A nonprofit metric is a standard of measurement, most often represented with numbers. A number has little ambiguity on its own, but alongside other numbers, the meaning of that number can become less clear. In nonprofit management and fundraising there has been a strong move towards more emphasis on acquiring and demonstrating activity by metrics. While this is a good idea, figuring out what those numbers are and what they mean can be scary.
To make better sense of the metrics, let’s ask the following questions:
- What are you measuring?
- What do you want or expect those numbers to tell you?
- How will you go about acquiring those numbers and verifying them?
Metrics don’t mean anything until they are connected to some activity that means something to someone. They need to illustrate a trend or a pattern of behavior. They can provide some insights on what is a more effective method of fundraising for you, how things could be more efficient within the organization and streamlined communications with donors.
Metrics involve your fundraising, your programming, your board activities, your volunteers and events; use them smartly and they can be enormously revealing.
Three Basic Types of Metrics:
Impact measures: Metrics aligned with the long-term focus or mission of the organization. How many kittens did you rescue, how many houses were built, how many tons of trash were taken from the river?
Activity Measures: Metrics aligned with the day-to-day operational effectiveness of the staff. How many outreach calls ere made, how up to date are the financial reports and evaluations, how many fundraising calls have been made?
Capacity Measures: Metrics aligned with funding, fundraising, and resource mobilization. This is a tough one, some of these measures are not so clear and numerical. Frequently though, impact measures are oftentimes the most difficult to define, but essential to securing new funding and ensuring the organization’s long-term viability. These are the numbers funders look at when considering significant continuations.
9 Types of Typical Nonprofit Measurements:
1. Cost Per Dollar Raised (CPDR) :This answers a very simple question: Did we raise money, lose money, or break even?To determine cost per dollar raised, divide expense by revenue for the given fundraiser you’re examining (event, direct mail appeal, etc.). If the expense and revenue are equal, you broke even and don’t need to carry out any calculations. If expense is higher than revenue, you lost money.
Example: Imagine you held an event that cost $500 and raised $2,000. Just from looking at the dollar amounts, you know you made money, but if you want to see the exact cost analysis you would do as follows: $500/$2,000 = .25 In this instance, for every dollar you raised, it cost your nonprofit $0.25.
2. Fundraising Return on Investment (ROI): is very similar to CPDR. Instead of dividing expenses by revenue, you divide revenue by expenses. Once you’ve divided the two amounts, a number greater than one indicates that you’ve raised money.
Example: If your total revenue was $2000, and it cost $500 to produce the fundraising campaign, you would divide $2000/$500 = 4, or your return was 4 times your cost.
3. Donor Retention Rate: how many donors do you retain on a year-over-year basis? The donor pool grows through acquisition, but you maintain them through retention. The two sides of the fundraising coin work best in conjunction. This is one of the Holy Grails of Fundraising and Development, once you obtain a new donor, hanging on to them.
Ideally, your acquisition and retention rates should be improving concurrently, but this can be tough to do. However, its been my experience that many nonprofits place much stronger emphasis on acquisition than retention, even though it can cost over 7 times as much to acquire a new donor than to maintain a current one.
4. Number & Amount of Gifts Secured: How many gifts did your organization secure this the month, last quarter, and the full year? This can include the total number of donors, the total amount of money raised and the number of separate donations. This will also track the growth of donations. Separating the gifts by type will give greater detail to where and from whom the greatest giving comes.
5. Average Gift Size:To calculate average gift size, divide your revenue for a certain fundraiser or time period by the amount of gifts you received in that same window. It can be very revealing to see what kind of solicitation generates what size of response, and if one campaign or another is growing, decreasing or not changing.
The same concept should be applied if you have a major gifts or planned giving program.
6. Frequency of Contact with Donors: A good place to start is by looking at what you’ve done thus far, i.e. how often you contact donors and in what ways. Direct mail, email, newsletters, invitations, surveys?
One of the most frequent discussions among fundraisers is how much is too much, or too little, contact. It is important to ask clearly and regularly, but what is annoying and what is only communicating when there is a fundraiser going on? Consider the many avenues of communication you use, and the number of times there is any ask.
7. Fundraising Participation Rate: With this performance indicator, track how many event participants raise funds in peer to peer fundraising.
For example, a participant in your road race who paid an entry fee is not a fundraiser. However, if that same participant gathered pledges in addition to the entry fee, (s)he is then a fundraiser.
Donors and members who donate and double as fundraisers are invaluable assets. Examining this data can tell you if your organization is missing out on the opportunity to strengthen your existing connection with this donor to nurture that relationship.
8. Email Conversion Rate: Emails are way too free and easy to send out. Since so many organizations take advantage of that, being seen and heard through email is tough. We all get too many emails, and daily triage can be hazardous. Standing out in an inbox is challenging enough, and that is if you make it past the spam filter.
Specifically, watch the open and click-through rates. ( Open is just what is says, they took a look; click-throughs mean they clicked on some part of your web age.) Look for trends among the emails that have high rates in those regards: which subject lines and which type of content gets more eyeballs than others?
You can see when emails get opened- which times and days get the most response. You can then tailor your topics and timing to improve and increase your open rates.
9. Email Opt-out Rate: Tracking opt-out rate will help you avoid being labeled as a spammer. If too many people unsubscribe to your newsletter, you’ll start getting filtered out more and more. The best way to avoid a situation like that is to track and be sure to remove them from your mailing list promptly.
Let your numbers work for you: by asking the most relevant questions of your organization, developing accurate and meaningful metrics is not all that daunting; they are a strong management and fundraising tool.
Let us help you wrangle some of thee digits and show you how easy and helpful they will be to your goals. 310 828 6979
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