Throughout this article, you’ll notice that we use the term “investor” in place of “donor.” This is because Convergent believes in reframing nonprofits as valuable community assets worthy of investment. When we position donors as investors, we shift the focus away from one-time gifts to sustainable funding.
While intuition provides valuable experiential insight when planning a fundraising event, it leaves an organization susceptible to cognitive bias. For that reason, the ideal approach is to back up your plan with data.
By transitioning from intuition-based outreach to a data-backed roadmap, your nonprofit gains a better understanding of your supporters, solves problems more effectively, and learns to maximize your resources, resulting in more effective fundraising campaigns.
In this guide, we’ll walk through how you can leverage internal audits and AI-driven research to build a data-backed fundraising plan that delivers sustainable growth.
Define fundraising objectives through strategic alignment
First, define what “success” looks like for your nonprofit beyond a specific dollar amount. Every financial target in your agenda should be tied to a specific outcome to ensure that the “ask” remains mission-centric.
For example, let’s say your healthcare organization plans to launch a comprehensive campaign, which consolidates multiple funding efforts to increase your nonprofit’s overall size, scope, and sustainability. Don’t just tell your supporters the overall amount you need. Instead, specify what your overarching goals are; what medical services are you planning to improve or add? Are you doing any scientific research? If so, let them know what for.
Remember: your investors want to make a difference, so show them the tangible ROI of their contribution.
To ensure strategic alignment, Convergent recommends conducting a feasibility study to gather insights from funders, stakeholders, and community leaders. This enables you to assess your organization’s readiness, identify possible challenges, and uncover untapped support.
Audit historical data to determine growth opportunities
Your nonprofit CRM is more than just a management platform—it’s also your most reliable predictor of future fundraising success. Auditing past campaign data helps you better understand your supporters’ behavior and identify growth opportunities.
When auditing historical data, focus on these tasks:
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Analyze investor retention rates over the last three years, and identify which supporter groups are growing and which are at risk of churning. Having answers to these questions will help you set realistic renewal goals for this year.
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Identify recently lapsed investors. These are individuals who have supported your programs in the past but haven’t contributed in the last 12 to 18 months. Analyze why they stopped giving to strategize better ways to bring them back.
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Look for “hidden gems,” or investors who don’t make major gifts but give consistently, indicating that they’re committed to your nonprofit’s cause. If many investors fall into this category, brainstorm the best ways to engage them. For example, send them a personal impact report showing how their past gifts have helped your nonprofit accomplish, encouraging them to continue or upgrade their investments in your next campaign.
In addition to the data in your CRM, you should also examine the data from your other tools. For example, if you’re operating a museum and you’re using payment kiosks to capture donations and merchandise sales, take a look at how much visitors tend to donate or what items are selling well.
Integrate AI-powered investor research
When it comes to investor research, move away from the traditional “wealth screening” approach and embrace AI-based research tools instead. This is because wealth screening is static and outdated; it only tells you who has money, but not who feels like they have money to spare. Meanwhile, AI-based investor research is dynamic, offering real-time, actionable insights.
You can use AI to:
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Automate the discovery of “hidden gems” in your database by providing specific benchmarks (e.g., less than $100 gifts, monthly contributions). You can also set “wealth event” alerts, such as when an individual makes a large property sale.
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Use “propensity to give” indicators to find potential investors based on their philanthropic history. For example, some supporters may regularly make small gifts or have their gifts matched by their employers, thereby doubling their contributions, while major investors donate a large amount once a year.
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Identify and target “lookalike” investors, or prospects who share the same characteristics as your top 10% of supporters. Targeting them helps you expand your audience and reach more potential investors.
Integrating AI tools not only enhances your investor research but also improves your CRM management, as these tools turn static or outdated records into living profiles that your nonprofit can act on.
Utilize investor segments for personalized engagement
Data is most valuable when it drives supporter outreach. Leverage the data you have to build investor segments and create personalized experiences. Bloomerang Fundraising recommends grouping your supporters into the following segments:
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Demographics (age, location, income, and family status): By grouping supporters by demographics, you can fine-tune your messaging or learn their preferred ways of supporting. For example, many Gen Z funders prefer contributing via a digital wallet, while Baby Boomers are most likely to send a check.
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Preferred communication channels (emails, social media, direct mail, and phone): Knowing what supporters prefer helps you reach them where they are most likely to respond. For example, if you’ve noticed that a good segment of your investors open their emails without fail, you should send your nonprofit updates via email newsletters.
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Lifecycle Stage (giving history, donation types, and donation amounts): Segment supporters by their existing relationships with your organization to customize your communications to highlight the impact they’ve had on your cause.
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Interests (sub-causes, specific projects, values): Community members have different reasons why they choose to support your nonprofit. As such, share updates on the initiatives and interests they care about, making your messages more relevant and engaging.
Having investor segments can also help you develop specific stewardship strategies. For example, if you just finished an auction event, and most of your donors prefer email as their main form of communication, you can send them a personalized thank-you email once the event concludes.
Establish metrics for sustainable fundraising success
A data-backed plan requires clear metrics to track progress and adjust strategies in real time. The most commonly used metrics to track fundraising success include:
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Investor retention rate measures how many investors continue to contribute to your nonprofit after making their first donation.
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Average gift size refers to how much your investors typically give to your cause. This metric can give insight into your investors’ capacity to give and conviction in your mission.
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Conversion rates for newly identified prospects measure the percentage of potential investors who contribute after hearing your nonprofit’s case for support. This metric shows how effective your case for support and other marketing strategies are.
We also recommend avoiding vanity metrics like raw pageviews and the number of social media followers. These metrics may make you feel good, but they don’t help you understand your nonprofit’s fundraising performance.
If you’re unsure which metrics are most important for your nonprofit to track, consider working with a fundraising consultant. These professionals have years of experience, enabling them to provide you with expert, objective advice.
Final thoughts: Building a sustainable engine for your nonprofit
A data-backed annual fundraising plan is about building a sustainable engine for your nonprofit’s mission. By combining the historical data from your CRM and the forward-looking power of AI investor research, your nonprofit can stop guessing and start growing.
Remember to use AI responsibly if you’re integrating it into your fundraising campaigns. AI should only supplement your operations, so you can focus on strategy and cultivating relationships with supporters. So, ensure that you keep humans at the heart of your fundraising campaigns and prioritize your investors’ security and privacy.