We all love good news. And with fundraising, we all love good data. Data that makes the organization look good. Data that makes our work and contributions look good. Data that impresses the board, delights donors, and validates our existence.
But more often than not, fundraising data is complicated. Usually, it tells several stories, and not all of them have happy endings. Part of fundraising data ethics is to be honest about your data, and not hide the bad news while over-emphasizing the good.
Why Better Data Is So Alluring
It’s very hard to consistently adhere to proper ethics when it comes to telling the stories contained within your fundraising data. It’s not as much dishonesty as it is the natural tendency most humans have to want to believe things will get better, and that it’s already happening.
So, we don’t lie about our data overtly. We don’t call it a pig when it’s a horse. But it’s easy to talk about how fast the horse is and ignore the fact it has a stomach virus.
Positive reinforcement also motivates ethical lapses in fundraising data storytelling. It feels good to deliver good news. Everyone likes it. They get excited. They thank you for sharing. Hardly anyone gets thanked for sharing bad news. And even when you do get thanked, it comes with that stern, grim-faced acknowledgement that ‘we needed to hear this.’
No one likes being the bearer of bad news.
The Lies We Tell about Our Fundraising Data
So, instead of telling the full and accurate story of an organization’s reality, we often default to half truths and rosy pictures. Here are a few examples of how this might look.
You have high expenses, but you also made more revenue this year. So, you talk about the higher revenue, and downplay talking about ways to save money. Or, maybe your expenses came in very low this year, but your response rates were also weak. So, you dwell on how much money you saved, and avoid looking for ways to improve response – even if it means higher expenses.
Maybe you ran four big campaigns last year, and two of them produced great results. Guess which two will get the majority of air-time at the next board meeting?
The bottom line is, we pick and choose the best parts of our fundraising data to highlight, and we downplay the less rosy parts as ‘something to work on.’
None of this ultimately serves anyone well.
Storytelling and Fundraising Data Ethics to Agree on
What is the reality? What fundraising data matters the most, and how is your organization performing on those metrics? How does it compare to the last three years?
This is what you need to focus on, consistently and predictably. Don’t move the goalposts every year based on what looks good. Talk about the same metrics every year, which ones are doing well, and which ones aren’t. Compare this year to last year and the year before. And talk about he right metrics, not just personal favorites.
Yes, there are ‘right’ metrics. We’ll look at some of the best ones in a moment.
But the key here is, your board and your organization need to agree that this is the best way to move forward. You must make a commitment to focusing on the most valuable and insightful fundraising data points. That way, you can’t help but be honest and ethical. There is no way to paint a rosy picture of the data when you look at the same data every year.
And once you start doing this, your conversations will shift to ways of improving your most consequential fundraising metrics. You can talk about what’s really working, because it’s showing up in the data. And you can talk about what’s getting missed.
Fundraising Storytelling Questions You Should Be Asking
Here are a few examples of the types of questions that should be regular topics of discussion at your organization.
And, you can calculate all of the data you’ll need to answer them and prepare dynamic visuals using the Fundraising Report Card, saving yourself tons of time and making it easy for everyone to understand what’s happening with your most important data points.
“How many new donors got acquired?”
Donor acquisition speaks to the future of your organization. When you stop acquiring new donors, you begin to lose your best source of future major donors, which are the lifeblood of most nonprofits.
You can compare the numbers of newly acquired donors each year, and you can also look at which giving levels the newly acquired donors occupy. If most are in the under $100 level, for most organizations this speaks to a relatively minor long-term impact, unless you have a lot of them. But if the new donors are spread out among your higher giving levels too, that’s a good indication you are attracting future major donors as well as recurring donors.
“How many lapsed?”
Just as important as new donors are the number who stopped giving. Now, this can refer to one-time donors as well as repeat donors who gave many times but then gave nothing last year. Both groups are important, but it’s the ones who were giving faithfully but now stopped that you definitely want to work at re-engaging.
Lapsed donors indicate several possible problems you might be able to work on:
- Donors feel ignored and unheard
- Donors have lost emotional connection with your mission
- Donors dislike something you did or said
- The financial situation has changed for some donors
- Donors have moved away or died – severing the connection
There are numerous other possible reasons why a donor might stop giving. But of the ones listed above, all but the last one can be mended with some personalized outreach. Find out why they stopped giving, and see if you can motivate them to start again.
“How many lapsed ones got reactivated?”
If you have a deliberate strategy for re-engaging lapsed donors, how well is it working?
Monitoring your reactivated donors will tell you. This would mean a donor gave before, didn’t give for at least one year, and has now given again. What changed?
If you didn’t do any personalized outreach but the donor is on your email or mailing list, it could just be as simple as staying in touch with them. For whatever reason, they didn’t give last year, but they are still motivated to be part of your mission. If this is happening regularly for a large enough percentage of lapsed donors, that’s a good reason to keep using your ongoing donor communication.
If you’re doing personal outreach to lapsed donors, monitoring this metric will give you a good indication of if those efforts are paying off.
“What’s our donor churn?”
How many donors are you losing each year, and how many are you gaining?
Your churn rate combines your newly acquired donors with your lapsed ones. If you’re gaining more than you’re losing each year, that’s a positive churn rate. It doesn’t mean you can just sit back and bask in endless fundraising growth, but it at least means your acquisition efforts are paying off well.
The questions to discuss in that scenario would be:
- What can we do to increase our donor acquisition efforts even more?
- How can we reduce our lapsed donors?
Succeeding in either one or both of these endeavors will result in an even better churn rate.
“Did our revenue increase or decrease?”
The term we at the Fundraising Report Card use for this question is donation retention rate. You brought in a certain amount of revenue last year. If you bring in more this year, that’s a donation retention rate of over 100%.
Increasing revenue, especially if it’s happening year after year, is a strong indication that you’re on solid footing. If it’s going up and down with no consistent growth or decline, that suggests you may be subject to certain extremes like singular major donors, economic headwinds, or particular fundraising efforts such as live events.
“Which giving level was the primary cause?”
This question is a great follow-up to the last one.
If your revenue increased, which giving level increased the most in terms of actual revenue? The Fundraising Report Card reports your data broken down into five giving levels:
- Under $100
- $100 to $250
- $250 to $1000
- $1000 to $5000
- Over $5000
You can see how valuable this will be for this question.
Suppose your revenue went up, and the greatest increase occurred in the $250 to $1000 range. Many more donors this year gave at this giving level. That’s a great thing to know! That means you can reach out to these donors personally and work on sustaining them at this higher giving level, which you know is new for many of them.
Or, maybe your donation retention rate held steady overall, but your donors in the over $5000 range went up while you lost revenue in the $1000 to $5000 range. This could mean several donors in the fourth level simple upgraded and increased their giving. But if your overall giving remained unchanged, it also means you lost more donors than you gained. This means you probably lost a few higher value donors, and should look at your lapsed donor data to find out more.
Tell Accurate Stories about Your Fundraising Data
Do you see how valuable this information is when you can ask and answer questions like these?
You’ll be done with half-painted pictures and trying to hide the bad news by amping up the details of one particular campaign. Look at the same fundraising metrics every year, and you’ll see what’s working, and what’s not.
If several long-term major donors lapsed, that’s a big problem, and you can’t avoid it or hide from it just because your email open rate ticked up from 18 to 23%.
Use the Fundraising Report Card to tell accurate and useful stories about your data.