The TL;DR version: the best information is told.  It’s not bought from outside providers nor does it live in a transactional database.

But I’m guessing you tuned in for something a bit more in-depth, so there are three big reasons why:

The predictive ability of external data is spotty at best. I recently got done looking at a year of results for an organization who segmented by a wealth data append.  The results showed zero impact between those donors who wealth screened as high-value donors and those who did not.  And this was for entry into a mid-level giving society.

Other data also suffer. You are probably already segmenting by recency, frequency, and amount of giving.  But the person who last gave 11 months ago isn’t very different from the one who gave 13 months ago.  Or the person who gave $25 twice instead of $50 once.

The value of demographics is likewise overstated.  Todd Yellin, Netflix’s VP of product innovation, stated “There’s a mountain of data that we have at our disposal. … Geography, age, and gender? We put that in the garbage heap. Where you live is not that important.”  Netflix is a great example of a company built on data that people gave to them willingly to create recommendations.

For us, things like commitment, donor identity, and cause connection are all far more predictive of future giving than these weak indicators.  The trick is that you only get these data by asking.

Our abilities to get purchased data may be threatened.  Just the idea that people are gathering data on you without your knowledge or consent seems creepy, even when the data are relatively benign.  So there is some push back against our abilities to use these data.

For example, Apple is under fire from advertisers for blocking cookies on its mobile devices and Safari browser.  There’s a significant debate over this, but since Apple doesn’t make its money from ads and two of its largest competitors do, I’ll wager the debate won’t change Apple’s mind.

This means that remarketing, open rate data, and personalization within our websites won’t work (in many cases) on these devices and browsers.

When people started using the Web, there was a famous cartoon:

Now, your every step is followed.  Everyone knows you’re a dog, what type of dog you are, and which brand of anti-flea shampoo to market to you.  But the pendulum may be, for better or worse, swinging back.

This isn’t just online.  Nor it is just for for-profits.  Large British charities are being fined for “snooping” on their donors. Their crime: doing a wealth append to their donor file.  There are also broader EU-level discussions on restricting data use in marketing.

Here in the US, wealth appending is a common-ish practice.  (We tend to believe that if you outlaw wealth appends, only outlaws will append wealth data.)  But in culturally similar countries, donors were so angry about this practice, they banned it.

Not only must we gird against this coming to the United States, but we must also remember we have European folks on US distribution lists.  Thus (while IANALATINLA*) we are subject to these regulations as we send out fundraising appeals.

We must prepare for a future without these external data.  The safeguard against this is to get data that is personal to your organization and provided by the donor.

Few people get mad at you for using data you got from them directly.  In fact, they now expect it.  If someone says they had a bad donation experience and you send them an email wanting to help fix it, that’s a net win for them.

This is not the case for appended or generated data.  Not only are there the slip-ups using transactional data (e.g., my recent unhappiness at being called a lapsed donor by an organization to which I’d just donated), but big data and algorithms can do some downright cruel things.

In 2014, a man received a letter from OfficeMax that was addressed to his name, with the second line of the address reading “Daughter Killed In Car Crash.”

Yes, a year earlier, his daughter had in fact been killed in a car crash.  As someone who has lost a daughter, I can tell you that this type of solicitation does not make me want to buy office products.  It makes me want to find the person responsible and punch them until I run out of fist or they run out of face.

But there probably was no person responsible.  A screw-up that large requires a faulty system to let that letter go through.  And every snowflake in that avalanche pleads not guilty.

This does not happen when you are using user-generated data.  Yes, you will get the occasional person who tests your online system by entering more adult versions of “Richard Poopyfacehead.”  I would describe these attempts as adolescent except for my desire not to besmirch adolescents.

So, better results, fewer mad donors, and the ability to use the data long term – this all sounds like an argument for taking from investment in appending and acquiring data from outside sources and putting it into asking donors about themselves and building from that.

In fact, it is that argument.  So if you have a good counter-argument, let us know in the comments!

* I Am Not A Lawyer And This Is Not Legal Advice