Data is being created at an alarming pace, as information is collected from a growing range of sources such as social media, smart phones, tablets, cameras, satellites, remote sensors and other emerging technologies.  In fact, IBM estimates that as of 2012 an additional 2.5 exabytes of data is created every day – the equivalent of all words ever spoken by every single human being in history. 

Data is neither intrinsically good nor bad – it simply is; it exists.  It is what we use data for that causes controversy.  It’s hard to be for or against data, but the use of data by government and businesses to determine buying behavior, track calling patterns or display advertising as we surf the web – are popular topics in today’s digital world.

One use of data that many also find controversial, as a recent CNNMoney article notes, is the use of data by colleges and universities to research potential donors.  Colleges and universities, like thousands of nonprofits, rely on donations from alumni, friends and other constituents to help fund their missions, however, not all constituents are equally able or motivated to contribute.  A common fundraising rule of thumb says that about 10% of constituents will donate approximately 90% of the fundraising goal.  In other words, there is a “sweet spot” in philanthropy that is found at the intersection of those who have the ability, , or capacity to give significantly, and those who also have the interest and affinity – or propensity – to give.

Colleges and universities, like all nonprofit organizations, have limited resources.  Because they are supported in part by donations, grants and government funds, they are beholden to those funders to use their resources wisely. One way they can demonstrate good stewardship is through the practice of good prospect research.

In order to keep fundraising costs low and donations high, it is essential to identify those individuals at the intersection of propensity and capacity. Data helps nonprofits identify the wealthy and data helps identify those who are interested in a particular mission or cause, as well as those who have a connection to the specific nonprofit. 

Using data to find the sweet spot – those 10% who will fund 90% of the need – is smart, efficient and effective fundraising.

As a donor and volunteer for a number of organizations through the years, I personally am glad that nonprofits practice good stewardship by utilizing the tools at their command to quickly and efficiently identify their top prospects.  That means they will not waste precious dollars marketing their mission to those who cannot give, or those who will not give.  It means more of my donated dollars will go to benefit the mission I am passionate about and less towards supporting overhead costs. 

It also means that I will receive fundraising messages that are appropriate to my interests and my financial circumstances.  I don’t want to receive solicitations for a scholarship when my interest is in research.  I don’t want to donate for women’s health when my interest is in helping the homeless.  Data properly used can cut down on all the noise – cut through the clutter of extraneous and irrelevant babble – leaving relevance and meaning in its wake.

I am sure there are many who will disagree with me, and that is okay.  I share many of your concerns over the proliferation of data and some of the ways it is being used.  But I don’t share a fear of prospect research.  I applaud it.

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