How to Set Fundraising Goals That Make Sense
Use Your Data to Fundraise with More Confidence
I work for Abeja and today we're going to talk about how to analyze data patterns and trends to: fuel your year-end success; calculate metrics for how effective your fundraising activities are; and clean and maintain your database.
And all of these things are dependent on the other.
If you don't know about Abeja, we help small to medium-sized non-profits get donor mail done. A lot of times that's year-end appeals. And sometimes that’s annual reports or newsletters or acquisition mailings.
We do everything from soup to nuts on actually getting your donor mail done. And a lot of that is dependent on data.
Why is good data important to your nonprofit?
So why are we talking about data today? Why the focus on data?
There are really four main reasons:
You raise more money.
You'll spend less money.
You can make better financial projections.
You can set more achievable goals.
I don't know about you guys, but I have been in a nonprofit where the board said, “Hey, we want you to double your fundraising in the next two years.”
Oh boy. Was that not an achievable goal! Because the board just picked it out of, thin air and we didn't actually have the capacity to do that. Not enough donors, not enough fundraising team, all of that fun stuff.
So, data is really about making sound, strategic, and tactical decisions. And we're going to talk about how data and help you make the decisions that go into fundraising and success. So generally, let's just talk about costs. Revenue, right?
You are fundraising because you're trying to save the environment. You're trying to help homeless people. You're trying to feed kids, right? You need to maximize your donations and optimize your costs. Which maximize, in turn, revenue.
Formula for fundraising success
Now for fundraising, to maximize donations, you really need to get the right message, to the right audience, at the right time, and in the right format. On the flip side, on the expense side, you need to spend the right amount of money — actual cash outlay — and spend the right amount of time.
That’s true whether it's your internal staff or your volunteer staff, spend the right amount of energy.
If you have ever run a golf event or a gala where you spend six months just, oh, I'm thinking back to stuffing gift bags. I think everyone knows when your entire staff is consumed by an event and all of that energy just gets sucked out. You're really depleting your staff. That's what I really mean about energy costs. Was it good use of, of that mental and physical energy?
And then you also need to make tradeoffs on opportunities. A lot of strategy is not just about what you will do, but what you won’t do. You cannot do all things at all times. And you cannot be everything to everybody.
So some organizations will say, “You know what, we're not going to work on acquiring donors right now. We're going to really focus on retention because we need to bring our retention rate up.” So they're making a strategic choice that the opportunity to acquire donors is best left on the table.
Foundational fundraising metrics: strategic
How do you determine what the right costs are and the right inputs are for your tactics? We're going to start with foundational fundraising metrics. And these are all interconnected.
We're going to talk first about some strategic fundraising metrics. The things that you need to know in order to understand the overall health of your fundraising program.
Then we're going to talk about some tactical metrics. Those are the things that you can use to look at your specific appeals, the specific activities that you're taking, whether they're effective or not.
We’re going to look at ways that you can calculate your investment into those activities.
We're going to go into a ton of detail about these metrics a little bit later, but I just want to give you a taste of what we're going to discuss. We're going to start from the results and then work backwards to how you can get there.
The strategic metrics that I recommend that you pay attention to are focused on your donors and your gifts. You'll want to know:
how many total donors are in your database;
the number of people that you've retained;
your new donors;
your lapsed donors
how to convert those numbers into rates.
What percentage of your donor base do you retain, which percentage did you acquire, and which ones are you losing?
Sometimes you'll hear the attrition rate referred to as churn, especially in the for-profit space. Same thing with gifts:
total gifts;
amount given;
total amount given.
Then you can use those numbers to determine the average donation amount.
So overall strategic fundraising metrics are looking at some sort of strategy change. Right? For example: “We were focused on retention then we were focused on acquisition.”
There is a switch of strategies, or you can look at time period to time period this quarter this year compared to previous quarters. Previous years. Right, so it helps you compare apples to apples.
Foundational fundraising metrics: tactical
For specific appeals or other tactics, you want to look at tactical metrics. And so, same thing donors and gifts. You want to look at how many donors did you solicit or how many prospects did you cultivate.
