Data is one of the most valuable assets a charity can possess. Yet, many charities unknowingly hand over control of their donor data to third-party platforms without fully understanding the implications. While these platforms offer great benefits such as convenience and exposure, it’s important to note it can sometimes come at a cost: loss of data ownership.
In this article, we’ll explore the importance of data ownership for charities and why a charity should own its data.
Understanding Data Ownership
Data ownership refers to having complete (and sole) control over the information your charity collects, stores, and uses. When your charity owns its data, you have the authority to decide how it is utilised.
This is in contrast to the scenario where donor data is stored on third-party platforms, where you might only have limited access and control over how that data is used.
How Do Some Third-Party Platforms Use Charity Donor’s Data?
There is no doubt we have some excellent platforms to engage with and collect donations from donors. It shows the development of the charity tech sector, and it’s something to celebrate.
At the same time however, it is important charities are at least aware of the different approaches to data management. Some Charities prefer a donor-centric approach where they wish to develop long-term relationships with their donors, positioning themselves as the primary charity. Other charities may not be as concerned and want to maximise donation collection.
In any case, it’s worth noting that some 3rd party platforms may collect charity donor data in several ways which may be at odds with how you wish to build your charity brand:
- Data Monetisation: Platforms may use donor data for targeted ads, sell it to third parties, or generate revenue through analytics. This can dilute your future messaging and fundraising efforts.
- Cross-Promotion: They might promote other campaigns or send marketing emails to donors based on their data, potentially diverting funds away from your charity.
- Platform Optimisation and Product Development: Donor data is used to improve platform features, conduct A/B testing, and develop new services.
- Insufficient data collection: Some platforms may not collate and share all the required data of a donor, e.g. detailed consent preferences or project details. This can be due to technological constraints or limited data collation, which can reduce a charity’s data management.
- Control Over Communication: Crowdfunding sites may retain control over donor communication and data, restricting the charity’s ability to build direct relationships.
These practices highlight the importance of data ownership.
So Why a Charity Should Own Its Data?
If you are still wondering how moving from third-party platforms to your owned system will benefit your charity, below are a number of things you can achieve:
1. Enhancing Fundraising Capabilities
When charities avoid using third-party sites (e.g., for event management, crowdfunding, etc.) and keep their data within their own ecosystem, they gain significant advantages in fundraising.
Maintaining control over donor data allows charities to effectively market to their same supporters exclusively for future campaigns, enabling them to expand their donor base.
According to the CAF UK Giving Report 2023, post-pandemic donations made through websites or apps have increased, with 26% of donors using these methods compared to 20% in 2019.
This direct engagement not only protects donors from being targeted by other charities but also enables personalised outreach.
Also, charities can use donor data insights to craft fundraising campaigns that align with their donor base.
- They can use this data to build effective donor journeys and refine their ideal donor personas, which can help them target prospective donors.
- Charities can analyse donor behaviour to identify trends, such as peak donation periods or preferred donation methods, and tailor their outreach accordingly.
- Additionally, they can segment donors by demographics, interests, or donation history to create highly targeted campaigns that resonate more deeply with each group.
Recent data from Donor Pulse Report 2024 highlights the growing importance of charities relying on their own websites for collecting donations and running campaigns. Over the last quarter, while donations made through consumer-giving platforms have declined, donations made directly through charity websites have remained stable.
This trend underscores the value of direct donations, which have consistently been around 25% higher in value compared to those processed through third-party platforms. In today’s challenging economic climate, charities should be focusing on driving direct donations through their own channels. It not only ensures greater financial returns but also strengthens your charity’s control over donor data and engagement strategies.
2. Improving Reputation Through Direct Management
Managing donations directly through a charity’s own platform boosts its reputation. It gives donors peace knowing that the charity directly processes their donation without third-party involvement. So they can be sure that the campaign or beneficiary they want to support receives funds immediately without processing delays.
This is especially important during times of crises or urgent appeals when delays can negatively impact donor confidence. Immediate processing can be particularly reassuring for high-value donors, who are often more cautious about where and how their money is processed. It demonstrates the charity’s professionalism and can build trust and encourage more substantial contributions.
