4 Ways Data and Analytics Can Help Nonprofits Achieve Positive ROI | npENGAGE

4 Ways Data and Analytics Can Help Nonprofits Achieve Positive ROI

By on Apr 10, 2017


Nonprofit Data and Analytics

My recent paper, Remarkably Outstanding Implementation: The Foundation for Positive ROI with Target Analytics, is now available. As I prepared and wrote this paper, several thoughts occurred to me about the importance of measuring ROI for nonprofit analytics projects that I thought I would highlight for you in this post.

It is appropriate to expect positive ROI from data analytics, but remember that expectations must be fueled by actions! One of the core reasons I love data analytics in the world of fundraising is that it can drive us to achieve positive ROI and help us to determine an appropriate return on investment for our organization. It can lead us to donors and prospects with the best giving potential, and lead us away from efforts solely justified by “the way we’ve always done it.” And that will create positive ROI!

Here are 4 key ways data and analytics can help your organization achieve positive ROI:

1. Measure the success of your investments

The concept of return on investment (ROI) for analytics is on the mind of the staff of most nonprofits, college and universities today, and rightfully so. Although many institutions now routinely budget for analytics, it still constitutes a financial commitment of limited budget resources.  It is a wise investment with potentially strong ROI, particularly if the budgetary resources are backed by an equally strong promise for implementation.  One without the other introduces ‘luck’ into the ROI equation. As we all know, Lady Luck is fickle and if we rely on her we jeopardize future support of analytics projects.

2. Understand what’s working vs. what’s not

The results of analytic projects show organizations what they are doing well and identify programs in need of improvement.  The desire to improve indicates that change is necessary, and organizations that use analytics to thoughtfully inform and embrace change greatly enhance the potential for positive ROI.  So change is inevitably at the heart of strong ROI, and organizations that understand that from the beginning fare much better than those that battle change throughout the implementation process.

3. Identify short and long-term opportunities

  • Annual giving, mid-level or membership activities usually afford an opportunity to implement changes in a period immediately following the receipt of results. Your ability to do this is enhanced through pre-planning activities that include such things as building awareness of the application of scores into existing solicitation and stewardship activities and timing of the delivery of scores to ensure implementation in a timely fashion.
  • Principal and major giving, as well as planned giving, benefit from the aforementioned strategies but carry with them a different set of expectations. It is necessary to be cognizant of the time it takes to develop relationships necessary for significant or ultimate giving. Organizations that accept this concept also believe that there is no time like the present to begin the process of relationship building, and in so doing increase the likelihood that game-changing giving are in the future. As you know, only on major gift offers the potential of creating a positive ROI for your analytics project.

4. Focus on top-rated prospects

Do not undervalue the opportunity that analytics introduce to be smarter with your budgetary resources. Predictive analytics and strategic data appends not only identify the donors and prospects with greater potential; additionally, through a comprehensive picture of your entire database, you now know those individuals or households unlikely to support your mission going forward. With this knowledge, you may concentrate your best strategies and limited resources on top-rated prospects and reduce or eliminate your efforts to engage prospects with lower affinity to your mission.  This would be on my priority implementation list if I were in your position.

Finally, for the rest of the story, I encourage you to read Remarkably Outstanding Implementation: The Foundation for Positive ROI with Target Analytics, I greatly appreciate and welcome feedback, so I would love to hear from you. My next paper, which I will begin this week, will be an update of a previous paper on planned giving characteristics.  Later this year I hope to revisit the topic of mid-level giving with fresh observations and implementation strategies for your consideration. Stay tuned and please get in touch or comment below with any questions.


Lawrence has worked in the nonprofit sector for 38+ years, with the first 13 years focusing  on development and marketing positions in the not-for-profit sector, primarily in higher education. Since 1993, Henze has worked in the field of data and predictive analytics, creating analytics services and related consulting on behalf of organizations in the United States and Canada. He has co-founded Econometrics and founded Core Data Services. Lawrence is a frequent presenter at nonprofit conferences across the United States and Canada, covering subjects that include annual, major and planned giving, relationship management and predictive analytics.

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