"What gets measured gets done."
Perhaps you've heard this saying.
With the start of the new year, it's a great time to ask, "What does our nonprofit want to get done this year?"
Then, the corollary is, "What fundraising metrics do we need to measure?"
THINK BEYOND DOLLARS RAISED
For many nonprofits, the primary way - and sometimes, the only way - they measure their success is in total dollars raised.
They ask, "How much money did we bring in this year, and did we meet our budget?"
Yet there are so many other success metrics. In addition to straight-up dollars raised, you might consider measuring simple things like:
- average gift amount
- median gift (your middle gift, since a really large gift can skew your average)
- mode (or the most frequently given amount)
- donors in the 90th percentile (or the top 10% of your gifts)
- number of new donors (first-time donors to your organization)
- number of renewed donors (those who gave to you in two consecutive years)
- number of upgraded donors (those who increased this year's gift over last year)
- number of converted donors (annual donors who became monthly donors)
- % of board members who made a personal contribution
- number of grants written (and awards won)
- number of major gift visits (and commitments secured)
This list isn't exhaustive, but it should get you thinking beyond dollars raised.
I can think of reasons why each of these numbers would be important to a nonprofit.
That said, just because you can measure something doesn't mean you should.
Don't measure, just for measurement's sake. Always have a goal in mind.
KNOW HOW YOU'RE GOING TO USE THE DATA
Before you start tracking and reporting on any new fundraising metric, consider why you want to track that particular number.
For instance, maybe you want to increase your donor retention rate.
So, if increasing donor retention is your goal, you'd want to do a few things like:
- Know what your current donor retention rate is. (see how to calculate donor retention)
- Set your new donor retention goal.
- Make a plan, then take steps towards improving donor retention.
Knowing your baseline and setting your goal are important steps. But it's the third step where things really start to happen.
You need to have strategies and an action plan for creating the change you want to see. And, you need to follow through on those actions.
For donor retention, for instance, your strategies would most likely be tied to better stewardship of your current donors. You might focus on donor-centered communications. You might also try more frequent contact and a different kind of outreach.
In this example, once you've identified your stewardship strategies, you can create specific action steps. What will you do to make your communications more donor-centered? How often will you reach out to donors? Who exactly will you reach out to, and what will that look like when you do?
Each plan will be different, depending on the goal - and also on the nonprofit.
WHAT'S MOST IMPORTANT TO MEASURE AND WHY?
Again, just because you can measure something doesn't mean you should. You want to have a goal - something that will help move your organization forward.
In my opinion, and at a minimum, every nonprofit should pay attention to these two areas:
Board giving
All nonprofit organizations should strive for 100% board giving.
This is a litmus test about your board members' level of commitment. Every board member should give their time, talent, and treasure.
Board members' individual capacity to give will vary, and that's okay. What's important is that board members demonstrate their leadership of the organization by making their own personal gift each year.
I'm often asked, "How much should board members give?" My answer? A personally meaningful amount. For some, that may be $25 or $250. For others, it could be $2,500 or even $25,000 or more.
So, I hope you'll ask your board members to give this year.
And, more importantly, I hope that 100% of your board members will give in 2018.
Donor retention rate
Donor retention is key to sustainability. This is because it's cheaper and easier to keep an existing donor than to acquire a new one.
Yet most nonprofits have abysmal retention rates. Across the sector, donor retention rates are less than 50%. For first-time donors, it's closer to 20%.
(That means, statistically, only 2 out of every 10 donors who gave to you for the first time in 2017 won't give to your organization again in 2018.)
If you don't know your donor retention rate, you need to calculate it now.
After that, two terrific retention goals for this year would be:
- set a donor retention goal of 50% (or higher, if you're already at the 50% mark)
- set a goal to turn at least 40% of your first-time donors into second-time donors
HOW YOU CAN USE THIS INFORMATION
There are many reasons why so many New Year Resolutions fail.
One reason is because the goal is too vague. Another reason is because there's no action plan. A third reason is because there's no follow-through.
For instance, take the person who wants to "lose weight" this year. A better goal would be to lose 10 pounds by summer vacation in July. The action plan might include walking 30 minutes a day, 4 times a week, plus cutting back on snacks, desserts, and venti fraps. The follow-through includes actually getting out there and walking, then making good choices about eating.
The same holds true for your nonprofit's goals.
You want to create SMART goals (specific, measurable, attainable, realistic, and time-based.)
And you want to create a plan for achieving your goals.
And your plan needs specific strategies and action steps.
Of course, setting the goals and creating your action plan isn't enough. You need to take action and follow through on your plans.
When you do, you're more likely to reach your goals. You, as well as your nonprofit.
So, what about you?
What's your goal for the new year?
What are you going to measure?
And what are you going to get done in 2018?
Need help creating a donor stewardship or retention plan? 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.