Why Non-Profits Should Use Co-op Databases
Cooperative databases for the nonprofit sector are not new, but they remain an underutilized tool for many marketers.
A cooperative database is one in which donor transactional data from participating organizations is merged for the mutual marketing benefit of its members. This detailed transactional history provides a multi-dimensional view of donors, their behavior and value.
Robust models are then developed from this data for acquisition, reactivation, optimization, and donor upgrading purposes.
Despite the benefits, some nonprofits hesitate to participate in co-op databases. The decision not to participate is influenced by industry myths – concerns about saturating their donor bases, risking unique donor data, or simply that an organization is too small to benefit.
Let’s cut through the noise with five key reasons why every nonprofit organization can benefit from the co-op environment.
Reason 1: Cost Effectiveness
Participating in the cooperative environment is a game-changing opportunity for budget optimization. Nonprofits are increasingly under pressure from and ever-shrinking prospect universe. At the same time, costs are rising – from printing, to mailing, to media buying.
Transactional data from co-ops fuels powerful predictive modeling. This modeling helps identify new, high-value prospects as well as donors that are more likely to donate again, and at higher levels. A significant chunk of a nonprofit’s budget is wasted on promoting to “prospects” that are extremely unlikely to respond, or whose gift size doesn’t justify its cost if they do respond. Using co-op data to select – or deselect – names reduces wasted spend, allowing you to avoid mailing low-quality prospects who in fact are not prospects at all.
The cooperative database also helps you get the most from your current donor base. Transactional data helps lapsed donors who are still active elsewhere, and thus most likely to reactivate within your program. This unique donor insight is also the nonprofit marketer’s map to upgrading existing donors.
Reason 2: Deep Insight Without Over-Mailing
One of the main concerns is the fear of oversaturating the market and ultimately dampening response rates. But participation in a co-op doesn’t mean your donors will suddenly be inundated with mail from other nonprofits.
Every co-op is different. Each uses unique modeling techniques; each possesses unique data elements; and each employs a strategic approach to satisfying client objectives. As a result, each co-op tends to qualify unique universes with less overlap than that experienced with traditional vertical list exchange or purchase. The goal is to create highly targeted segments, rather than simply fill mailboxes. With traditional list selection, this level of discrimination isn’t possible.
Reason 3: Low Risk
Since every participating organization must contribute, shared responsibility reduces risk for everyone involved. Generally, co-ops do not retain unique donor information. Instead, most co-ops incorporate only multi-occurring or duplicate donor data, as it tends to be far more predictive. So you don’t need to worry that your truly unique donors will be promoted by other nonprofits.
Reason 4: Bridge the Offline-Online Gap
Many modern nonprofits are increasing their digital presence, but this remains a complicated challenge. Digital is the hot trend, but digital strategy must be applied intelligently. Through its wealth of transactional insight, the co-op environment allows nonprofits to identify the audiences most appropriate for digital campaigns.
Reason 5: Organizations of Every Size Can Benefit
The nonprofit co-op environment is useful for nonprofits both large and small, especially regional and chapter-based nonprofits, which typically struggle with limited universe. Co-ops can deliver a high number of potential high-value donors in a small area. The co-op helps identify seemingly unrelated organizations with overlapping segments to maximize donor targeting. As a co-op grows, and more organizations join, its resourcefulness and efficiency only increases it.