Then look at your total responses and divide those two figures to get your response rate. So typically, a mail appeal will get a 5-6% response rate for a renewal mailing. That's an industry benchmark.
And then gifts, how many gifts did you get? How much was the total given, and what is the average donation amount?
Those are the metrics on a tactical perspective. So, what can you measure tactically? You can look at:
your baseline response rate to the industry benchmark;
whether campaign A or campaign B did better;
time period A or time period B;
donor persona or segment A vs. donor persona or segment B;
appeal design A or appeal designs B;
different types of stories;
email delivery times.
There's so much that you can compare on a tactical level. Now, of course, the input into your fundraising activities is just as important as what the output is.
Foundational fundraising metrics: investment
If you make $100 dollars and you spent a dollar, that might be a good investment. If you spent $100 dollars and make a dollar, that's not a good investment, right?
So, there are tangible costs and intangible costs. Tangible cost that you can calculate or your actual cash expenses. How much did you spend to rent that venue or cater that meal?
In the world of virtual events, how much did you spend for that professional videographer, to manage the event, the releases for music, and things like that.
And you can calculate your return on expenses by dividing what you spent on what you earned and then get a cost per dollar raised. And I'm going to show you guys all how this works. So you don't have to memorize all of these terms at this moment.
The other tangible thing that you can calculate is hours of effort.
Intangibles are those things that we know we put a lot of stuff into, but we just can't put a number on it. Opportunity costs, I talked about a little bit before — what you couldn't do because you were doing this.
There are also what I like to call “ick factors.” The ick factor is extremely intangible. Those are the things that are like, “Did I like doing this?”
And yes, we have jobs. None of us are independently wealthy, so you're not going to love everything you do at your job … but if that event just zapped all of your staff, the factor factors probably really high.
If someone did the appeal and they felt great about it. They got to utilize some new graphic design skills and they genuinely were challenged and enjoyed it, then the ick factor is very, very low, right? They want to do that work again. These are the things that you need to look at.
So, I went high speed through some of the metrics that we're going to look at. I want to pause at this moment just before we go into how to analyze all of that data, so you can set goals, and see if you have any burning questions at this moment. So please enter any questions in the chat and I'll try to get to as many as I can.
Marilyn asked, “Are we going to discuss the changes that have happened this year with the pandemic in terms of need?”
Not really. Because in the fundraising world, the fundamentals haven’t changed. The organizations that have kept fundraising with the right message to the right audience at the right time in the right formats, they are able to withstand the changes that are happening.
Those organizations that maybe were not on super solid footing beforehand are definitely struggling. So, Abeja how works with several different types of nonprofits and I'd say the closest of the really affected nonprofits were in the food banking, poverty alleviation, food insecurity area.
And though the need has definitely increased, people's generosity has also increased. These nonprofits knew enough about their donors that they just doubled the types of appeals that they were sending, and they know what works with their donors.
Some organizations that are a little less directly affected by the pandemic, we haven't seen actually a major negative effect on their fundraising efforts. Overall, fundraising has stayed steady with those organizations that have stayed the course.
So, the fundamentals haven't changed. The environment around us has. But if you stay the course and just follow your formula for the right people at the right time with the right message in the right format, all of that stuff, it shakes out. So, I don't think that there are some major things that we need to discuss here.
Marilyn says that there was a major concern in Tucson for, for housing of seniors and as usual funders have changed focus. When you say funders I'm going to assume that you mean institutional funders, foundations, corporations, things like that.
Abeja works with individual fundraising specifically. We don't do corporate, corporate grants, foundational gifts, things like that. We can certainly try to send you some, contacts that really focus in that area, but we really focus on individual giving, because that is 68% of all giving to nonprofits within the United States.
Individuals tend to be like the bond portfolio in your retirement fund. Hopefully, you have one. Those bonds are not sexy, they don't go up and down, right? They just keep your portfolio steady and that's what individual givers really represent in your fundraising portfolio. Steady as she goes. They're not big, but they do make up a huge portion of your budget. Thank you so much for the question, Marilyn.