Charity Digital considers a charity’s reputation to be derived from the following three attributes:
- Trustworthiness: what the charity and its staff do
- Competency: how well it carries out its charitable activities
- Values: why it does them
Charity Digital: Charities and reputational risk (Rubens, 2021)
A charity running its campaigns and collecting donations through its own site is better equipped to demonstrate these attributes.
3. Delivering Customised Donor Experiences
Not having direct access to donors limits a charity’s ability to deliver a personalised donor experience.
On the contrary, having data in your own system allows charities to customise their internal workflows, which is then reflected in offering highly customised donor experiences. It could range from automated and personalised donation receipts to tailored ongoing communication.
For instance, charities can directly send personalised thank-you emails and updates on ongoing projects like specific projects (see Feedbacks) and orphan sponsorship programs. These efforts help donors feel connected to the cause and confident their contributions matter.
Moreover, charities can implement tiered recognition programs, where donors receive different levels of acknowledgement based on their contribution size or frequency. This level of customisation is just not possible when processing through third-party platforms.
Orphan pack delivered to sponsors via the Engage CRM Sponsorships module
Additionally, customised donor experience also contributes towards major gifts and donor retention. Most major gifts are made after 4-5 years of consistent giving, with a study showing that it often takes 18-24 personalised touchpoints before a major gift is made. This highlights the critical importance of donor retention and long-term relationship-building. Without maintaining consistent engagement over the years, the likelihood of receiving a major gift diminishes.
This concept directly ties to the importance of delivering a customised donor experience.
4. Achieving Cost Efficiency
Processing donations through a charity’s own platforms eliminates third-party platform fees. If a charity raises £1 million and avoids a typical 5% platform fee, it saves £50,000. These savings tend to be more with an organisation’s own IT infrastructure. This can also fund additional projects, support operational costs, or be reinvested into furthering the charity’s mission. By contrast, relying on a third-party platform would mean losing a significant portion of these funds to fees.
Some platforms may charge fees for features like video hosting or premium listings. In addition, by managing their own fundraising platform, charities can avoid hidden costs associated with third-party platforms, such as transaction fees or charges for processing international donations. This ensures that a larger percentage of each donation goes directly to the cause, which is often a key concern for donors.
5. Building Long-Term Donor Relationships
Owning the donation process and data allows charities to nurture long-term relationships with donors through consistent, personalised engagement. Third-party platforms are often geared towards short-term campaigns with limited follow-up capabilities.
The same Donor Pulse Report in 2023 related that an increase in direct donations to a charity also led to a reduction in the “give and forget” phenomenon, where donors struggle to recall the charity they supported, especially when donating through consumer-giving platforms.
Data shows that 67% of donors could remember the name of the charity they last donated to when giving directly through a charity’s website, compared to a lower recall rate associated with third-party platforms.
Donors are 38% more likely to remember the charity’s name when donating directly, which is crucial for converting one-time donors into long-term supporters. This improved brand recall, linked to direct donations, not only enhances donor loyalty but also results in higher average donation amounts.
The primary reason for poor recall on third-party platforms is the lack of visible charity branding, with 49% of donors citing this as a key issue.
Moreover, a charity owning donor data can set up automated, personalised messages for milestones like project completion or beneficiary progress, keeping donors engaged year-round. In contrast, third-party platforms may limit ongoing communication, making it harder to maintain strong relationships.
Lastly, charities can create customised donor portals where supporters can track their giving history, see the impact of their contributions, and manage their preferences. This kind of ongoing engagement fosters a sense of community and belonging, which is crucial for building donor loyalty and increasing lifetime donor value.
Ready to Own Your Charity Data?
At N3O, we believe that charities should have full control over their donor data and fundraising efforts.
With our CRM – Engage, your organisation can move beyond the limitations of external platforms. You can escape platform fees, restricted data access, and hidden costs. Engage CRM empowers you to process donations directly via your own infrastructure, ensuring that you keep every pound you raise and retain complete ownership of donor data.
With Engage, you’ll have the tools to create customised donor experiences, safeguard sensitive information, and easily comply with data regulations. Most importantly, you’ll build stronger, long-term relationships with your supporters, all while maximising the funds available for your mission.To learn more about how Engage can help you achieve your charity goals, reach out to us at mail@n3o.ltd.
