How Are Nonprofits Using Business Intelligence?

Is your nonprofit ready for the donor data revolution?

We’ve all heard how important “big data” is to improving the reach, accuracy, and effectiveness of marketing outreach and sales efforts. Business intelligence (BI) is the next generation of comprehensive data analysis that is transforming the way businesses and nonprofits operate.

According to Wikipedia, business intelligence (BI) is “the transformation of raw data into meaningful and useful information for business analysis purposes. BI can handle enormous amounts of data to help identify, develop and otherwise create new strategic business opportunities. BI allows for the easy interpretation of volumes of data.”

So how should nonprofits define business intelligence?

As the single most important tool in their fundraising toolbox.

StratusLIVE’s BI solution allows nonprofits to stop relying on their “gut instincts” to make major strategic, operational, and tactical decisions. Instead, BI leverages their existing constituent relationship management (CRM) database to form a clearer, more comprehensive picture.

By eliminating the information silos which had previously blocked the free flow of constituent data from one department to another, a more comprehensive view of donor data management begins to emerge.

But how are these strategies actually being implemented? Here’s how our large nonprofit clients are using business intelligence to boost their fundraising:

1. KPI analysis

All nonprofits should already have in place a range of key performance indicators (KPIs) which allow them to monitor progress, set goals, and measure results. These simple measurements can become much more powerful drivers when combined with the power of business intelligence.

For example, most nonprofits measure the age-old standard known as RFM — recency, frequency, monetary value. Business intelligence takes this data and turns it into actionable intelligence. This means that the type of information that is analyzed through BI can lead to the steps necessary to not only improve those KPI figures, but develop new metrics for measuring performance success.

These new metrics can include motivational interest (what drives a constituent to make a donation), communications preferences (how and where a constituent prefers to be contacted by the nonprofit), and method of donation (payroll deduction, online donation, pledge card, etc.)

BI is able to take existing short-term RFM behavioral data — for example, how recently Donor X contributed a sum over $100 compared to how often he or she donates $100+ to an organization — and quickly analyze multiple layers of millions of data points over a greatly reduced period of time.

In doing so, nonprofits can now look at the bigger picture, answering not only, “Who are my biggest donors?” and “Who are my most frequent donors?” but also, “Who is most likely to increase their gift?” and “Who has not donated for a while but may be on the verge of doing so once more?”

2. Resource allocation

Aligning your business intelligence strategy with your nonprofit’s mission is absolutely critical to the success of your organization. Whatever your nonprofit has decided to devote its time and resources to, BI will prove to be a tremendous asset.

Start with your strategic imperatives: what will your nonprofit be focusing on in the coming months or years? Is the focus shifting? Narrowing? Serving a broader range of recipients? Aligning with the economy? Matching demographic trends in giving?

Once your data is in place and you are able to take a comprehensive look at how your current performance aligns with your future goals, you will be able to make key decisions regarding how and where your nonprofit will allocate valuable resources in order to best serve your constituents, your board, and the community at large.

Which brings me to the last step(s)…

3. Applications

Now that you know what to do… go do it! Here are some areas where business intelligence will prove invaluable as you move forward with your strategic initiatives.

Budgeting – Now that BI has introduced you to a world where you are no longer required to take a “stab in the dark” as to where your nonprofit’s time and money should be spent, you can use cold, hard data to drive results-based budgeting.

Knowledge management – Don’t just be the best nonprofit in your industry. Become the best nonprofit in the entire market. The insights you gain from business intelligence will help you and your nonprofit become associated with thought leadership. Share your knowledge and help other nonprofits achieve their aims as well.

Constituent relationships – Getting back to the heart of your mission,business intelligence also helps accelerate what drives your nonprofit. Reach more recipients, provide more care, address more needs, and confirm that your nonprofit is on the right track by conducting outcomes analysis and ensuring constituent satisfaction.

Fundraising – Finally, the raison d’être of your nonprofit. Fundraising. Using predictive analysis and real-time BI dashboards reporting, your nonprofit can position its messaging to reach more donors and increase volume and per capita donations.

These are just a few of the many applications to which business intelligence can be successfully applied. Can you think of more ways your nonprofit could leverage BI? Tell us in the comments!

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