In many ways, fundraising has never been more complex. Multiple generations and cultures, various communication channels, increased competition for dollars, soaring donor expectations — these are some of the challenges fundraisers in nearly all nonprofits face today. And at the same time, they're being asked to do more with less.
So, when it comes to inspiring donors and creating a long-term sustainable fundraising program, how are you really doing?
Answering this question isn't always straightforward. Evaluating your fundraising program's health takes more than comparing yourself to the latest industry benchmarks. Trying to interpret the trends can be overwhelming. You need to dig into your organization's data to get a clearer picture.
The great thing about data is that it’s objective in a sea of subjectivity. Specific key performance indicators (KPIs) can help you determine the health of your efforts. However, you also need qualitative data to turn that information into forward-thinking action. That is, thriving organizations often share common characteristics you can compare to your programs.
Here, we outline both quantitative KPIs and qualitative characteristics you can use to check your fundraising health.
Quantitative Health Check: 9 KPIs to Evaluate Your Fundraising Health
Nonprofits gather a significant amount of data, but what is it actually telling you? To uncover what's happening in your organization, track the right metrics. This will give you reliable insight into the overall health of your fundraising program.
Below, we've identified nine KPIs that can give you a comprehensive and objective view of how healthy your organization is:
- Dollars Raised
- Number of Donors on File
- Coverage Ratio
- Acquisition
- Retention
- Giving Frequency
- Average Gift
- Moves Management
- Lifetime Value
With each metric, you want to look past the number on the surface. For instance, when evaluating the amount of money you raise, it's essential to understand how and why this number changes.
Or, with acquisition numbers, you'll want to know what the new donors look like, where they're giving, and how they're connected to your organization. This data will guide who you target and how you speak to prospects.
Rather than measuring from one campaign to the next or comparing efforts year-over-year, these KPIs enable you to check the pulse of your organization at a glance. You'll get a clearer picture of how well you're moving donors into deeper levels of commitment and giving.
Qualitative Health Check: Characteristics of Healthy Fundraising Programs
The above data points only cover one part of your program health. Now, let's look at the traits we've seen in organizations with vibrant and thriving fundraising efforts.
Some of our most successful clients prioritize relationship fundraising rather than transactional fundraising. They show a clear commitment to making donors feel like partners, which can increase their value over time. These organizations are also transparent about the impact they make and the work they do. They use an omnichannel approach to engage donors, which means all their messages and touchpoints tell a cohesive story.
Healthy nonprofits also have a good balance of diversified revenue sources. Rather than relying on only one or two programs, they have deliberate ways to connect with small, mid-level, and major donors to move them up the donor pyramid. Intentional stewardship helps here. Touchpoints should be sincere, frequent, and consistent — with all donors.
It's crucial to be aware of who you're talking to. Research generational giving to guide your communication efforts. What's more, ensure your outreach speaks to each of the various segments that support your organization. There's no room for one-size-fits-all messaging.
Finally, thriving organizations have a centralized view of their data. For instance, with a tool like GivingDNA, you can visualize the KPIs you're tracking to ensure you use only relevant data to guide your efforts.
Build a Better Plan for Your Fundraising Future
Modern fundraising is complicated, and figuring out where your organization stands can be challenging. Benchmarks are interesting, but it's not always clear what those data points mean for you.
Instead, look at the trend line of your program over five, 10, or even 20 years to better measure your health. Your data, combined with what's happening in your program from a qualitative perspective, will reveal the leading indicators to help you plan for the future.
With these KPIs and characteristics in mind, you can better focus your fundraising efforts and enhance your organization's overall health. Consider these three questions as well:
- How are you measuring success?
- On a scale of healthy to unhealthy, where are you?
- What opportunities should you consider?
Understanding the health of your fundraising today enables you to take greater control of your fundraising tomorrow. It's the first step toward creating a healthier, more profitable future for your organization.
This article is based on our new eBook, "Fundraising Health Check: Strategic Key Performance Indicators to Elevate Your Efforts." To dive deeper, download your free copy today.