How to make decisions through analysis
Let's talk about analyzing data. I mentioned earlier we're going to talk about the end result and then get into the nitty gritty of how to get there.
So, I have waxed philosophical about the right message. Here is a table of comparing some email campaign performance. And say you're in charge of this organization. What type of story would you choose for your year-and appeal based on these numbers?
Take a little bit of time to just absorb this data. You don't, you don't need to memorize it, just see if you can identify some patterns here and enter them in the chat.
Christie says she would use a story of the child recovering from cancer and I'm going to make a leap that she picked that one because it's the highest return on expenses. We've got a 1400% return on expenses and it's actually the highest amount of dollars given at $2,360.
Email has a very high return on your expenses because the actual expense of sending an email is usually just time, right? Or maybe you paid a photographer to go get a couple great photos of the subject.
But this example illustrates that “what are you trying to chase?” I think Marilyn had a good answer with “veteran” because of the higher average gift.
It really just depends on what your goal is. If your strategy is to increase your average gift size, then definitely go for the veteran. And if you're hoping to maximize top line revenue, then definitely go with the child recovering from cancer. If you're looking to reengage the highest number of donors — the number of gifts — you might want to go with a single mom.
Or you can look at this and say, “Gosh, can we find a single mom who is a veteran who has a child recovering from cancer? Now, I'm just kidding — that's like the Holy Grail.
This is just a small illustration on how you can use your past performance to find a really resonant story for your holiday appeal. Look at the things that you've already done and see what the response rate is.
If you don't know what types of stories your donors respond to, then it's about time that you start testing them deliberately and it's absolutely okay to make tests. Sometimes you will not have the data you need to make a good decision.
So in those cases, setup design a test, so you get that data back. You may lose money on it, but it will help you on that longer term goal.
Comparing segmentation tactics
So we’ve got the right message now for your organization. And here's an example of the right audience. This is a real-life example of an organization we work with. And they were always segmenting their mailings for region one and region two, and it was costing them about $5,000 dollars to do that.
On the flip side, they tested their assumption that having different mailings for different regions was important to their donors. But they never tested it. When they tested one segment vs. two segments, their expenses were a little bit lower, $4,600, and there was no significant difference in the response rate.
You can see that the response rate is hovering right about 1% for this organization. And yes, that's not great, but there is a strategic reason behind it. But their response doesn't change dramatically when they collapse their mailing into one appeal. And it saved a whole bunch of staff time.
It's less work for their clients because they're only working with one family on a story. It's less work, it costs less, and it doesn't affect their return.
In this case they collapsed their mailings. Your organization may see an increase in segmenting your audiences. Things that we see a lot are lapsed donors versus current donors. Lapsed donors tend to decrease your overall response rate, so maybe you send a different mailing, a slightly different mailing, to those folks.
If you have a lot of email signups — people that are coming to free events or things like that — but they haven't become a donor, you might want to treat those people differently, too. Give a message to them specifically. So, you can use data to determine who your right audience is or test who your right audience is.
The right time and the right format. Extremely important. If you are, in general, if you're a food bank you want to get your holiday mailing in before Thanksgiving. Because people are starting to think about turkeys and somehow that incites giving.
But if you're an animal shelter, when is the right time to send your holiday appeal? When is the right time to send an email? You can look at past performance and say, “This is where we get the best bang for our buck.”
Format is a little bit more difficult to compare, but you can do head-to-head tests. We've done this with an organization that traditionally did year-end postcards. We helped them design a test that had a traditional appeal letter format head-to-head against the postcard. They had the budget to test those side-by-side, so half of their audience got the letter and half of them got the postcard.
Not shocking to me, but informative to them was that the postcard had a much, much lower response rate. So, now they focus on appeal letters, and they've ditched that postcard format.
Comparing year-end fundraising tactics
Here is a typical year-end campaign. You've got some sort of virtual event, a newsletter, Giving Tuesday, a holiday appeal, and a year-end email. And there's some variety here because, of course, you don't engage your donors with the exact same format every single time. That gets boring.
