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The Importance of Donor Data

 

"After people, data is your most important resource."

            John Kenyon, technology consultant to nonprofits

 

It’s been said that, next to the person who gives to your organization, information is the Development Officer’s most important friend.  This article explores why nonprofits should invest in tracking donor data, and how it can be effectively and ethically used to raise funds. 

 

 

The database system

 

There are all kinds of nonprofit databases available on the market, ranging greatly in cost, functionality and ease of use.  If you are just starting out, it will be worth your time to investigate the various options, both through online research and by asking colleagues for their recommendations.  In the end, it’s less important which system you select than it is that to make sure it is set up appropriately.  It is never a good idea to say “well, I can’t figure out how to do this part so I’ll just set it up this way for now.”  Take the time, make the calls, get the expert advice to do it right the first time and you will save many, many hours of time and much frustration later.

 

If you have inherited a system that you find difficult to use (you’re not sure where to put certain types of data or you’re spending way too much time figuring out how to get good reports) it will be worth taking the time to re-configure the system up front.  Get rid of reports that don’t work, or are of questionable value.  Add fields that are missing. 

 

If you are unsure how to create or fix your database, invest in some training or coaching.  Is there a tutorial that came with the software?  Check to see if you have a contract with the database provider that provides for ongoing support.  Or you may have to travel to the provider’s location to learn the system. 

 

When thinking about donors, remember that they may include businesses, foundations, government agencies, and other nonprofits, in addition to individuals.  Your system should accommodate all of these types of donors.

 

Conclusion:  Your data will only be as good as your ability to track and retrieve it.

 

 

Why track donor data

 

You know it’s important to have donors – those who contribute to your organization – so that you have the funds to carry out your mission.  Tracking information allows you to effectively cultivate those donors, so that they might continue to support your organization into the future.  What is donor cultivation?  Think about it in terms of cultivating a friendship.  In the case of your personal life, you might cultivate a friendship by calling your friend, spending time with her, and celebrating important milestones like birthdays.  You thank him for his advice or the dinner he treats you to.  You share what’s going on in your lives.

 

As a development professional, you are cultivating a friendship between the donor and your organization.  Unlike a personal friendship, however, you are being strategic, to make sure that time doesn’t slip by without contact from your organization.  And your goal is to find and cultivate all who have an interest in your mission, which may be many hundreds or thousands of friends.  You can see why a system, including a database and a plan for reaching out to donors, is critical to your success!

 

In addition to information about donors, there’s another group you want to track and cultivate, and that’s prospective donors.  These are people who, in some way, come to know or be involved in your organization.  Among them are your donors of the future.  Thus, you might include the following in your system.

·         Visitors to your institution

·         Participants at your events

·         Volunteers

·         Alumni of your classes

·         People who request information about your organization

 

For purposes of this article, I will refer to donors and prospective donors as constituents. 

 

Conclusion:  Data supports effective cultivation that will help you retain current donors and will lead to new donors.

 

 

Threats of a weak system

 

What would happen if you, your Executive Director, or other development staff suddenly left your organization?  Without a strong database system, it could be impossible to effectively continue the cultivation process.  The database serves as the institutional memory of the organization.  As professional development staff, it is critical that you let others know where you are with which constituents.  After all, you are being paid to cultivate these friendships on behalf of your organization. 

 

Another example of information that might be lost, if not effectively tracked, is any specification about what funds are to be used for.  Say you have donors who contribute specifically for new computers for the staff.  If no one else knows the funds have been contributed for this purpose, and you are no longer in the picture, the purchase may never be made.  No glowing report is forthcoming.  Imagine the disappointment when the donors next visit the office and everyone’s still struggling along with their old equipment. 

 

Conclusion: You have a professional responsibility to track constituent data

 

 

What to track

 

It’s a good idea to include all data that the constituent provides to you, or that you discover through the routine of your work.  Data should be kept in distinct fields so that you can pull what is needed for any type of report.  As a very simple example, a constituent’s street address, city, state and zip should each be included in their own fields, instead of one address field.  This way, you can sort or pull records for a specific group in a particular area.

 

Following are lists of data you might consider tracking. 

 

            Constituent Information

            First name

Middle name or initial

Last name

Salutation

Title

Business name

Business street address

Business city

Business state

Business zip

Business phone

Business email

Business fax

Home street address

Home city

Home state

Home zip

Home phone

Home email

Cellular phone number

Interests

Relationships (connect to others in DB)

Participation or events attended

Board or committee membership

Volunteer activities

Source of initial contact /introduction

Date record created

 

Gifts

Date of gift

Amount of gift

Gift club

Payment: cash, check, credit card, stock, in-kind

Solicitation method: campaign, event, online

Donor designations or restrictions

Special: matching, honorarium, memorial

Soft or split credit

Date of thank you letter

 

Pledges (made for future gifts)

Pledge balance

Payment schedule

Reminder dates

Delinquency tracking

 

Contact Management

Communications (calls, messages, mailings, etc.)

