crucial Fundraising KPIs Every Nonprofit Needs
Dear Responsive Fundraiser: It can be challenging to contact donors who give through DAFs (donor-advised funds) at our nonprofit. How can we overcome that and uncover donor contact information?
โDigging for Donor Info
Dear Digging: Giving through Donor Advised Funds is growing. They are becoming increasingly popular as part of standard financial management and investments. It is much easier to open a DAF for everyoneโno longer can we assume that DAFs are the purview of the wealthy. This means that having a DAF giving strategy is essentialโmake sure itโs in your communications, and facilitating giving through DAFs as an option is just one step in the right direction.
Weโre also getting more and more data about DAF giving as itโs growing in popularity. According to the DAF Research Collaborative
- Less than 4% of DAF grants were made anonymously.
- Most grants were general operating as opposed to restricted.
- 54% of all DAFs gave at least half their original contribution within three years. After eight years, 58% had given 100% of the original contribution.
In several surveys, DAF donors state that the reason they didnโt give to charities via their DAFs is that they werenโt asked or didnโt know they could.
In its annual report, Fidelity Charitable reports that 96% of its DAF donors included names or addresses in their distributions.
The first step to connecting with DAF donors is to double down, invest deeply, and commit to building solid relationships with donors. Itโs very likely that more of your donors have DAFs than you realize, and as you continue to prospect and/or identify new prospective donors, making sure that giving via DAF is made easy through your website, giving forms, etc., is transparent so that they know itโs an option.
There are tools you can use to research DAF donors and identify DAF donorsโand theyโre phenomenally helpful and useful.
But let me ask you a question: If you discover that one of your existing donors has a DAF, does that change how you would cultivate them? Would you begin conversations with, โWe know you have a DAF. Will you consider a gift through it?โ
Just because someone has a DAF doesnโt make them more likely to give to your organization. The same principles holdโdo they have a relationship with you? Are they connected to your cause? Does your organization help them realize their philanthropic ideals and identity?
The more donors trust and engage with your organization, the more likely they will give through any giving vehicle, especially DAFs, and provide contact information.
It is possible that the transmission of a DAF gift to you did not include the name and the address in the paperwork.
But if you receive a DAF gift, be sure you have carefully reviewed any transmittal information and/or created an account with the DAF holderโsome have portals you can log into to research the disbursement you received.
Iโve seen instances where the person who opened the mail just passed the check along to gift entry but did not keep the transmittal correspondence, which included instructions on identifying the donor.
If you donโt receive a donorโs name and information with a DAF transmittal, we can assume one of two things: 1. They just forgot or didnโt indicate to the holder to provide the information, or 2. They donโt want to provide their information, which is part of our responsibility to accept and honor the donorโs desire for anonymity.
