A Nonprofit’s Secret Weapon for Post-Pandemic Success? Data Co-op Membership

In the January 2021 CCS Philanthropic Climate Survey, 44% of nonprofits reported a decline in fundraising during 2020. However, 39% of survey respondents reported an increase in fundraising. Resilient as always, nonprofits have found creative ways to engage their donors with innovative virtual events and leaning into more digital fundraising. Many charitable organizations have continued to meet goals and 27% even expect an increase in fundraising in 2021.

Joining a data cooperative was a key strategical element nonprofits employed to drive more efficient fundraising efforts in 2020 and power an increase in fundraising in 2021.

Data Co-ops Drive Fundraising

Alliant’s nonprofit DataHub Membership grew by 38% last year. Not only did joining a data co-op like Alliant help nonprofits organize and consolidate their data, but it opened up access to a unique data asset and a team of data scientists to help fundraisers develop more predictive audiences for their campaigns.

Traditionally data co-ops were most impactful when it came to direct mail campaigns, today they are multichannel work horses. Direct mail is a powerful channel for fundraisers and continued to be during the pandemic with so many current and potential donors working from home. However, the pandemic also forced many nonprofits to pivot fundraising efforts previously rooted in events or in person attendance to that same audience online and socially. Data co-ops help them target new donors and re-engage lapsed donors across all of these channels.

Custom modeled solutions can improve response rates in fundraising campaigns by up to 30% in direct mail and in digital targeting fundraisers have seen up to 200% improvement in conversion rate. Smarter marketing powered by a data cooperative can also help save costs, with some marketers seeing up to a 20% reduction in cost per dollar raised.

Specialized Nonprofit Co-ops

While some data co-ops are designed exclusively for charitable organization membership, nonprofits will also benefit from joining a more general direct-to-consumer co-op. These co-ops capture a wider array of behaviors and purchase transactions, many of which serve as strong predictors of likelihood to donate, donation amount and frequency.

The billions of transactions in the Alliant DataHub are exceptionally predictive for nonprofit fundraisers, but they alone are not going to translate into actionable next steps. Developing an analytics program, particularly with data scientists who thoroughly understand the nonprofit vertical, will help structure the data so that it is most impactful, isolating the right variables and building stronger models.

As nonprofit Membership in the Alliant DataHub has grown, the data science team is continuously expanding the set of nonprofit-specific variables and nonprofit on-demand models. New variables combine recency of contribution with size of donations across different time periods and interest areas such as education, environment, health, humanitarian, religious, museums and more. For example, when building a model for a health-related nonprofit, an Alliant data scientist found a positive predictor in prospects who had a higher number of donations in the last year to religious charities. Those who donate to one cause, even if unrelated, may be quality prospects for other causes.

Custom lookalike or optimization models can be combined with nonprofit specific on-demand models to evaluate donors with behavior such as $500+ in total donations across all charities or an average donation amount under $50. Models like this help to refine or expand audiences according to the campaign goal.

Two or Three Co-ops are Better Than One

Many fundraisers have already uncovered the superpowers of being a data co-op member. Recent research on collaborative data solutions by the Winterberry Group identified that best way to maximize the value of data co-op membership was to participate in at least two or three co-ops. Each co-op offers a slightly different approach to data management, analytics and audience creation. You can expand your reach and results through multiple co-op memberships.

Interested in testing the Alliant DataHub and exploring Membership? Reach out today to our team of nonprofit data experts today!