But if these were the 2020 results for your organization, take a look at these numbers. If you were planning 2021 year-end, what activities would you repeat and what would you ditch? Put your answers in the chat.
Marilyn says she would redo the holiday appeal and the virtual event. The virtual event gave $103,000 and return on expenses of 273%. So that's decent. It was very icky, though, for this team. They put 600 hours into the event — volunteers, staff, all that sort of stuff.
I might, as a leader, look at that and say, gosh, I really do need that $100 000 in my coffers, but I need to figure out how to make this easier for my staff. I need to make this a lot less icky.
What does that look like? Does that mean increasing my expenses ever so slightly in hiring an event planner to manage it? It might look like that. Right?
The holiday appeal, Marilyn would repeat again. It did not have the absolute highest return on expenses, but it had a really good showing, brought in $30,000 dollars, an 896% return, and it didn't take a lot of effort.
In particular, I always loved year-end appeal emails. Giving Tuesday and year-end are really the only times that email performs spectacularly in terms of dollars given. Right?
So those people that forget to respond to that holiday appeal — I am one of these people — and then on New Year's Eve those year-end emails come through and I just get out my credit card and just do them all in a batch. But without those reminders, unfortunately, that mail may stack up.
I really liked that Christie said she would redo Giving Tuesday, but she would try to focus more for a higher rate of return. Giving Tuesday is a very powerful event, but it's not something that you can phone in.
Most of the organizations that are successful on Giving Tuesday are using Facebook ambassadors, Instagram ambassadors. Do those exist? The people that do it really, really well are leveraging their network and spend a lot of time and energy — weeks — planning for it.
This is just a practice round of what would you do again and why would you. Is there anything that you would do twice, or you would think about adding? Maybe a test for this holiday season? Is there anything missing? I'll just let you noodle on that in your head.
We're going to take a step back a little bit and just talk about strategy. What is the right growth strategy for your organization? I hear a lot of boards of directors say, “We need more donors, we need this, we need that!” And they may not understand that acquisition is a very specific strategy.
Setting year-end goals
So, these are real numbers from an animal welfare organization. I just want to show you how strategy can drive metrics over time. In 2018, this organization was making a strategic shift and so they needed to strategically churn a lot of their existing donors because they didn't match their ideal donor profile. They were making a strategic shift.
Their mission was changing ever so slightly into more of a social justice realm instead of just an animal welfare realm. If you look at their 2018 number, you say, “Gosh, that retention rate is so low!”
But it was a strategic priority to retain only the best donors in their new, ideal donor persona. Then they had to spend a lot of time and money on acquiring the donors that they wanted and letting the rest of them go.
This slide really illustrates that the numbers aren't a value judgment on your organization. The numbers just tell you if you are following or if you're doing the right things for what you're trying to accomplish. Right?
There is a strategic change in 2018, so they're consciously letting some donors lapse, retaining just the best, and acquiring some new folks. 2019, they can start retaining a lot more because they acquired a bunch. They're spending a lot less on acquisition and reducing attrition.
Then in 2020, they've really decided that they've tapped out of retention. It's impossible to retain a 100% of your donors. The industry standard is 47% of your donors will stay with you. Some people have financial difficulty. Some people, unfortunately die. Some people move out of your service area.
You can't retain them all, so they've really hit that retention rate that they want, around 50%. And they're starting to lessen their investment in acquisition. This is an illustration of a growth strategy. How to grow your organization or change your organization over time.
Strategy is what you do and choose not to do, and your strategy is going to influence your goals. I've mentioned this a little bit. Your goals all are unique to your organization.
You may be trying to acquire new donors. You may be trying to retain more donors. You may be worried solely about the amount given. Right, and yes, there is some push and pull. It is not one over the other, but you do have to prioritize which of which of the goals you are going to focus on.
Let's talk about this for a little bit. So, this is just a year-end, side-by-side comparison of what the holiday appeal did for a particular organization over the last few years. I'm going to ask you again, if you were in charge of this organization’s fundraising, would a goal of $50,000 in donations for the holiday appeal be reasonable. Why or why not? Tell me in the chat.
