When it comes to determining the effectiveness of your nonprofit or ministry fundraising program there are SEVEN FUNDRAISING PERFORMANCE INDICATORS that can objectively show you how well you’re doing.
Without these indicators, you are unable to identify areas of success and areas that need attention before things get worse.
While there are many more metrics to be measured and managed, I have compiled a list of my top 7 fundraising Key Performance Indicators (KPIs) that I believe are essential to monitor the overall health and effectiveness of your fundraising program:
- Donor Growth (Year-Over-Year)
With donor growth you need to look at the increase in the number of donors. You definitely want to see steady growth in the number of individuals who support your ministry or nonprofit year-over-year. If this indicator is negative, this shows a significant problem that needs to be addressed promptly.
- Gifts Received
This indicator is simply the number of gifts your organization received within a defined time frame (e.g., month, quarter, or year). If you notice that your number of gifts drops during a specific time of the year, then you can implement initiatives to counter the trend. Gifts received should grow year-over-year as well.
- Average Gift Amount
One of the best ways to improve fundraising results is to increase the average gift amount of the donations you receive. To calculate average gift size, divide your total revenue by the number of gifts you received for the same time period. It will also be insightful to calculate your average gift size by channel (social, direct mail, phone, television, online) or by campaign.
- Donor Retention Rate
Donor retention rate is the percentage of donors who are repeat givers year-over-year. Gaining new donors is always costlier than cultivating existing ones, so you need to track the percentage of donors who continue to donate to your cause after the first year.
Let me give you a good example of why you need to look at all the metrics to get an accurate assessment. Let’s say your nonprofit had 20,000 donors last year and 25,000 donors this year. This can appear that you are doing a fantastic job with donor growth. However, if you lost 5,000 donors this year but gained 10,000 first-time donors, then your acquisition numbers look great, but there’s definitely a donor retention problem.
- Recurring Gift Percentage
You’ll want to track the percentage of donations that are recurring gifts from donors who give multiple times. If you can confidently expect that you’ll continue to receive those gifts and recognize where those gifts are coming from, you may be able to leverage that information and begin a small, targeted campaign to increase gift amounts, increase the frequency of giving, or increase the number of donors who will give recurring gifts.
- Cost of Donor Acquisition
Finding new donors is an ongoing and necessary part of fundraising because you need a consistent flow of new donors if only to replace those donors who leave you every year. Unfortunately, donor acquisition campaigns almost never make money, so you should not evaluate your efforts on ROI%. You need to monitor how well your acquisition campaigns are doing by comparing the acquisition cost per donor by each campaign. The profitability occurs when new donors turn into recurring donors and give multiple gifts.
- Conversion Rate by Channel
This indicator tells you how many donors took an action when prompted by your organization and where they took the action. It’s very helpful to look at donation conversions by channel (social, email, direct mail, TV, radio, etc.) The conversion rate will indicate which efforts are more responsive compared to others.
Let Infinity Concepts analyze and provide a Key Performance Indicator Assessment of your fundraising program.
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