Using Data to Boost Your Fund-Raising Performance

Tuesday, July 28, at 12 noon, U.S. Eastern time

Isaac D. Castillo is the director of learning and evaluation at the Latin American Youth Center, in Washington, where he oversees the organization's performance management, research, and evaluation efforts. Previously, Mr. Castillo worked at a private research and evaluation firm, and he worked on an evaluation program sponsored by the federal Office of Juvenile Justice and Delinquency Prevention that was designed to measure the effectiveness of school and community violence-prevention programs.

Andrew Niklaus is the chief operating officer of First Place for Youth, an Oakland, Calif., organization that helps young people who are making the transition from foster care to independent living. Previously, Mr. Niklaus was the director of education and employment services at Larkin Street Youth Services, a San Francisco group that helps homeless and runaway youths. He also served as employment-development coordinator and manager of workforce development at Larkin.

A transcript of the chat follows.

Maria Di Mento (Moderator):
    Hello, and welcome to The Chronicle of Philanthropy’s Online Discussion series. Today we’ll be exploring the best ways fund raisers and other nonprofit leaders can use data and other research tools to identify potential donors and make strategic decisions about their fund-raising campaigns.

Maria Di Mento (Moderator):
    Joining us today are Isaac D. Castillo, director of learning and evaluation at the Latin American Youth Center, in Washington; and Andrew Niklaus, chief operating officer of First Place for Youth, in Oakland, Calif.

Maria Di Mento (Moderator):
    Both Isaac and Andrew have extensive experience using data to show donors the value an organization provides to those it serves, and to maintain and attract funding from grant makers and private donors alike.

Maria Di Mento (Moderator):
    They will be available for the next hour to take your questions.

Maria Di Mento (Moderator):
    Before we begin, I'd like to issue a couple of reminders. First, you are invited at any time during the discussion to ask questions or post comments on what you are reading. To do that, simply click on the “ask a question” link on this page and type your question or comment. And as always, we will be offering a full transcript of this event after it is complete at http://philanthropy.com/live.

Maria Di Mento (Moderator):
    Okay, let’s get started.

Question from Christine -- Development Operations:
    What are the 5 most important data elements to be capturing on your donors?

Andrew Niklaus:
    It is important to dictate what you feel is critical to track as outcomes - these should not be dictated by donors whenever possible.

First Place has three major outcomes, and I would recommend not going above three. we have: education, employment and housing.

Question from Megan Marshall -- Dry Earth Project Coordinator:
    What is the best way to research if you are working for a small start-up nonprofit group and don’t have the resources for some of the tools available to larger institutions?

Andrew Niklaus:
    I am not sure if you mean research in the evaluation sense, or research from in house needs to define best practices. If you are very small the former may be premature. The latter falls to the program director or whomever is in charge of this department. First Place was very small (less than 20 folks) when we started down the path for performance management. This is a larger discussion. You can contact me at aniklaus@firstplaceforyouth.org for a larger chat or try posting again here. I Look forward to it.

Question from Sandeep Deshmukh:
    Which research tools and what kind of data would be appropriate for fund raising in rural communities?

Isaac D. Castillo:
    This very much depends on the type of programming and services offered. Different research and evaluation tools are appropriate for employment programs, as compared to education programs. It really is the content of the service / program that should drive the research tools.

Maria Di Mento (Moderator):
    We had a few technical problems at the beginning of the discussion, but we think we have them all worked out. We apologize for the inconvenience.

Question from Beth, homeless shelter:
    We try to track only the client/program information we feel is really useful or necessary. But with limited resources, and staff who prefer working with people over technology, how do we get consistent and accurate data? I find the information entered is accurate when it goes in, but some questions are left blank and/or never updated.

Andrew Niklaus:
    You must change the culture of your organization. Technology and working with people are not mutually exclusive. Blank questions, and incomplete data suggests your staff are not bought into the power of data and how it can make them better and more impactful in their work. This is a great topic and i would love to engage more on this - critical to solid performance management

Question from Kamilah Henderson, small nonprofit:
    What is the most critical data we need to collect before determining membership levels for both organizations and individuals?

Andrew Niklaus:
    I am unsure about what you mean when you say membership levels. With that said, the most critical data you need to collect can only be determined by rigorous theory of change work. Your organization alone is able to determine what the intervention should be, and what dosage of that intervention is necessary to move the needle with your target population. Theory of change will do this for you.

Question from Barbara Pierce - SF Development Consultant:
    In your experience, who is the best person to do research at a nonprofit that doesn’t have a dedicated researcher—the fundraisers or a development associate?

Isaac D. Castillo:
    It depends on what you define as 'research'. If you are simply trying to determine which components of your program are effective, then I think that the person in charge of the programming should lead the outcomes measurement.

