Today’s nonprofits are dealing with a lot of data. It can be tough to make sense of it all and extract the insights that can actually help you evaluate your fundraising effectiveness and plan for the future.
Here are nine key performance indicators (KPIs) you can use to get a comprehensive and objective look at the fundraising health of your organization:
How much money are you raising each year? It’s important to monitor how this number changes so you can determine why this number changes.
The one number you should absolutely have at the top of your mind is how many 12-month active donors you have. It will help you drive projections better, build your budget, and ask for acquisition investments.
Coverage ratio answers the question: Am I bringing in enough new donors or reactivating enough lapsed donors to make sure I’m staying ahead of attrition on my file?
Use this simple equation to determine your coverage ratio:
(New Donors + Reactivated Donors) ÷ Lapsed Donors = Coverage Ratio
Essentially, if your coverage ratio is 100 or above you’re healthy and growing. Anything below that and you may have some challenges on the horizon you need to address.
What does your file growth look like? How many new donors are you bringing in year over year?
Retention you need to look at in different slices. Your rolled-up number may give you a false positive or a false negative. Instead, you should look at each of these areas separately:
What’s the average number of gifts you’re receiving per donor per year?
What’s the average gift amount you’re receiving?
Keep it simple. Look at your donor pool and ask: How many donors upgraded their giving? How many downgraded? How many stayed the same?
Lifetime value is a critical measurement. It can be used to help you determine how much to spend on acquisition and retention.
Here’s a simple formula you can use to determine lifetime value:
Average number of years on file x Average number of gifts per year x Average gift amount = Lifetime Value
Example:
If your average donor has been on file for 5 years, gives an average of 3 gifts per year, with an average gift amount of $25…
5 x 3 = 15 x $25 = $375 Lifetime Value
By taking the time to intentionally measure each of these areas, you can gain significant insight into the overall health of your fundraising program—and how you’re moving donors into deeper levels of commitment and giving.