CoolData blog

28 March 2010

Get data-focused, or else?

Filed under: skeptics, Why predictive modeling? — kevinmacdonell @ 9:34 pm

I can see a day when data mining will no longer be optional. It will be something all nonprofits have to do – standard practice, part of our responsibility to donors and to the causes they support.

Promoting the smart use of data in fundraising faces some barriers in skills and priorities and culture, but sooner or later all nonprofits will have to work harder at leveraging the power in their databases. They might do it in-house or find the expertise elsewhere. But it will be the norm.

Later this morning I’ll be speaking to a room of fundraising professionals about data mining. A few in the room will have had some experience with data mining. Some won’t. And some more will have a database that is in such rough shape that they’re not ready for it.

I’ll be keeping the tone light, and I’ll focus on what’s happening (or not happening) in my own workplace. I won’t presume to tell any of the hard-working people in the room what they ought to be doing. I won’t say that organizations that fail to make quality data collection and analysis a priority are guilty of negligence.

But I might think it.

If you don’t have a process in place to determine that a gift received this year came from someone who was also a donor last year (that is, you allow duplicate donor records to proliferate), you’re disconnected from who your real supporters are, and you’re wasting money. If you conduct surveys but do it anonymously, you’re throwing away the possibility of insight, and wasting money. If you host events but fail to track attendance in your database, you’re choosing to remain in the dark about where tomorrow’s gifts will come from, and you’re wasting money. If you segment prospect pools based solely on past giving, you exhaust existing best donors without breaking any new ground, and your unfocused approach wastes money.

Whose money? Donors’ money. Wasting donor dollars is no longer acceptable. I think donors will only get better at figuring out which charities are allowing fundraising costs to get out of control, which ones are diverting too much cash from their stated goals.

Nope, I won’t say it, but I might think it: Nonprofits that do not learn to use data will have data used against them.

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