Some people are saying, “Yes, $50K would be comparable to previous years or the rate of growth.” What I see in this is that 2020 was an outlier. 2017 we got a 6.3% response rate, a 6.8% in 2018, a 6.5% in 2019 and then it nearly doubles in 2020. What happened there?
I would look at that as an outlier and really say, “Hm. Is that because we worked extra hard on retaining our donors and increasing our average gift rate and all of these other things? Or was that because 2020 was a weird year?”
Right, so when you start to look at trends, I want to encourage you to say one blip does not a trend make. A blip may just be a blip. You might be setting yourself up for failure to expect a 13% or a 14% response rate — expecting that trend to continue.
You might want to look at rolling averages over time. Right, so our average response rate over the last four years is actually closer to 8%. What does 8% response look like for us this year?
It's just something to think about because I see this a lot with fundraising teams and boards of directors. So, this happened. Miraculously, a check appeared at one of the places that I worked for $100 000 dollars — just out of the blue — brand new donor. We thought it was fake. We checked it out, it was fine but that was a blip. That was a huge blip in our overall revenue.
But the board didn't know why our revenue bumped up so much. So, they're like, “Okay, well, yeah, you can increase 17% because you're going to get another $100,000 dollar check.” I'm sorry, that's not how that works. This happens with bequests. You know, sometimes you get a large payout that goes boop — makes your financials boop up — so pay attention to those things.
The outliers that are extreme and I encourage you to think about them thoughtfully and carefully and try not to set up your team for failure because of things that were outside of their control.
Giving was up 3.8% in 2020 (adjusted for inflation) across the U.S. Now that affected some types of organizations much higher. Giving to arts organizations was very, very down, but in the social services area it was super high. So, would you set up a goal to, to equal 2020? Maybe, maybe not. It’s up to you guys.
That’s just practice on what you can do with the fundamental metrics. Unfortunately, you have to do the math yourself.
If you do have a question you haven't gotten in, just go ahead and enter it. I will get to it eventually, but let's talk about calculating metrics. Okay?
How to calculate useful metrics
First, a giant caveat. Hopefully, you guys are using a donor database, a CRM. No one's invented an acronym specifically for donor relationship management system. For your CRM, you might be using Bloomerang, Little Green Light, eTapestry ...
Work with your CRM and not against it. Every CRM will calculate things ever so slightly different. They might use a rolling average donation amount. Or they might do it by year. They might consider lapsed donors as people that haven't given in the last two years. Or three years.
Get to know what the definitions are in your donor databases — existing tools and reports — and adjust my instructions accordingly. Use what you already have and flex to it instead of trying to force that software to flex to you. You have it all. That is great.
However, giant caveat, if you're trying to switch to a new system, I'd highly recommend figuring out what aligns most with your definition of these metrics. There really is no right or wrong. Just pay attention because they are slightly different.
How to calculate overall donor metrics
Alright. You do not need to memorize these. We are recording this webinar. We are going to prepare a transcript and there is also a job aid with all of these instructions here. But I'm just kind of going to go through them and orient you to the actual process.
The process that I've outlined is based in Excel. That's the other caveat. If you're using Open Office or Google Sheets the auto sums may be slightly different, things like that.
What these procedures include are: work with your CRM; pull the data; export to Excel, and start calculating.
It's an assumption that your donor database doesn't have this information. If you have to run it manually i.e. you don't have a dashboard inside of your existing system.
So total donors, you need to know who has donated to you or who hasn't donated to you. And that's the number of households who have given at least one time in any previous period. You're going to run a report, filter based on gifts greater or equal to one — however your CRM determines that — and head of household equals true.
A head of household inside of a CRM may be called primary donor or — my brain is not working — it's often referred to as the head of household but some donor databases are slightly different, so the terminology is different.
Megan, excellent question: “Why head of household equals true?” I always recommend that you consider households instead of individuals when you're looking at donor retention rates, when you're looking at your total metrics and here's why.
I may write the check one day. My husband may write the check the other day. Or most likely we put in our credit card information. But the money is coming from the same world.
