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Blog

5 risks of not having a data strategy for your charity

By Wood for Trees | 18 Oct 2023

Every charity deals with data, and more and more charities are collecting data. However, data collection alone isn’t enough.

It’s one thing to have data, but knowing how to use it to improve decision-making, reach out to new audiences, raise funds, and improve efficiency is the secret to success.

As more and more data is captured, it’s essential that charities can sift through the noise and use charity data analysis to service true value. And without a doubt, the best way to do that is by having a data strategy.

It’s no wonder, then, that businesses using data-driven strategies report five times more ROI than those that don’t.

However, more than two-thirds of organisations still don’t have a data strategy in place, and with IDC forecasting that data volumes will almost double in size from 2022 to 2026, it’s never been more important to get to grips with your data.

Like it or lump it, data is here to stay, and not having a data strategy in place for your charity could end up costing you. Here’s why:

5 risks of not having a data strategy

1. You won’t be able to truly understand your supporters

How well do you really know your donors? Who is currently engaging with your charity? And who should your ideal supporter be?

Sure, you might have a pretty good idea, and you might even have thousands of supporters on your CRM, but if you’re going to boost supporter engagement, maximise loyalty, and ultimately increase fundraising ROI, you need to understand your donors and what makes them tick.

Using your data enables you to go one step further and access key information and data points to ensure you understand supporter demographics.

By dividing your donors into segments and identifying what motivates them, you can uncover trends and pinpoint their wants and needs. Without a data strategy, you won’t be able to access the insights you need to know who your supporters are, how they support you, and how to connect with them.

2. You won’t know where to reach your supporters

Having a data strategy doesn’t just help you get to know your audience, though. By utilising your data, you can also understand the habits of your supporters so you can target them effectively.

With so many different channels available for marketing today, it can be difficult to find the right ones to reach your audience.

For example, do your donors respond to email communications? Or do they prefer print? Is there a social media platform they use the most, and if so, when are they likely to log on?

Gathering information on when, where, and how supporters use different mediums can help charities to develop targeted marketing and social media strategies to ensure they are talking to their supporters via the right channels.

So, instead of sending messages in the dark without a plan in place, a thorough data strategy will provide you with the tools you need to fine tune your communications and ensure your messaging is seen.

3. Your data might be biased

Of course, all this is very well and good, but if your data is biased and not telling a complete story, your efforts are going to be wasted.

From confirmation bias and selection bias to average bias, bias is everywhere, and occurs when some of the data you collect or use is more heavily weighted or represented than it should be, meaning that your data is unrepresentative of how things really are.

If you are using biased data to make your decisions, your results aren’t going to be as good as they could be. In fact, data bias could even be the difference between a highly successful fundraising campaign and one which results in losses.

How can you prevent data bias? You guessed it – by implementing a strategy that ensures your data is regularly cleansed, audited, and monitored, so you can ensure you are using the best quality data possible.

4. Your fundraising campaigns will fall flat

Another reason why data strategy is essential is that it enables charities to create targeted, personalised, donor-centric fundraising and marketing campaigns that engage with their supporters.

It’s never been more important to get personal. A study by Salesforce found that personalised emails improve click-through rates by 29% and lead to a 41% increase in email revenue, whilst 71% of people today expect brands to provide personalised interactions.

When you leverage your data properly, you can personalise your communications, keep your supporters engaged, and achieve better results.

5. You won’t know what’s working and what isn’t

Finally, a data strategy enables you to monitor what you have done well and the areas where there is room for improvement.

Utilising metrics such as donor retention and donor acquisition rates, for example, allows you to see which campaigns have worked and why, whereas broader analysis can help you scope out larger trends to inform future decisions.

Big planning decisions become easier when you can rely on what your data is telling you – and without a coherent data strategy, you simply won’t be able to cut through the noise and understand the key patterns needed to improve your fundraising efficiency and effectiveness in the future.

Need help nailing your data strategy?

A strong data strategy means that your charity can make better decisions based on facts and has the potential to take your fundraising to new heights.

Have you ever wanted to branch into a different income stream, become more supporter-centric, or trial a new fundraising approach, but didn’t have the data to back up your ideas and inform your decisions?

The truth is that without a data strategy, you won’t be able to access the information and unlock the insights you need to make measured decisions.

But help is at hand. If you are struggling to make sense of your data and currently can’t see the wood for the trees, our expert team is on hand to help you create a powerful data strategy that works for you.

Contact our expert team today to learn more about how our charity data analysis solutions can help you.

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