Happy New Year! (if your fiscal year started on July 1)
The start of a nonprofit's new year is always an exciting time, with new fundraising goals to meet or exceed.
In a previous post, I talked about the importance of measuring your fundraising success beyond your budget and its bottom line.
Yet far too many nonprofit leaders rely on that single number to measure success.
In fact, there are many ways (and reasons) to measure various components of your fundraising campaigns.
So, what's important to measure in fundraising? And how do you do it?
MEASURING WHAT MATTERS
In the book, "Fundraising Basics: A Complete Guide," the authors cite the research and work of James M. Greenfield.
Greenfield identified these three points of basic fundraising performance:
- Participants (a number)
How many donors did you have?
- Income (a dollar amount)
What were your gross contributions?
- Expense (a dollar amount)
What were your fundraising costs?
Most of the time, most nonprofit leaders can answer #2. They know exactly how much money is coming in.
What about questions #1 and #3?
Do you know how many people gave to your organization in the past 12 months? Do you know how much you spent to get (and keep) these donors?
More importantly, do you know which numbers are growing, falling, or flat?
For individual fundraising campaigns, Greenfield goes one step further to identify six specific performance measures:
- Percent Participation (a percentage)
Divide the number of people who made a gift by the number of people you asked
- Average Gift Size (a dollar amount)
Divide the income you received from the campaign by the number of people who gave to that campaign.
- Net Income (a dollar amount)
Subtract your fundraising expenses from the income you received.
- Average Cost per Gift (a dollar amount)
Divide your fundraising expenses by the number of people who gave.
- Cost of Fundraising (a percentage)
Divide expenses by income received
- Return on Investment (a percentage)
Divide net income by expenses
Your numbers will vary from activity to activity. The results will also vary from year to year.
It's important to "know your numbers" so you can see what's working, where your fundraising is most successful, and where you might need to make some changes.
TOOLS THAT CAN HELP CALCULATE YOUR FUNDRAISING RESULTS
If your head is swimming, don't worry.
There's probably someone already in your organization who's a "numbers person." (If not, consider looking for a person with this skill/interest when recruiting your next board member.)
If you want to do the number crunching yourself, know that there are tools to help.
These tools are free to use:
Another plus, you don't need a lot of data to get started - just a list of gifts from your database with these three fields: donor ID, date, and amount.
These tools allow (and encourage) you to use more than one year of donor data in your reporting. This helps you see trends over time.
Your numbers tell a story.
What are your numbers telling you? And what can you learn from what they're saying?
HOW YOU CAN USE THIS INFORMATION
The start of your fiscal year is the perfect time to reflect on your outcomes from last year, then set new goals and start working towards them.
Remember, though, when you're evaluating your past fundraising results, you need to do more than "know your numbers." You need to think about what you'll do with that information.
Consider something as simple as your number of donors. Is this number increasing, decreasing, or about the same? If it's not increasing, think about what you need to do to attract new donors and/or boost donor retention.
Winston Churchill famously said,
"Those who fail to learn from history are doomed to repeat it."
So, if you want different fundraising results this year, start by studying your history. Let your past results inform your future fundraising practices.
Then, set goals and targets in specific areas (like donor acquisition or donor retention). When you do, you'll be well on your way to future fundraising success.
Photo credit(s): Unsplash and Collin Armstrong
Need help measuring your past performance? Or creating a fundraising plan for the future? Laura Rhodes can help.
Send a message to start the conversation and learn how Laura can help you and your organization.
You may also be interested in upcoming training events.