Contact notes

Task due dates (scheduled contacts for a moves management plan)

 

Membership

Date membership card and materials sent

Renewal date

Membership status (current or lapsed)

 

Grants

Amount received

Pending requests

Deadlines (for applications and reports)

 

Volunteers

Availability

Dates/hours of service

Interests

Skills

 

Events

Registration/tickets

Date of confirmation letter

Seating


Conclusion:  Keep accurate and comprehensive data; you will find many ways to use it.


 

Using your system

 

You will save a lot of time if you pull all of your data into one system, instead of a variety of lists and databases, and then use the system to create and track all of your communications.  For example, you enter a new gift and create the personalized thank you letter, membership card and envelope in one step.  The system then notes the date these materials were created. 

 

Tip:  Set up your database so that you can make bulk entries for communications, for example creating the list for all who will receive a newsletter, and then creating a bulk entry entering that mailing for all on the list.

 

As important as creating the system, is making sure the data is entered carefully and accurately.  It is important that the responsible staff train and check the work of any other staff members who will be using the system.  Documenting the processes for input (and report outputs) is also important.

 

Creating queries and reports is a primary reason for tracking data.  Being able to pull information about your constituents will allow you to analyze, plan and communicate with other staff, your Board of Directors and the general public.  You may need to create reports for other stakeholders, such as foundations considering grant requests.  Reports will also help you determine the effectiveness of fundraising campaigns. 

 

Following are some reports you might consider creating.

 

Current donors by giving level

Length of giving history

Lapsed members or donors

Relative success of fundraising events and campaigns

Progress against budget goals

Cultivation plan for individual constituent

 

Conclusion: Work to streamline your system to increase efficiency and ability to use your information.

 

 

Data Backup

Of course all technology systems should be regularly backed up at an offsite location.  In addition, hard copies of development records should be kept.  Set up a file for each constituent and keep copies of all correspondence, including the envelopes.  You can also keep copies of newspaper articles or other information that might help you build the relationship in the future.

Conclusion:  Creating a database is not the end of good tracking practices.

 

Protecting Donor Privacy

 

Tracking constituent information is a crucial part of effective fundraising.  Protecting that information and applying the highest degree of ethics in its use is critical to the reputation and future well-begin of your organization.  Therefore, you should have a strong Privacy Policy in place.  Access to constituent data should be limited to appropriate development staff and those individuals with access should sign a privacy agreement. 

 

The following Donor Bill of Rights was created by the Association of Fundraising Professionals (AFP), the Association for Healthcare Philanthropy (AHP), the Council for Advancement and Support of Education (CASE), and the Giving Institute: Leading Consultants to Non-Profits. It has been endorsed by numerous organizations.

 

The Donor Bill of Rights

 

Philanthropy is based on voluntary action for the common good. It is a tradition of giving and sharing that is primary to the quality of life. To ensure that philanthropy merits the respect and trust of the general public, and that donors and prospective donors can have full confidence in the nonprofit organizations and causes they are asked to support, we declare that all donors have these rights:

I.    To be informed of the organization's mission, of the way the organization intends to use donated resources, and of its capacity to use donations effectively for their intended purposes.

II.   To be informed of the identity of those serving on the organization's governing board, and to expect the board to exercise prudent judgment in its stewardship responsibilities.

III. To have access to the organization's most recent financial statements.

IV. To be assured their gifts will be used for the purposes for which they were given.

V.   To receive appropriate acknowledgement and recognition.

VI. To be assured that information about their donation is handled with respect and with confidentiality to the extent provided by law.

VII. To expect that all relationships with individuals representing organizations of interest to the donor will be professional in nature.

VIII. To be informed whether those seeking donations are volunteers, employees of the organization or hired solicitors.

IX. To have the opportunity for their names to be deleted from mailing lists that an organization may intend to share.

X.   To feel free to ask questions when making a donation and to receive prompt, truthful and forthright answers.

 

Your organization should ensure that development employees are well versed in the Bill of Rights and in the organization’s own Privacy Policy.  The following is a sample policy.

 

ORGANIZATION values each of our donors and takes their privacy very seriously. To that end, we maintain the highest level of confidentiality concerning our donors' contact and financial information. All donor transactions with ORGANIZATION are covered by this policy and are conducted over secure portals. Access to this data is password-protected and limited to authorized ORGANIZATION employees.

 

What we collect:

ORGANIZATION collects the following personal information from our donors: donor name, acknowledgement name, amount donated, address, telephone number, fax number, and email address.

 

How we use donor information:

Donor information is used for internal purposes only. ORGANIZATION does not sell or lease donor information. Donor information will only be used by ORGANIZATION’s staff to:

·         Distribute receipts for donations

·         Thank donors for their contribution

·         Inform donors about current and upcoming activities of ORGANIZATION, including additional opportunities to support ORGANIZATION

·         Track and analyze donor data

·         Comply with current rules and regulations governing 501(c)(3) financial reporting

·         Comply with any reporting requirements related to specific grants or contributions