Is Your Development Office Measuring the Right Metrics?
You can’t increase fundraising results if you aren’t measuring results in the right way, measuring the right things, or even measuring results at all.
One of the things we’ve found in our research, and from the anecdotal experiences we’ve shared with thousands of development professionals in workshops and webinars, is that so few development offices measure the right things or, even worse, measure anything at all.
This is one of the lessons nonprofits can learn from the business world–measurement is critical for improvement.
Some basics every nonprofit should be measuring include:
total dollars raised through fundraising
total dollars raise in each category of fundraising, for example — grants, corporate funding, special events, direct mail, telephone fundraising, in person fundraising, and online fundraising
total number of new donors attained each year
total number of donors who increase their giving this year
total number of donors who decreased their giving this year
total number of donors who stopped giving this year
total cost of fundraising program
In order to measure these things, you need to have a good software system, and you need to set up measurement tools in advance of all your fundraising programs.
For example, let’s say you’re conducting your annual mail appeal. Do you know how much each donor gave last year? Have you coded the response envelopes so you know which mailing prompted the responses received? (Donors may actually hang onto response envelopes for months or even years, so they might not be responding to the appeal most recently sent.) Did you ask donors to increase their gifts, and by how much? Then, measure results after the program. Did donors respond with an increased gift? Did they decrease their gift or stop giving? How many gifts stayed at the same level as last year?
It’s important to remember that you can measure things “upstream” and “downstream.” These are called leading indicators and trailing indicators. Trailing indicators are generally measured more than leading indicators, but both are important.
Trailing indicators would include things such as:
total number of grants received this year
total dollars netted at our special event (gross profits are one thing, but you have to measure costs as well)
total number of planned gifts received
Leading indicators include items such as:
number of visits to major gift donor prospects made this month
number of major donors who attended our cultivation event and will be added to our prospect list
total number of potential grant funders researched
Leading indicators are often forgotten. But they are just as important as tracking actual dollar results, in fact, maybe even more important. For example, you can meet your dollar goals this year, but if you don’t have a pipeline of prospective doors to focus on next year, what happens when you lose a current donor? There is no one to replace that donor.
Remember though, it’s not just about the dollars. You should be measuring things such as number of donors in your pipeline, number of grant proposals being written, and percentages of your database to give at all. This is especially important for newer development offices that do not have a track record to help set monetary goals.
If you set your goals based only on dollars raised, it is easy to get depressed when those goals are not met. And it is harder to explaining to management why dollar goals might fall short.
If you have both monetary and non-monetary goals, it will be easier to see progress in some areas when others fall short. As long as you know why those goals were not met and what you can do to correct the situation in the future, you will feel more control of results.
So don’t forget to measure, measure, measure, both before and after the fundraising transaction, and both monetary and non-monetary goals.
Linda Lysakowski, ACFRE has authored more than a dozen books, including Fundraising for the GENIUS, now in its second edition, and serves as Acquisitions Editor for CharityChannel Press and For the GENIUS Press. She has over 20 years experience as a philanthropic consultant and is one of fewer than 100 professionals worldwide to hold the Advanced Certified Fund Raising Executive designation.