BidPal’s Karrie Wozniak, Vice President of Sales & Marketing, weighs in on the importance of analytics for nonprofits, especially those facing retention challenges as a result of changing donor demographics.
As donor demographics change, retaining donors is a mission critical priority for nonprofits today. Nonprofits are taking a page from the business playbook and are looking to analytics to help them finesse the performance of their fundraising efforts. In an industry where every dollar counts and every donor is important, this is essential.
Thanks to technology, nonprofits have the opportunity to collect a wealth of statistics about their fundraising efforts and their donors. Whether it’s an annual event, year-end appeal, online donation page, or focused capital campaign, the data generated by fundraising provides important information to optimize donor loyalty and increase funds raised.
You can only manage what you can measure
This business adage is never more true than when applied to nonprofits. When trended over time, fundraising performance metrics reveal strengths as well as areas needing improvement. By tracking, measuring and evaluating fundraising events, groups target donor segments that yield the greatest return and leverage fundraising strategies that truly create donor engagement.
Are you reaching the right people?
Every organization wants to know if they are reaching the right demographic to support their cause. When it comes to events, it is important to understand which donor segments attend your fundraisers, how they are engaged in bidding and donating, and whether their average gifts increase year over year. Knowing how donors participate enables nonprofits to tailor fundraising to attract the right groups and identify new activities to engage donors.
Are you maximizing dollars raised?
Mining data to ensure fundraising ROI is a practice every nonprofit should use. There are three core metrics to measure fundraising success:
Cost per Attendee: To ensure fundraising cost-effectiveness, take the total event expense divided by total number of paid guests. Compare that to the average raised per guest. Are you spending more than your cause brings in? This data helps determine future ticket prices, leverage vendor contracts and trim expenses. This data can put your cause on the road to cost-effective fundraising.
Cost Per Dollar Raised is a standard measure of fundraising efficiency. It’s vital to understand how much of your net funds raised actually make it back to the cause. Divide total expenses incurred from the event by the revenue generated from that event. The national average is $0.20, where 80 percent of every dollar raised should go back to its charitable purpose. Most experts suggest that event costs shouldn’t exceed 35 percent of related contributions.
Technology Impact: Organizations that use mobile bidding technology glean important information from fundraising data, such as the time during the auction when bidders are most active, announcements that increase bidding or donations, and the impact of text messaging. Take the time to analyze and ensure that technology drives bottom line results and create a repeatable game plan for future events.
Are your fundraising packages on-target?
Insight about auction item performance helps organizers create the right mix of items to maximize revenue. Low performing items should be weeded out and replaced with more popular, higher demand items.
At silent auctions, “Buy It Now” items often are among the most profitable and sought after, selling for 150-200 percent of the item’s value. Insight about when these items sold is important. If the item sold early in the evening, it’s possible that it could have been sold at a higher price or at auction, driving up revenue.
Understanding the types of items your guests prefer also can increase revenue. Data shows that 60 percent of auction proceeds are derived from sports packages and only 10 percent from health and beauty. Having this level of auction performance allows organizers to focus solicitation efforts on areas that drive the most revenue.
Likewise, understanding contributors will help organizations refine future fundraising events. Know your top bidders, top donors and top contributors by total bill, as well as the top packages by sales and number of bids.
Are your promotions connecting donors to events?
Event organizers put a lot of effort into promoting events, so it’s important to know if those efforts are working. Event emails, hashtags, Facebook posts, Tweets, and other ways of promoting events can be difficult to track, but analytics can help.
Analytics can show which promotional vehicles are most successful and empower your organization to make informed decisions to improve the promotion of fundraising events.
Data and analytics are making fundraising smarter, more targeted and more efficient. With the right tools, nonprofits can be certain that more of the dollars they are working hard to raise are going to the programs and missions that power their causes.