And would you consider that I have lapsed, Briana Klink, has lapsed when Arturo Ruiz has actually sent in our year-end check? So, households can be a little tricky, but generally I recommend using households as your base. This is a unit of donors. Instead of these are two donors.
You might look and see that you have a lot higher lapse rate if you separate your individuals inside of a household unit. I hope that answers that question.
Most donor databases will allow you to combine people and households. Those are also the people that you're going to solicit. Generally, you're going to send one letter. So, when you're looking at your response rate for a particular appeal, you actually send one letter to a household. That's one set of donors that was solicited. So that's that. All right.
(Question from the chat) Does that mean we should always assign a donation to the head of household? No. I don't want to get too far in the weeds of how to track donations. Each donor database is ever so slightly different, but I will say this. I spend a lot of time in databases. So, if you have specific questions, first, check what your donor database’s Knowledge Base or Support Center says is the best alignment in their system.
But generally though, if I am the head of household it just means that I'm the person that was either the first donor or my name started first. Like some organizations will choose to alphabetize. Some organizations will always put whoever was the first donor as the head of household.
That really doesn't matter. It's no longer a male / female thing. But generally, if you're attributing a gift, attribute the hard credit to the person who gave the gift and a soft credit to the other person in the household — if that doesn't mess up your organization's database. some databases will automatically roll them up, some of them won't. You really need to get to know your database and all of those procedures.
Okay, off of the CRM discussion. We want to look at total donors in a particular period. In this case, number of households who gave in 2020. And you can change those figures as you need. Of course, run your CRM filters with the dates between X and Y. How you do that is ever so slightly different depending on your CRM.
Make sure you include their name, address, first gift date, last gift date. You can export that to Excel and then note the count at the bottom. If you select any column in Excel, it will automatically sum it and automatically show it to you in that bottom system tray. We're going to use that same Excel file for the rest of the metrics.
So, you can apply some filters and get the new donors in that particular period. Similarly with retained donors, subtract the first number from a second number. Right? And for lapsed donors, you're going to subtract the total number of donors from this period from the total donors in all time.
Now when you're doing all of these calculations, save the stuff in a separate Excel sheet, right? You want to save the actual sums and averages somewhere else. This is just the raw data that you're working with.
How to calculate rates
Rates help us compare apples to oranges. Right? The retention rate is the percentage of donors who gave in this period versus who gave in a previous period. You're going to divide that total number of retained donors by the total number of donors.
Acquisition rate: total number of new donors by total donors and the attrition rate, right? That's going to be those who did not give in that period.
(Response to chat) Jasmine, absolutely. You are getting a recording of this. You'll get the slide deck and there will be a transcript of the entire session and a job aid with all of this information. It's like a two-pager so you can just keep that at your desk.
Like I said, you don't need to memorize all of this. This is just super tactical information and we're going to rush through the rest of it, too, and get to the super fun stuff — cleaning.
How to calculate overall donation data
So you can calculate overall donation data. This is a new report working with Excel. You're going to get total gifts, total amount, given your average donation amount, the average number of gifts per donor, and then you can start looking at campaign and tactic metrics.
How to calculate campaign/tactics metrics
This is a little bit different, in that you do need to know how many people you solicited, so you may need to go into a separate system, you may need to connect with your printer and say, “Well, how many people did you actually mail after you ran the NCOA and CASS checks?” When 300 people dropped off of the list because they moved, or we couldn't reconcile their addresses. So that's going to be your number of donors solicited.
How many responses did you get? It really depends on what you're measuring. At Abeja, we generally count responses as money in the door. If I sent in a check, that is one response.
But you might have other tactics that you're more interested in: the number of clicks throughs or the number of attendees at your virtual event, etc. The responses may not be in your CRM — they might be in a couple of different places, right?
Your response rate, very easy. Simply divide the number of responses by the donors solicited. Then you'll use the same procedures for the total gifts, total amount given, and the average donation amount as the strategic tactics.
How to calculate direct expense metrics
Actual expenses. You want to know how much things cost. Right? What are your direct expenses? You mean to decide on a method and then stick with it.
