Our Top Five Favorite Metrics for Monitoring Your Nonprofit’s Health

Ronnie Gomez

We here at Neon believe that data is a beautiful thing – but like all great beauties, it can be a little intimidating at first. When looking at a sea of numbers and percentages, it can be difficult to figure out what to do with it all.

That’s why we’re dedicated to making your data both easy to find and easy to use. It’s also why we chose to include the Key Performance Indicators (KPIs) widget in our software’s Mission Control Dashboard.

Fundraising Effectiveness Project KPIs Dashboard

These stats may look like just a bunch of numbers, but they’re actually 14 critical indicators for your organization’s health, as defined by the AFP Fundraising Effectiveness Project. They serve as benchmarks to help you fine-tune your fundraising for maximum success.

But how do you take those numbers, and translate them into action items? That requires a little bit of deductive reasoning. We know it can be tough to figure out where to start, so we pulled our top five favorite metrics for monitoring your nonprofit’s health, and some ideas on how to put them into action.

Let’s get to work.

Your donor retention rate gives you a look at the strength of your organization’s support. Simply put, it’s the percentage of donors who gave last year and also decided to give this year. These are the people that are priming up to become your long-term supporters, so the higher this percentage, the better.

Unfortunately, according to the FEP, the 2017 overall donor retention rate was just 45.5 percent across nonprofits. That means that no matter how big your organization is or what mission you serves, chances are there’s room for improvement.

If you want to see some improvements in your donor retention rate, consider your stewardship campaign. Do you have a set plan in place? If not, outline a formalized policy for what steps need to be taken after somebody makes a donation. Follow up communications should include thank you messages, impact reports, and news updates.  

This is also a great opportunity for some creativity! Maybe you could do donor shout-outs in an organization newsletter, or make an MVP board at your organization’s facility. The more appreciated a donor feels, the more likely they are to give and give again.

New Donor Acquisition Rate shows you how well your organization is attracting those shiny, new donors. This is particularly important because, unless your donor retention rate is 100% (we can dream!), chances are you’re going to need to think about refilling that well.

Now, as you may know, attracting new donors can cost a pretty penny. Marketing materials don’t come cheap! That’s why it’s important to share this number with whoever is handling your communications initiatives. They can use it to measure the success of their messaging.

If your goal is a higher new donor acquisition rate, you may want to think about how you’re targeting millennials. Contrary to popular belief, the oldest millennials are already hitting their late 30’s. That means they’re full-grown adults who often participate in charitable giving. If you’re not marketing your organization to them, you’re missing out on a lot of fundraising opportunities.

#NeonNonprofitTip: Millennial donors are extremely responsive to strong, cohesive branding. If you’re not sure how you’re performing in that arena, perform a self-audit on all your digital presences, including your social media.

We like to call average gift the ‘pumpkin spice’ of KPIs because, well, it’s pretty basic. As its name implies, it’s the average amount your donors give. While it may not seem like much, it can be extremely helpful – you just need to know how to use it.

For example, if you look at your average gift paired with your donor retention rate, you can gather a pretty solid estimate of what you can expect year-over-year. Say your average gift is $100, and you have a 50 percent donor retention rate. All you have to do is multiply the $100 amount by half of last year’s donors. Now, you have a baseline expectation for this year’s fundraising.

And that’s not all it can do! If you’d like a closer look at your constituent’s donation habits, try calculating average gifts across segments. That can help you identify groups that may be giving more often or in larger quantities.

At the very least, you should be tracking your average gift size periodically, so you can see whether it’s rising, falling or becoming stagnate.

#NeonNonprofitTip: If your average gift is being skewed by one major donation, it might be in your best interest to exclude that from data. That will provide you with a more accurate assessment of your average gift per donor.

Growth in giving is certainly one of the more difficult KPIs to track, but it also serves as the best indicator of your overall health. Basically, it tells you if your organization is growing.

Monitoring growth requires a deeper dive than just looking to see if you’ve hit your campaign goals. When you’re working in the weeds, growth can seem almost guaranteed, After all, if you’re always busy, how could you not be growing?

Unfortunately, that’s not always the case. That’s why organizations use growth in giving to determine whether or not they are truly expanding their footprint within the nonprofit industry.

Industry averages for this data point tend to vary. The Fundraising Effectiveness project has even broken out the benchmark by organization size and type. If you’re not sure how well those statistics apply to your organization, the best thing you can do is compare against your older metrics. Compare where you are now to where you’ve been, and you’ll know if you’re moving in the right direction.

Conversion rates measure how well your appeals are performing, based on how many people felt compelled to act because of them.

You can look at your conversion rates by a specific appeal, an overall campaign, or its delivery method. Regardless of how you segment your data, it’s important to relay your findings to your communications and development teams. This can help drive both effectiveness and efficiency.

For example, if you’re spending a lot of money on a direct mail campaign and your conversion rate is leaving much to be desired, you might want to consider changing the campaign or scrapping it to re-allocate those funds. Remember, if it’s not converting donors, then it’s probably not the best use of your time.

So there you have it.

Now you have all the basics you need to take your data and turn it into actionable insights. Interesting in learning how you can use all 14 KPIs to streamline your operational processes, fine-tune your campaign strategies AND optimize your overall fundraising?

We thought you might be!

Check out our newest ebook, Putting Data Into Action. Inside, you’ll find all our favorite tips on benchmarking your nonprofit’s performance and creating action plans that drive results. 

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