Fundraisers, grant writers, and development people (with some exceptions) likely will not have the programmatic experience (or the day to day interaction) to do outcome measurement effectively. It really needs to be led by someone who is familiar with the programming.

And yes, I recognize that is 'one more thing' for the program staff to do - but ultimately they are the ones who can return the most accurate and useful data if they lead the outcomes measurement charge at their organization.

Question from Ingvild Bjornvold, Social Solutions:
    What type of performance data can organizations who do not yet have data about outcomes use when they are making a case to funders?

Isaac D. Castillo:
    This very much depends on the types of activities and services they offer.

At a minimum, organizations should have good demographic data on who they serve. Broken down by ages, zip codes, race/ethnicity and any other relevant classifications.

Then, organizations should try to present 'dosage' infromation. In other words, how much of a service do participnats recieve? The organization provides 5000 hours of tutoring per year. Or, on average, each particiapnt gets 50 hours of case management.

When possible, you should also make comparisons or reference research when you don't have your outcomes yet. For example, the organization provides 60 hours of afterschool tutoring to participants, which prior research has shown (add reference) is critical to getting youth to increase their math grades a full letter grade during an academic year.

Question from Roseann Fitzgerald, College of the Holy Cross, Worcester, MA :
    One of the key fields used in research in higher education is coding individuals by profession and storing the individual's business contact information. I wonder if this happens in small non profits and whether nonprofits are including this question in free surveys to gather information about their consituents? Again, tips and tricks that cost next to nothing might be helpful to most audiences.

Andrew Niklaus:
    First Place uses collects this information, as youth are in and later transition from program. however, since we are working with 18 - 24 year-olds the business contact info will most certainly change. we collect relative's information and info from adults youth state they are permanently connected to. With that said, the best way to stay in touch is with programs that offer support for youth after they transition. First Place has alumni services, and it is an extension of our education and employment programming. It is not free to run, but youth come back to tune up their skills, say hello, or engage in the offerings the alumni program offers.

Question from Caity www.theagitator.net:
    What research tools are missing from (or not available to) the nonprofit sector? It seems that there are expensive scoring models that promise enhanced donor development and acquisition results ... yet almost all sectors have seen a decline in both. Thank you for your time and expert input.

Isaac D. Castillo:
    This is a tough question. I think that the nonprofit sector as a whole is missing a good way to determine which nonprofits are doing well.

For the sector as a whole, websites like Charity Navigator and Give Well are trying to do that, but they only focus on financial performance of nonprofits, not on if (and how) outcomes are achieved.

At the organization level, I think there is the need to develop good information about what your organization does, who it serves, and how well it serves your clients. Most organizations can do the first two to some extent, but not the third. There really is no tool to allow that to happen now, because there is so much variety in nonprofits.

The problem with models that promised increased donor contacts is that they rarely sophisticated enought to fully present all that an organization does. And they rarely take into account things like outcomes.

Question from Anne Peyton, Yellow Brick Road Consulting:
    I'm thankful that our profession's focus on relationship-building and donor-focused stewardship is taking us back in time to the 1950's of Sy Seymour's fund raising days. So, in relation to this topic, how can we use data to boost our relationship-building performance as a higher-level focus than fund raising?

Isaac D. Castillo:
    I think that organizations need to track outcome data and conduct peformance management for a single reason: to serve their clients better. The fundraising aspect will then come naturally.

At the end of the day, nonprofits are in existence to help people. And to know how well an organization (or program, or staff person) has helped people, they need some way to measure progress. That's outcomes measurement and peformance management. And if you don't have some process in place, you are really just guessing and hoping that you are having a positive effect.

Once an organization can prove they are postively affecting clients, then they can use that information to assist in their fundraising. The fundraising actually becomes much easier at that point, because you can say a certain investement will lead to specific outcomes in your organization.

Question from Rich Sayers, Family Violence Law Center:
    Which free or low-cost research tools do you recommend to identify potential individual major donors?

Andrew Niklaus:
    This is not my major area of expertise, and lies much more in the development department. With that said, the foundation center is a good resource. I have never used it but there is wealth engine, and I am unaware of their costs.

Question from Faye Gibbs, nonprofit consultant:
    Can you discuss the technologies you find most useful in data collection and assessment? Thanks.

Isaac D. Castillo:
    It is important to keep in mind that the technology and software used to track data and do assessment is only a tool. I use this analogy: just because someone has a word processing program, that does not mean they are a good writer.

The same goes for technology, data collection, and outcomes measurement. The best tools will only do so much for an organization, the right mindset and approach is even more important.

That being said, there are several existing software packages available that allow nonprofits to track demographic, participation, and outcomes data. The key is to get a software that is customizable to the specific needs on a nonprofit. A software system primarly designed for hosipitals (or schools) might not fit a nonprofit that focuses primarily on housing services.