For example, you're running your own appeal in-house. Are you able to consistently count paper and ink and envelopes in actual expenses? Or is that just considered overhead in your office? Would it be too difficult to calculate that information? If you're outsourcing printing, it’s very easy. You get the invoice.
If you’re doing stuff inside, you need to figure out what is most important for you to track for expenses. Is it actual cash outlay? Are you just going to assume a 20% overhead? It really depends.
And talk to your accounting team or bookkeeper and say, “What is actually possible?” Can we just say at the end of the year that 20% of all printing expenses are fundraising it? It really depends on your organization. But what you should do is pick a method and stick with it, because if you keep changing your method then your numbers are going to go up.
Whatever those expenses are, your percentage, your return on expenses, you're going to subtract the expenses from the total amount raised. You'll end up say, I spent $20,000, I earned a $100,000, so I end up with $80,000 and divide that by the expenses.
So, $80,000 divided by $20,000 is 400%, right? It's four which turns into a percentage of 400%. That's your return on expenses. Then the cost per dollar raised is your total expenses divided by the amount that you raised.
How to calculate indirect costs
Indirect costs. Very difficult from a strategic perspective, best used for tactical things. This appeal, this gala, this virtual event, this, this postcard campaign.
Hours of effort, so the sum of all the hours spent by all your staff and volunteers. Right. Even if the labor is free … it is not free. Could your volunteers have been doing something else?
Right. Just because you didn't pay for it with cash doesn't mean you didn't pay for it with opportunity costs. What couldn't you do because of this? And that's really fuzzy.
You know, you may have not been able to spend much time researching and applying for grants. You may have not been able to spend a lot of time cultivating major donors or stewarding your major donors. You may not have been able to get the annual report out on time. What are the things that you couldn't do because of this?
And then I mentioned there is that ick factor. Those are those intangible reasons why you would or wouldn't do that effort again. We all know that feeling where, “Gosh, I worked so hard for so little reward?”
And if you can't put words to that, I recommend using an emoji scale. How do you feel about it? Just like “meh,” “great” or “ugh, I will never do this again unless I have to.”
I want to share just one example of this. This is not a client of ours, but I recently went on vacation, and I love dinosaur bones. I love dinosaurs. I love bones.
We went into the desert and looked at dinosaur tracks and bones in situ and we went to a museum. The museum had volunteers, very small, tiny, small-town museum.
The museum had volunteers creating dinosaur bone replicas. I talked to these volunteers, and they really enjoy the work and they sculpt them, they paint them, and they're really amazing.
And I was so excited to go into the gift shop and see they sell these replicas in the gift shop. I was like, “I get to go take home a Utah Raptor claw, that's so cool!” In the gift shop, all of these replica bones are between $1 and $10 and they're out of nearly all of them.
I talked to the gift shop manager and asked, “How in the world? Why would you charge a dollar? I just talked to the volunteers, and they told us it took seven hours to make this one bone look beautiful.” And they said, “You know, volunteer effort is free. The plaster doesn't cost much.”
They were thinking about it strictly in an actual dollars spent way: “Well, the plaster is 30 cents, so we tripled the price.” I was like, “Your volunteers are spending hours on these! If you had to pay someone for this … and also, you know that the supply and demand are off because you're nearly sold out.”
So, think about value. Think about the value of time. Yes, the volunteers enjoy it, but there are so many other things those volunteers could be doing or your staff could be doing if you charged $20 for this raptor claw instead of $5. Personally, I would pay $50 dollars, but that's just me Anyway, that's just one small example of indirect costs and the need to really pay attention to the total value.
Okay. We ran through those because I don't expect you to memorize them. You're going to get resources so you can look through and calculate those metrics later.
How to clean your data
I also came back from vacation, as you know, and so my house kind of looks like this. All of the bags go up, go explode. I haven't finished all of the laundry … and data is just like your home.
It needs regular maintenance. It needs cleaning and it needs systems in order for you to feel good that your data is accurate. Because those metrics that you're calculating are only as good as the source information that you're inputting into it.
