3 Big Fundraising Metrics Your Nonprofit Absolutely Needs to Measure

Being “data-driven” is easier said than done. But where do you start? And which fundraising metrics should you measure?

Books, like Data Driven Nonprofits, by Steve MacLaughlin help address some of these concerns, but not all, and the reality is that a lot of the onus to answer these questions isn’t on development staff, but instead on software vendors that provide them with tools.

Fortunately, with a new year among us, it seems we might finally be entering a state where development professionals have the right resources to measure their fundraising metrics efficiently and effectively.

With that in mind, here are 3 fundraising metrics you need to measure right now, at the beginning of the new year. If you do, you’ll be taking the first (of many) steps towards becoming a data driven nonprofit.

Data-driven questions you should answer this week to inform fundraising strategy

  • How many donors lapsed last year? What actions will we take this year to reactivate them?
  • How many new donors did we have last year? What actions will we take to steward and retain them?
  • Where are we susceptible? If we lose one major donor could our fundraising goal be in jeopardy?

3 Big Fundraising Metrics Your Nonprofit Absolutely Needs to Measure

Why are these three questions so important? They hit at some of the most core concepts your organization should focus on:

1. Lapsed donors – No organization is immune from a “leaky bucket.” Knowing how many people stopped donating to your organization last year is critical to set a realistic goal for this year. Plus, (and potentially more importantly), identifying your lapsed donors and knowing who they are empowers you to send out targeted appeals to try and get them back.

I’ve conducted webinars on this concept with my good friends at the Foundation Center. You might find one of the handouts from that event useful; email templates and call scripts for segmented lists.

2. New donors New donors are at the opposite end of the spectrum. These are supporters who had never given to your organization, but decided to give for the first time last year. One question I pose to all development staff is; did you acquire more new donors than you lost? Is your organization growing or contracting?

Having this data at your fingertips is powerful. Similar to knowing who your lapsed donors are, identifying and knowing who your new donors are puts you in a position to leverage that information with targeted appeals and focused retention efforts. Better yet, segmenting new donors by giving level (under $100 new donors vs. $1,000+ new donors) gives you the flexibility to “hyper-target” subsets of donors.

Again, from the Foundation Center webinar I did last year… reference this document for some targeted outreach templates.

3. Managing risk – Revenue concentration (also sometimes called donor concentration or donor distribution) is an overlooked concern at many organizations. How top heavy is your fundraising operation? If one donor (or family foundation, or corporate sponsor, etc.) stops giving this year would that ruin your chances of hitting your fundraising goal?

Visualizing your 80/20 (Pareto Principle) and seeing how reliant your fundraising is on major donors (or one or two foundations) can (and should) be eye opening. The beginning of the year is the right time to address this concern and start measuring how concentrated your revenue sources are.

Now, as a software vendor, I can’t leave you with all this information and not hawk at least one product. You see, most resources out there are expensive, hard to use, and always involve getting on the phone with tech support. Not today. Checkout Fundraising Report Card, the FREE (okay, there is a Pro version, but for what you need today, the free version is a good start) donor dashboard and analysis tool I’d recommend using.

Create a free account, upload your most recent donation data and click on your lapsed, acquisition, and growth dashboards. You should, with a little analysis, have answers to three questions above.

Being data driven may sound intimidating, but if that’s one of your goals in 2018 get off to the right start by answering the questions above.

John Haydon