When it comes to determining how efficiently your nonprofit raises money, there’s nothing quite as helpful as a large pool of accurate, relevant fundraising performance indicators that can objectively show you exactly how well you’re doing. But sometimes, it can be tough to figure out exactly what measures your organization needs to identify where your fundraising performance may be lacking.
That said, most nonprofit organizations will always be able to make use of some of the same core Key Performance Indicators (KPIs). We’ve selected nine fundraising-related KPIs that have aided Development Directors, Executive Directors, Major Gift Officers and nonprofit management everywhere.
1. Donor Growth (Year-Over-Year)
Here’s an obvious one. When you’re focusing on improving your fundraising efforts, you’ll always, always want to make sure that you’re accurately measuring the growth in donors your nonprofit experiences year-over-year. If you’re losing donors, odds are, you’re losing ground in other areas, and if this KPI is negative, well, there aren’t going to be many indicators that act as a bigger red flag.
2. Donation Growth
Similar to Donor Growth, Donation Growth as a KPI can help to make sure you’re staying on track over time. If you’re able to go back on the year and see that your donation growth stagnated or dropped in a specific month (say, August), you might be able to use that information to plan for that period next year, and make sure your team puts out a more concerted effort to find more growth around that time.
3. Average Gift Size Growth
This is a big one. One of the easiest ways to see a 25% growth in donations for the year is to spur your donors into each donating 25% more during that year. If you see that your efforts net you a large number of new donors, but everyone is donating in small amounts, perhaps you can leverage your relationships and spend less time focusing on finding new donors, and more time cultivating the ones you already have. After all, $10,000 from 50 people instead of 500 is still $10,000.
4. Donor Retention Rate
How much turnover are you experiencing? Gaining new relationships is always more costly than cultivating existing ones, so you need to track the percentage of donors who continue to donate to your cause after their first gift. Retaining donors is not as difficult as it may seem. In fact, here are 5 simple ways you can increase your donor retention rate.
5. Pledge Fulfillment Percentage
Whenever you’re dealing with pledges, the biggest fear you will have is in regards to how much of that “pledged” value will you actually retain from your pledging donors. To avoid that potential nightmare, it’d be nice to have a sense of how much of those funds you will actually end up receiving, and that’s where this measure comes in. While you’ll always want to budget for a certain amount of error, knowing more accurately the patterns of your constituents over a historical period can really help you to prepare accordingly.
6. Recurring Gift Percentage
Similar to your Donor Retention Rate, you’ll want to track how many of the gifts you receive are recurring gifts. If you can confidently expect that you’ll continue to receive those gifts, and recognize where those gifts are coming from, you may be able to leverage that and begin a small, targeted campaign to increase those gift sizes, or increase the number of donors who begin giving recurring gifts.
7. Social Media Engagement
Awareness plays a large part in how well you’re able to improve fundraising efforts. With limited advertising budgets at your nonprofit, garnering the most value you can out of free services, like many social media platforms, is an absolute must. But many organizations spend far too much time focusing on the wrong things when it comes to social media – so what should you be focusing on? Well, the whole point to any marketing effort is not just to generate impressions – its to spur engagement with your audience of current and potential donors and volunteers. You want to drive your followers to your website, not just “Like” your page on Facebook – in fact, pure social media reach on some platforms, like Facebook, may be a lot less valuable than you might think. Due in part to the platform’s desire to encourage brands to pay for advertisements, since 2012, less than 16% of your total Fans actually see your posts in their Facebook News Feeds via pure organic reach.
That’s not to say that social media reach isn’t important – organic reach is much better on platforms like LinkedIn, Pinterest, Twitter, and even Facebook’s sister company Instagram. But you don’t want to focus your time worrying solely about how many likes you get – instead, focus on how you can 1) send more prospects from social media to your website where you’ll be able to convert them and garner valuable information, and 2) encourage your visitors and followers to share your content with their friends and followers.
8. Fundraising ROI
Return on Investment: pretty important to an organization with a limited budget. How much of your precious time and resources are you actually spending to gain each donation or gift? Take everything into account here: you’ll want as comprehensive of a data set as possible to keep track of where you’re spending your money, and how much you’re getting out of it. For example, the cost of your donor management software contributes to your Fundraising ROI. At DonorPro, the average cost of our software solutions in generally around $0.03 for every $10 in funds raised. So, add up all of your factors, and see how much you spend to bring in your donations.
9. Online Gift Percentage
Finally, how many of your gifts come in the form of online giving? If that percentage is low, see if you can increase it. In most cases, the cost of acquiring donations online is much lower than through any other medium. Take advantage of that, and try to make sure that you maintain a healthy percentage of gifts received digitally.
This post, “9 Key Performance Indicators Nonprofit Management Needs To Track”, was originally published on August 28th, 2014. It was most recently revised and updated on September 11th, 2015.