Question from Jeannette Fournier, CED:
    Currently, I use the Foundation Center's research tools, the Chronicles of Philanthropy and Guidestar. Am I missing any new tools? Especially open source tools?

Andrew Niklaus:
    Not that i am aware of. These are the ones that we use internally as well. i think the foundation center is very good. Charity Navigator is going through an intensive process to overhaul they way they rank non-profits, focusing on performance management and the level of impact an organization has - they will still include financial oversight, but high performance is going to be a critical element

Question from PKD Foundation:
    First let me say that I am excited about this coversation. To start, can you offer the basic guidlnes/philospohies for proper data collection (what to use, CRM, etc) and how to effectively marry it to fundraising (or vice versa). Thanks.

Isaac D. Castillo:
    I think that the data collection process can be summed up in five concepts / questions.

1) What do you want to know/answer? You should start with the ultimate qustions that you want answered first. Do you want to know if your tutoring program is leading to better school attendance for participants? Or to better grades? Or better standardized test scores? Or all three?

2) How realistic are these questions,and can you really get the data to answer them? It's one thing to have a good question, but you have to also think about two realities: Do you really think that your program can actually achieve what you think it can? And do you really think you can collect enough information to answer your questions.

Those are the two hard ones, then you can move to the last three....

3) How are you going to physically collect the data? Who does it? Where does the data go? Who does the data entry? What software is used?

4) Who is responsible for analyzing the data? And how should it be analyzed?

5) How will the data be presented?

#5 is the one that is cricial to fundraising. Just doing steps 1-4 won't get you anywhere with funders if you fail to actually present your results in an effective way.

Question from Ingvild Bjornvold, Social Solutions:
    Can the presenters speak to their own success at raising funds by presenting performance data to funders?

Andrew Niklaus:
    First Place has had strong success in this area. We work hard to not let funders dictate what we should track. We have a theory of change that focuses our efforts on tracking three major outcomes: education, employment and housing.

As we go to funders we lead with these outcomes, and talk about success in these areas. We talk about not being focused on hash-marks, but the outcomes that move our target population towards independence and mission fulfillment.

We also work to define our work as not just housing, or workforce focused. We talk about the instability of homelessness and disenfranchisement from the the workforce as being health issues. We did this four years ago and received 500K from a large national health foundation.

Question from Kevin Wood, LifeWorks:
    It seems that collecting data is time consuming and that makes it expensive. I hear agencies saying they will collect data if they are paid for it by a funder.

How can agencies front the cost of data to increase the chance of getting money to pay for it?

Isaac D. Castillo:
    Several suggestions......

First, make data collection and performance management part of your overhead costs. Most nonprofits include finance/accounting costs in overhead. Most nonprofits include development/fundraising costs in overhead. The same could be done for peformance management. These three things are all equally important, and nonprofits should treat them as such.

Second, in every grant/proposal you write, you can include a small percentage (3-5%) devoted to peformance management and data collection. More and more funders are actually requiring this now - but their assumption is that the money for peformance management (evaluation) will go to another agency. But in most cases it doesn't have to. You could use those funds to start building your organization's internal performance management capabilities.

3) Look for capacity building grants to seed your peformance management capacity at the beginning. There are grants out there devoted to capacity building or organizational development. And building a peformance management capacity in an organization is a very persuasive ask.

Question from Jara, Word Made Flesh:
    Our nonprofit is currently using an Access database to receive addresses for our General Mailing List. We know we need to collect more information about our donors, what kind of information do you suggest and what are affordable programs or ways to implement those types of collections?

Andrew Niklaus:
    The more information you have the better. The way you the donor heard about you, what has been their past levels of giving, how do they like to be contacted (email, snail mail, all of the above), are they interested in a tour of your programs, have they been to your event, what about the mission appeals to their sense of altruism.... your development department needs to decide what is critical and what is simply nice to have - much in the same way programs decide about what to track.

First Place has recently switched over to raiser's edge. This is not an inexpensive application, but it is very powerful, and interacts well with finance software like MIP Sage. Much like performance management in programs, you get what you pay for with regards to the databases you choose. I think this is the same with development. The better the database the more scalability and therefore ability to be attentive to your donors.

lastly, I would focus on volunteer opportunities for your donors, and track what they would be interested in doing within your agency. People often like to engage and then their money follows. This is a great thing to track.

Question from Aaron small nonprofit:
    Where is the best place to look for statistics?

Isaac D. Castillo:
    Aaron - can you clarify as to what you mean by statistics?

Question from Rich Sayers, Family Violence Law Center:
    Which free or low-cost research tools do you recommend to identify potential individual major donors?

