Many nonprofits assume they own this data. After all, it’s related to their supporters and their fundraising work. But the truth is that this data lives inside the different technologies you use to support your online fundraising efforts, tied to the different tech vendors you partner with. Therefore, it’s important that you define strict parameters around who owns this data: you or your vendors.
Unfortunately, there can be instances when tech vendors claim ownership. Further, they can sometimes make it very difficult, or flat out refuse, to release your data if you decide to move to a different platform or upgrade your tech stack with a different vendor.
As you can imagine, losing access to your nonprofit donor data can negatively impact your nonprofit in a number of ways—like disrupting your fundraising efforts, for one. We met with two Classy team members to shed some light on this issue and provide tips for how you can avoid this situation.
Below, you’ll hear from Michael Prodor, technical engagement manager, and Wes Goldstein, director of strategic services. Together, they’ll outline why it’s so important you own your own data, why some vendors cause difficulties, and how you can negotiate a contract to account for different contingencies.
Let’s say you’ve spent a few years building a strong recurring giving program with 20,000 monthly donors. However, after building this on a certain platform for years, your nonprofit wants to make a change to a different platform.
Clearly, you want to bring these 20,000 recurring donors and all their data—like credit card numbers, home addresses, emails, and giving history—with you when you migrate platforms. However, your current vendor tells you they won’t be able to release this data, or it will cost a large sum to export the data, or it will take months to export.
“Some vendor will make this process sound impossible, or like it’s the first time they’ve ever had to do this. But they’ve done it before. It’s a simple query they have: you press one button and it generates a file with all your nonprofit donor data. Very rarely would it actually take longer than one or two days to complete.”
To help paint a picture, Michael gives us the analogy of moving into a new home. Think of the new platform you’re migrating to as a house, and the data are the many things that fill it: furniture, rugs, beds, etc.
When you move to a new house, the moving company you’ve already hired should take all your belongings to your new home. They shouldn’t tell you that they’ll move everything except the contents of your dining room because they can’t, or that moving the dining room will cost you more money, or that it will all arrive months later.
Your data has to be owned by you and it has to come with you when you migrate. Without it, you could lose the ability to connect with your donors.
That, in turn, can start a chain reaction of system failure among your stewardship, retention, and engagement strategies. Ultimately, this can diminish your fundraising revenue and wash away months, or even years, of hard work.
Analyzing the Value of Your Nonprofit Donor Data
The true value of supporter data is somewhat subjective from nonprofit to nonprofit. However, across almost all organizations, data is inherently valuable.
Even seemingly simple pieces of data can have a high value for your organization. This is especially true if that data is tied to recurring donors, who are over five times more valuable than one-time donors.
The more supporter data you have, the quicker that value begins to pile up. Here’s a little math breakdown Michael gives to illustrate this point:
Let’s say your recurring giving program has 20,000 donors with a median of $50 per donor. Every month, you make $100,000 from recurring donations, or $1.2 million a year.
Now, let’s say your current tech vendor withholds all that recurring data when you migrate platforms. Not only are you losing out on that sustained monthly revenue for an undetermined period of time, you might also have to start from scratch to re-engage and rebuild your pool of recurring donors.
“Aside from the financial disruption, a big part of this is protecting the hard work you’ve already done as well. You didn’t start out of the gate with 20,0000 recurring donors, you worked day and night to sign them up and retain them.”
The Agitator, a blog created by Donor Voice, recently ran a survey of nonprofits, asking if they’ve ever been met with resistance like this when migrating platforms. When it came time to transfer data, 31.2% of their respondents said, “yes,” they were met with resistance.
So, we know that this sort of resistance definitely happens. According to Wes and Michael, the key is to get ahead of it in your front-end contract negotiations.
The Solution: Contract Negotiation
To help avoid this issue and ensure your fundraising isn’t interrupted, it’s important you address the question of data ownership at the very beginning of your vendor partnership, in your contract negotiation. Make sure that ownership is explicitly called out: you may even want to consider making it a standalone section.
What’s most important is to say that all data is owned by you, the nonprofit, not the vendor. Here are a few other pointers from Wes to keep top of mind:
- Have clauses that explicitly state you own your own data
- Build a relationship with your vendor that allows you to extract your data when you need or want it
- Create a service level agreement (SLA) so you can get your data in a reasonable timeframe
“It’s usually easier to pre-negotiate the ownership of your data before you’re in the moment, when you can’t get what you need, and things get potentially emotional.”
The reason this can be tricky is that data ownership doesn’t typically come to mind when purchasing software or upgrading tech stacks. You have to think past the growth you’re hoping this upgrade or purchase will help you achieve.
“When I buy a car, I’m not thinking of how I’ll sell it someday. But that doesn’t mean I should never think about resale value, because I’m likely not going to keep this car forever.”
Ask yourself, where will your nonprofit be in five years? Creating an exit strategy doesn’t mean you abandon your new platform before you even use it. However, including written clauses about the ownership of your organization’s data can alleviate a lot of friction later if you decide to move on to a different provider.
“Remember, a contract is designed to take the emotion and guesswork out of situations like this.”
Finally, during your initial contract negotiation, pay attention to how the vendor deals with you. If they’re difficult to work with at this process, the chances are high they’ll be difficult for the duration of your relationship: especially if you decide you want to leave.
“Your data is your data, whether it’s contact, financial, donor, credit card, or anything. Make sure you really, truly own it.”
It can be easy to overlook this part of a contract negotiation. But if you can plan ahead and imagine contingencies for when you may need to export data from a vendor, you can avoid fundraising and donor retention disruption down the line.
To learn more about how your donor data can power your nonprofit, download our guide below. It will show you use cases for the various ways you can put this crucial donor data into action.