Start with standards
I'm going to go like five more minutes and because I know we're a little bit behind. You need to put in some elbow grease for your data. The first thing that you need to start on is to set standards. I kind of mentioned some of these.
Some databases automatically change the household addressee or envelope name based on who is the head of household and who is not. Some of them don't. Some of them do X, Y and Z, so you have to set up some standards, so you don't have data willy nilly out there.
Example style preferences: formal household name
Some style preferences. If you're manually doing stuff, you can use Excel formulas to manually create like an addressee or an envelope name if your donor database doesn't do that. But you need to have some standards so that every person who is inputting data follows the same rules. Otherwise, you get a lot of chaos.
Here are just some examples of when people who have the same last name live in the same household. Or if people in a household have different last names, like my husband and me.
Example standards
Other standards. How you classify your donor segments. Some organizations say SYBUNTS (gave some year but not last year) are three years ago. Some say SYBUNTS are two years ago. Use definitions internally, stick with them.
Mailing address standards are super important, especially if you want to get mail to your donors.
Abeja’s rapid cleaning method
So, we have a rapid cleaning method for your database. Essentially, it comes down to leveraging your CRM's existing duplicate removal or merging tools. Then you need to brute force the rest of it using Excel.
This is the order I recommend you go in, starting from the things that are the most individually identifiable. Many people don't share an email address like they would share an address.
So, we're starting from individual information and getting closer down to household information and then fixing all the errors. And each step you should reuse your CRM tools to get rid of the duplicates, because more will surface with every round of cleaning.
Now, there is a whole blog series on this process with step-by-step instructions, so I recommend you go to that.
Rapid cleaning tips
When you're cleaning your data, and this is just rapid cleaning, if you want a comprehensive review, we can talk. We do provide that service, but that's a lot more involved, so rely on an Excel expert. If you are not an Excel expert, then learning it right now before year-end is probably going to be an extra stressful thing for you.
Do you have a nephew or volunteer that really knows Excel? See if they can help you with this. There are add-ins to Excel that make this hygiene process much easier and faster. Or if you've got an Excel guru that can write custom macros, use those too.
Focus on your best, most recent donors. 80 / 20 rule. You cannot fix everything, so focus on profitability. Always save backups early and often. Merge when you can and delete only if you must. If you're not sure how to do something or what to do, then test with a small batch. Instead of doing 100 records, do 10 and test it. And make a back up to the backup.
When in doubt, you're not sure if these people are married or not. Be conservative. Mail them separately. And then this is kind of back to number 3, focus on profitability, not perfection. Focus on your best, most recent donors. Focus on the things that will help you get your tactics for year-end out the door.
So, I still get “Dear Briianna” with two “i’s” from one organization I donate to. And they probably don't care that much because I send them $50 a year. If I was a $5,000 a year donor, I might be really pissed off about that. Right, so focus on profitability, not perfection.
So, we are at the end. We went through a whole bunch of information. Again, this was recorded. We will get a transcript, it will be on our blog, and you will get a job aid with the procedures on just a two-page piece of paper. It's digital. We're not sending you an actual paper.
Overwhelmed? We can help
But if you are overwhelmed, which you might be, Abeja can help. As I mentioned, at the top, we help organizations with their donor mail and we get it done fast. So, we can do your appeal writing, your design, all your list prep, and your print management.
And we do all of the things in data that will help you develop a strategy, decide which tactics to do, and actually get your appeals, your annual reports, all those things out the door. We help organizations setup standards and processes, figure out what their data strategy is, do to hygiene, appends, and analysis.
Appends are when you go through your data and say, “Gosh, we need to raise $80,000 and my mailing response rate is 6%! I've got this many donors with mail addresses. Gosh, I need 200 more donors.”
Well, you have an email list and those emails that don't have addresses, those are people that like you and there are services that can match that email address with a physical mailing address. It's not perfect, it's not 100% one-to-one but those appends really help you increase the size of your mailing list so you can have better year-end returns.
So, thank you for coming. Thank you for listening and thank you for participating.
