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The Power of Big Data: Why the Numbers Matter

BigData_11092014

By Jessica Sochol, Digital Content Strategist, Relationship Science

Any seasoned nonprofit fundraiser knows that recruiting and developing donor relationships requires a mix of hard and soft skills. Traditionally, the emphasis is on the soft: articulating the cause, recruiting supporters, inspiring passion and building relationships. As data about donors and marketing analytics becomes more plentiful, more minutely examined and more widely accessible, it’s no surprise that organizations are now also appreciating the importance of numbers in addition to handshakes when finding ways to increase their impact.

The Big Data revolution has resulted in the creation of a zettabyte (that’s a one followed by 24 zeros) of new data in the past two years. Big Data analytics has solved thousands of problems for individuals and organizations around the world—from improving bus transportation in Dublin to helping you pick out what to watch on Netflix. But the sheer glut of information has its own messy challenge: how to sort out the junk from the useful, the interesting from the important. With every donor and prospect relationship, there are a multitude of parties involved: prospect researchers, leaders and your existing database or CRM. You need a 360-degree view of all the information accompanying each of your prospects—a way to track all of your interactions in one centralized place—every internal strategy decision, personalized touch-point, mailing, gift receipt, event attended.

Many nonprofits have been using deeper, more sophisticated methods to analyze donor capacity and fundraising strategy, but the best technology out there has still been more costly than most nonprofits are willing to invest. Now, new metrics from more cost-effective tools are poised to change the fundraising landscape for all. Organizations committed to strategies that efficiently employ the right data (small, medium and large) will lead the next generation of philanthropic fundraising.

So, how can these new methods in big data help you?

A smarter database

I recently had the chance to talk with the chief development officer of a major U.S. university about their approach to understanding their database. One challenge she spoke of is the volume of prospects they must examine in order to yield a significant number of prospective donors. The sheer numbers involved means her team only has time to take a high level look at each person’s background. They sometimes overlook crucial details that could indicate a potentially strong donor. Even with wealth screening tools, they uncover just “20 to 40 percent of a person’s wealth”, requiring extra research to get into the weeds and better understand the data through more comprehensive analysis and investigation.

Her team needed quick snapshots that could clue them in to where to dig
deeper—like a spider web of information to help prioritize quickly. Fortunately, new tools from major tech companies, boutique firms and open source platforms all make it easier and cheaper to run data-driven organizations, regardless of budget. The goal of each platform is to combine and integrate data in smart ways to more accurately and easily answer, ‘Who in your database has both the wealth (capacity) to fund your initiatives and the inclination (likelihood, desire, affinity) to do so?’

For example, what if you could discover which board member candidates have proven records as prolific referral sources? Or, what if you could easily learn how prospective donors spend their time; causes they are or have been affiliated with; events they’ve attended; and recent press—all in the same source that stores relationship information and donation history? It all adds up to a more holistic, data-driven donor profile. As the Wall Street Journal writes, “Apps that are constantly pulling data from ongoing evaluations, common performance measures and beneficiary feedback will make this happen.” The next step is integration with the donor databases organizations already use so that one platform can deliver this complete picture.

2. The benefits of scale

Big data inherently operates within larger scales than we’re used to by pulling in a larger quantity and variety of information. This means reaching statistical significance—the point at which you can reasonably conclude whether a tested variable does or does not work—happens a lot more quickly. Whether your organization is focused on new email campaigns, website calls-to-action or current donor relations, big data metrics can help you understand and adapt at much faster rates. By creating more context around your donors, you may discover missed opportunities for improvement. Big data also enables donor-centric processes like accelerated feedback loops, comprehensive profiles and data mining, which can help organizations streamline and enhance their audience interactions.

While it may seem trivial to spend resources optimizing the minutiae of stakeholder experiences, consider it a cheap investment. With just one experience improved, you may pull in one new donation. Multiply that by all of the contacts in your database across your various touchpoints and you’ve got a scalable model with opportunities to build in testing and optimization.

3. The need for transparency

Plenty of nonprofits are open to leveraging data, but are unsure how to get started. It’s exactly what makes big data so powerful that makes it so challenging: the sheer quantity and variety. The Stanford Social Innovation Review wrote about this recently:

Organizations have built information systems to tackle data elements in specific categories. The challenge for many organizations is to find economical ways of integrating heterogeneous datasets while allowing for newer sources of data (in origin and type) to be integrated within existing systems.

Fortunately, the current trends towards partnerships and cross-sector initiatives can save such organizations. For example, the Robert Wood Johnson Foundation has partnered with various corporations to fight obesity and other public health epidemics in order to achieve a national “Culture of Health.” The Foundation has acknowledged that they “need to understand how for-profits can be part of the solution in many social problems…We must also connect our actions to those of others, forming partnerships with a variety of organizations in all sectors—particularly in the corporate sector, [that] can act as powerful scalers of nonprofit models.” Partnering with other organizations lessens the need for new infrastructure and data systems, allowing an organization to leverage big data without significant investment.

One positive side effect of collaboration is transparency. When working with other organizations, data must be easily accessible and universally readable. This not only improves its utility but also helps nonprofits to speak the language of its donors. Increasingly, donors are asking for data in exchange for support. Nonprofits that are fluent in big data improve their relationships with donors while they further their mission.

Getting your priorities in order

Ultimately, big data can help organizations make better, quicker decisions. Data can change your understanding of your own database, improve the touchpoints you have with stakeholders, and help you scale your impact. At the most basic level, though, what you’re really getting is a more accurate starting point when allocating resources and prioritizing need. With a better understanding of donor trends and experience, an organization can decide what types of people make the best supporters, how to structure fundraising campaigns, and which growth opportunities should be pursued.

Big data is multi-dimensional and the process of leveraging it can be thorny at first, but its potential for nonprofits cannot be underestimated. The problems we are solving today are complex and fluid, and their solutions may not be obvious at first. However, viewing data in context and in real time can fundamentally change how organizations achieve their goals.

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