Andrew Niklaus:
    I mentioned the foundation center, and also wealth engine. I have not used the last one, and I am unaware about how much it costs

Question from Kevin Wood, LifeWorks:
    It seems difficult in the down economy to spend time(money) on data collection in hopes of getting money. I hear that we will collect the data if we get funding to do so. How can agencies front the money to get the data?

Andrew Niklaus:
    great question. I don't believe it takes a great deal of money up front to collect the data. If you don't have a database, you can look at salesforce.com - it is very inexpensive. The commitment to collect data is critical to the longevity of your agency. As much effort as possible should be put towards this effort. I am happy to talk offline in greater detail. This is a critical topic. Kevin, feel free to email me at aniklaus@firstplaceforyouth.org

Question from Sarah, Ovations for the Cure:
    How important is it to have a managable and efficient data mining system to track donors, and their history?

Andrew Niklaus:
    Critical - absolutely critical. I had mentioned earlier that we recently switched to raiser's edge. This was done for many reasons, but the mining of data was certainly one of them. The not-for-profit world is as competitive as anything out there. To short cut databases, fund development, program, finance, is to leave your agency exposed. Agencies that seek and utilize cutting edge technology will come out on top.

Question from Janine, The Greenlining Institute:
    As a public policy advocacy organization, we do not provide direct services, and have found it difficult to pull out data that reflects our impact. Our work many times informs policy and legislation. How can we track our ability to serve our clients, underserved American populations? Thanks for your help.

Isaac D. Castillo:
    Very good question. Measuring the effectiveness of advocacy work can be difficult, but it can be done.

My first suggestion would be to actually articulate what it is you mean by advocacy and what do you actually do. Do you do public information campaigns? Do you lobby? Do you meet with policy makers? The more specific you are with your activities the better, because it will then help you with the next step.

Think about how those activities link to policy or community level change. And then think realistically if your organization could have played a part in that change.

For example, if you are trying to lobby policy makers to implement a new law, you could track all of the following....

The number (and length) of meetings your staff had with relevant individuals. Number of constituent letters/e-mails that your organization helped get to the releveant individuals. The number of versions of the new law presented. Whether or not any of the language you used was included in any versions. Whether or not (and how often) you were consulted about the legislation. Votes on the legislation. Did the legislation get passed or not.

You'd ultimately like to be able to say something like: Our organization had 300 hours of meetings with 10 city council members about the law. We also organized an e-mail/letter campaign resulting in 5,000 constituent contacts. Etc.....

Question from Caryn Lange, Wilson College, Chambersburg PA:
    In your experience, do you feel it is more appropriate/official to have your giving levels be named (i.e. "Gold Level", "Silver Level") in addition to listing the dollar amount of each, or are dollar amounts sufficient?

Andrew Niklaus:
    we use the term major donor. I think whatever resonates best with the values of your organization makes sense. Whatever you are using, it is critical to identify performance markers for your development team. Each category - gold, silver, etc. - should have a total amount of donors for the year. Example: gold: 50, silver: 75, etc... This way you know what you are hoping to get in, and you can also manage the performance of the fund development team

Question from Danielle, cancer support community:
    Good afternoon. I work in a small nonprofit, and manage the database, so data is a large part of my job. What would you recommend would be good data to harness?

Isaac D. Castillo:
    This again depends on what larger questions you are trying to answer.

Articulating the questions first is always helpful, because then you can look at your data with a purpose, instead of just trying to look a bunch of different things. Plus, you will also then start to identify where you are missing important types of data - which gets you thinking about how to collect that information in the future.

Question from Liz, small int'l NGO:
    I work for a non-profit that does international social work; a lot of which has intangible results. We struggle with how to measure our work without reducing the people we work with to numbers. What kind of data are donors looking for- what do they find to be accessible in terms of financial reporting to show accountability and information about the effectiveness of the work of a non-profit?

Andrew Niklaus:
    In my experience, the most effective way to communicate the benefits of an organization's work is to use both numbers and stories.

The numbers provide funders an idea of your reach and (if they are outcome numbers) your effectiveness. Examples: We worked with 10,000 individuals in 10 countries. 500 received signficant services from us, and of those, 400 increased their income level by 100% one year later.

Then, you should also add a story or two to give more specifics on your work and how changes occur at a personal level.

Numbers without stories are just numbers. But stories without numbers are just stories. Stories and numbers together equal persuasive material for nearly all funders.

Maria Di Mento (Moderator):
    It looks like our time is up. Thanks to everyone who joined us today. I hope you found the conversation informative, and I apologize for the technical problems that we experienced early on. Thanks also to Isaac D. Castillo and Andrew Niklaus.

Maria Di Mento (Moderator):
    Please join us on Thursday at noon Eastern time when we will be talking to the Knight Foundation’s president, Alberto Ibarguen. We hope to see you then.