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Why nonprofits need clean data
Toward the end of the year, nonprofit organizations make a big push to ensure their fundraising events are as successful as possible. According to Business 2 Community, some charitable groups can expect to generate roughly 80 percent of their annual contributions during the same time of year that commercial enterprises are offering consumers door-buster promotions. With this sizable chunk of revenue at stake, there's little room for error for nonprofits in developing and delivering their fundraising campaigns. Mistakes are increasingly significant in an era when data plays a bigger role within both the for-profit and nonprofit worlds.
"It's estimated that dirty data causes $3.1 trillion in damage to the U.S. economy on a yearly basis."
Data makes the world go around - except when it's dirty
Philanthropic organizations are increasingly dependent on data. Donors, like consumers, provide significant amounts of information when they decide to contribute to a nonprofit or charity. As with most transactions, these organizations need to collect contact data, such as names, both billing and shipping addresses, email addresses and phone numbers. Depending on the fundraising software a nonprofit has - if any at all - this information can be entered incorrectly, include fraudulent data or become obsolete quickly. The end result is a donor database filled with duplications, inaccuracies and overall dirty data. This can be expensive for organizations hoping to take advantage of donor data for future campaigns and to better segment their audience.
According to Destination CRM, low-quality data can cost organizations more than $14 million annually on average, depending on the size of the enterprise. Expanded further, it's estimated that dirty data causes $3.1 trillion in damage to the U.S. economy on a yearly basis.
The fact remains that contact information can be very fluid. Citing data from Sales & Marketing Institute and Dun & Bradstreet, the marketing news source indicated that 75 phone numbers change and 20 business addresses are altered every 30 minutes. If a nonprofit is trying to make timely appeals to individuals whose contact information may have changed, that's money going down the drain because the direct mail piece will be sent to the wrong address, the phone call will be met with a disconnection notice and email reminders will bounce back as undeliverable. These situations represent wasted time and resources. More importantly, the people who are most likely going to respond to fundraising appeals won't know they're being asked for help.
Data validation and verification helps clean up data
Nonprofits that hope to earn the highest response rates to their fundraising messages, regardless of channel, need to have the right tools to validate, verify and correct contact information. This is especially necessary for direct mail campaigns. Accordingly, address verification software is a crucial investment to assist nonprofits in making certain donor information captured through Web forms and other channels enters a central database correctly the moment it's collected. Regardless of whether an individual makes spelling mistakes or incorrectly enters a ZIP code, an address verification solution ensures data accuracy.
From this point, nonprofits can more effectively develop segmented fundraising campaigns that are personalized for unique donor groups. Nielsen explained that even age, location gender and income can be powerful data points that help nonprofits segment their contributors and adjust communications strategies effectively. By analyzing its donor base, Minnesota-based nonprofit The Food Group was able to get a better idea of how to target different segments. Since 53 percent of the money the nonprofit earns are financial contributions, largely from individual donors, it needed at better way to organize its fundraising campaigns. The Food Group first segmented donors by the amount they give and their geographic location. In doing so, the organization was able to improve its direct mail strategy.
While data is critical to many organizations, it needs to be thoroughly cleansed to make the most of it.
