Improving Data Analytics and Customer Relations in Nonprofits
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Recent reports regarding newly implemented tax policy and a changing generational landscape point to the growing uncertainty facing fundraising in the nonprofit sector. Compounding this uncertainty is the unfortunate tendency of the nonprofit sector to be adverse to for-profit techniques, such as risky innovative approaches and for-profit data analytic and measurement methods. Without becoming more agile in their reactions to these market changes, nonprofits will be unable to transition their fundraising policies to overcome newly cited donation hurdles. The result of these inadequacies will be short term and long term decreases in recruitment of new donors, donor retention and overall donors which, overtime, will lead to a decrease in overall dollars donated. The goal of this policy proposal is to create a donor management policy that will increase both donor retention and overall revenue from private donations. The approach contains several aspects which, in totality, aim to increase overall revenue by growing individual donations in four areas: first, by increasing the total number of individual donors; second, by increasing donor retention; third, by increasing the average donation amount for each donor; and fourth, by increasing the frequency of donations of each donor. The policy proposed requires a full data audit to assess whether or not the United Way has the capabilities to segment populations of donors and assign account managers to focus on the highest value donors. An internal A/B test will demonstrate both effectiveness and efficiency. A test of this nature requires taking two accounts with a similar donor make-up, treating account A with traditional fundraising techniques while treating account B with a specific account/ customer success manager. After an appropriate amount of time, clear quantitative measures will reflect the effectiveness and efficiency of this approach. If the overall revenue generated is estimated to be greater than the cost of adding additional staff, then the proposal should be considered and evaluated. Though this proposal has several aspects to explore before implementation, steps should be taken immediately to assess the quantitative and qualitative capabilities necessary to do so.