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4 Data-Driven Fundraising Trends: Staying Ahead in the Field

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Staying on top of the latest and greatest in fundraising is essential for improving your nonprofit’s strategy and continuing to raise enough money to support your cause. In today’s fundraising climate, many of the hottest trends have one thing in common: data.

When you put data at the forefront of your strategy, you can dive deeper into your donor base’s specific preferences to create fundraising campaigns they’re likely to engage with. Check out some of the current data-driven fundraising trends and tips for how your nonprofit can stay ahead.

1. Predictive Analytics

Predictive analytics refers to the use of algorithms and machine learning to analyze data and make predictions based on that information. In the context of fundraising, predictive analytics can help you transform donor data into important insights that guide your fundraising decisions.

According to BWF’s guide to AI fundraising, there are three main types of predictive models nonprofits can use:

  • Giving behavior models. These models can predict factors like individual donors’ preferred giving channels, likelihood of renewal, and likely next gift amounts.
  • Predictive scoring. You may use predictive analytics to assign your donors engagement scores and categorize them based on recency, frequency, and monetary (RFM) value.
  • Giving program success models. Predictive analytics can also help you determine how successful different giving programs could be, such as annual giving, major giving, and planned giving.

Perhaps one of the most common use cases of predictive analytics for fundraising is donor prospecting. You can use predictive analytics tools to streamline the wealth screening process, identify potential major donors, find which donors are most likely to upgrade their giving, and more.

To successfully incorporate predictive analytics into your fundraising strategy, follow these tips:

  • Determine your goals. Before you dive into predictive analytics, choose fundraising goals to guide how you’ll use this technology. For example, the model you create will look very different based on whether you’re focusing on donor retention, prospecting, or planned giving.
  • Clean your data. The more accurate your data is, the better your predictions will be. Follow data hygiene best practices, such as auditing your database, appending missing data, and standardizing data entry, to prepare it for predictive analytics.
  • Choose the right tools. To implement predictive analytics, you’ll need to rely on the appropriate tools and technology to get the job done. Research your options, or outsource the process to an AI fundraising consultant for help.

2. Segmentation and Personalization

Donors crave personalized experiences. They want to feel special and know that your organization values their individual contributions to your cause and community.

The best way to personalize your communications is through segmentation. Segmentation is the process of grouping donors based on similar characteristics to better personalize your messaging to them. Nonprofits may segment their donors based on:

  • Average donation amount
  • Donation frequency
  • Donation recency
  • Donor lifecycle stage
  • Demographics
  • Communication preferences
  • Engagement level
  • Interests related to your cause

When segmenting your donors, it’s important that your nonprofit:

  • Defines its segmentation criteria. As you can see above, there are so many different ways you can segment your donors. Determine which segmentation criteria make the most sense based on your current goals, campaigns, and data.
  • Tailors its campaigns. Once you’ve successfully grouped your supporters, put your segments to use. Let’s say you’re running a discount card fundraiser. ABC Fundraising recommends this type of campaign because it allows you to gather support for local businesses and raise money for your cause. To maximize the success of your discount card fundraiser, you can use your donor demographic segments to help you choose businesses to partner with that reflect your target audience’s preferences. For instance, you could add a toy store to your discount cards if many of your supporters have children.
  • Updates its segments over time. As your donor base grows and changes, so should your segments. Reassess your segmentation strategy regularly to ensure it still reflects your supporters and their needs, and make adjustments where necessary.

3. Automation and Artificial Intelligence

AI can be a controversial topic, but when used correctly, it can help automate nonprofit fundraising processes and allow you to focus on more mission-critical tasks.

In addition to predictive analytics, your nonprofit can use AI for:

  • Donor segmentation. To more efficiently segment your donors, you can use AI to identify patterns in your donor base and group your donors accordingly.
  • Donor stewardship. Let’s say you’ve just wrapped up your school fundraiser and have a ton of tasks still on your plate but want to ensure you thank donors as soon as possible. You can use AI to automate thank-you messages to your donors before sending them more heartfelt notes once you have the time.
  • Donor support. If your inbox is full of donor questions, you may benefit from embedding an AI-powered chatbot on your website. This tool can help provide donor support by answering simple questions, guiding donors through the donation process, or giving them information about upcoming programs or events.

Using AI carefully and ethically is key. Follow these tips for responsible AI use:

  • Protect data privacy. You should store any donor data you’re collecting and using to power your AI fundraising efforts in a secure database or constituent relationship management (CRM) system. Make sure your platform has features like two-factor authentication, access controls, and SOC 2 Type II compliance.
  • Be transparent. Donors may be wary when they hear you’re using AI to process their data. Make it clear how exactly you’re leveraging their data to maintain donor trust, and let donors opt out of having their data used in your AI tools if they wish.
  • Hold your organization accountable. To keep your nonprofit accountable for responsible AI use, develop internal AI policies and guidelines for your team to follow. You should also have procedures for addressing any donor concerns about your AI use.

4. Impact Reporting

Donors want to know that you’re using their gifts responsibly. Many donors are happy to continue supporting your cause—under the unspoken caveat that you’re using their hard-earned funds to help those in need and drive your mission forward.

Keep donors updated on the facts and figures that demonstrate the outcomes of your fundraising efforts by:

  • Creating and sharing an annual report. An annual report is a document that summarizes your nonprofit’s activities for the past year. Include all important data points that illustrate the impact of donors’ contributions, and share the report with all stakeholders.
  • Using visualizations. Make the data in your annual report easy to digest by developing accompanying visualizations. Use a variety of charts and graphs to accurately depict your fundraising results and impact.
  • Incorporating storytelling. In addition to data, feature stories in your report that demonstrate exactly how your donors have allowed you to assist your beneficiaries. For example, an environmental conservation organization may explain that their flower fundraiser allowed them to move forward with their efforts to rescue endangered species like the Sumatran orangutan. They may highlight that one of the orangutans they rescued named Rue is now being rehabilitated at a local zoo thanks to donors’ generosity.

At the end of the day, your nonprofit aims to make a difference and help its beneficiaries as best it can. When you implement the most current data-driven fundraising trends, you can optimize your fundraising operations and maximize the support you gather for your mission.