How-To: DIY Fundraising Audit

Jeff Gordy

This week we are proud to announce a direct integration between NeonCRM and the Fundraising Report Card! The timing couldn’t be any better—it’s almost the end of the year, and time to set goals for 2017. To give you a preview of the exciting possibilities of the integration, Zach Shefska, product manager at the Fundraising Report Card, put together an overview of what a DIY fundraising audit would look with NeonCRM + the Fundraising Report Card. Whether you use the integration or not, there are some really helpful tips and key metrics that every nonprofit should be paying attention to! 

Here at the Fundraising Report Card we are data geeks. We like to analyze donor data and find trends, patterns and insights hidden in it. And we really like simplifying complexities. We strive to help you make sense of donor data so that you can concentrate on what you do best—furthering your organization’s mission.

We’ve been consulting with members of the Association of Fundraising Professionals Fundraising Effectiveness Project (AFP FEP) and other leading groups in the industry to make sure we’re including the metrics and reports that will be most helpful to you—the fundraiser.

The Fundraising Report Card is an analytics and insights tool exclusively designed for fundraising departments at nonprofits. And, on top of that, it’s FREE. Thanks to the great team over at Neon, all NeonCRM users are now able to use the Fundraising Report Card and view reporting on their data with just a click of a button!

Sounds great, right? But what makes it useful? The answer lies in the ever-difficult task of doing a fundraising audit. Besides saving time and transforming your data into easy-to-read charts, the Fundraising Report Card helps you see your current and past performance so you can effectively prepare for the future.

Let’s take a look at what I mean!

Why do a fundraising audit

Google “fundraising audit” and you’ll notice there are hundreds of results. Dozens of consultants, bloggers, and firms preaching their way of conducting an audit. Information overload.

The core concept behind a fundraising audit is simple. As per GrantSpace, “Organizations perform a fundraising audit to comprehensively assess the status of their current fundraising efforts, to identify strengths and weaknesses, and to seek out areas for growth.”

In layman’s terms, a fundraising audit is a look in the mirror. Are our fundraising efforts working? What needs improvement? What are we doing well? Where should we invest next year’s budget for the most “lift?” These are all questions a fundraising audit should help answer.

But you and I both know actually conducting an audit to find these answers is undeniably tough. Finding time to collect data, analyze it and come to conclusions can be hard to come by.

Some organizations can afford to spend a few thousand dollars on an outside consultant to do an audit, while others simply can’t. Unfortunately, this seems to be the barrier to entry in the sector.

Smaller, cash-strapped nonprofits simply don’t have access to the same level of analysis that many larger organizations have. Likewise, larger organizations may still not have the resources to dedicate to a thorough internal audit.

And we think that is unfair. It’s 2016. We have self-driving cars and artificial intelligence, so why shouldn’t nonprofits be able to audit their fundraising performance with the click of a button? That was our thinking, at least, when we made the Fundraising Report Card. And now that we are coming to the end of the year, the timing couldn’t be better to do an “audit” to help set your organization’s fundraising goals for 2017.

What to measure and why

If you do your own fundraising audit, it’s best to set some guidelines. Fortunately for us the folks at the AFP FEP have already done most of the heavy lifting.

Since 2003 the AFP FEP has published a “Glossary of Terms” for its members and the public. (Some of us here at the Fundraising Report Card even helped to revise the definitions!) It’s great because it establishes fundraising metrics that really matter. The downside is that it doesn’t specify which of the metrics are most crucial to track.

That’s okay though, because for a fundraising audit there are a few “common” metrics and reports you’ll want to analyze. Fortunately, we calculate all of these metrics in the Fundraising Report Card for you. Here’s the short list that we recommend, especially when it comes to doing a year-end review:

  • Retention Rate
  • Donor Lifetime Value
  • Donor Acquisition
  • Lapsed Donors
  • Overall Growth


Retention Rate

Neon CRM - Fundraising Report Card - Retention Report

A retention report will show you the number of ($) donations or (#) donors from last year who gave again this year to your organization. First, retention refers to a certain point in the donor lifecycle and it can come at different points for different organizations: it could be monthly, quarterly, or annually. The Fundraising Report Card calculates retention annually (year over year).

Second, there are two different ways to calculate retention:

  1. Donor Retention Rate
  2. Donation Retention Rate

For a year-end fundraising audit you will want to look at both.

Donor retention rate is the number of donors your organization has kept with respect to the number it had at the start of the previous year. This does not count new donors. To calculate donor retention rate, take all retained donors in a year and divide that by all donors from that same year. Your formula will end up looking like this:

Donor Retention Rate = Retained Donors ÷ All Donors

Donation Retention Rate is basically revenue renewal values – the dollars that renew – and is generally measured on an annual and/or cohort basis. The Fundraising Report Card calculates donation retention rate annually.

The important point here is that Donation Retention Rate focuses only on the moneythe actual revenue your organization retainsrather than donors. So if your existing donors start giving more through upgrades, your Donation Retention Rate might grow even if you’ve lost some donors. This formula looks something like:

Donation Retention Rate = Retained Donations ÷ All Donations

We’ll dive deeper into the type of trends you should look for in another post, but for today we will simply calculate both of these metrics so that we can set a goal for the new year.

Ideally, you’ll want to look at at least 3 years of donation and donor retention rates to set a realistic goal for 2017. You may also want to take advantage of the Fundraising Report Card’s calculations for retention rates across giving segments, so you can set goals for each fundraising department (major gifts, annual fund, etc), as well as for the entire department.

Donor Lifetime Value

Neon CRM - Fundraising Report Card - Donor Lifetime Value Report

Lifetime Value or LTV is a prediction of how much money you can expect to receive from a donor before they churn. This metric is crucial to track and measure each year. The formula for LTV is relatively simple:

LTV = Donor lifespan × Average donation amount × (Total # of donations ÷ Total # of donors)

Okay, maybe it isn’t that simple. But then again, that’s why we built the Fundraising Report Card!

What’s great about LTV is that it provides a clear picture of who your donors are, in the sense that it highlights the gross value (revenue) they will supply your organization over the lifetime of their giving. If you’re interested in diving even deeper into the importance of LTV I suggest you take a look at this blog post.

To set the baseline for 2017 you will want to calculate your donor LTV for last year. Just like retention, it is good to look at LTV over at least a 3 year period. Then, just like with retention, you’ll want to set a realistic goal for your department to hit!

Donor Acquisition

Neon CRM - Fundraising Report Card - Acquisition Report

An acquisition report will show you the number of ($) donations or (#) donors in any given year who had previously never given to your organization. When it comes to planning for success in 2017 your acquisition report is your best friend.

First, your acquisition report will help you set a realistic goal for how many new donors you should aim to acquire in 2017. And second, your acquisition report will highlight exactly who your “retention” marketing should target.

The cheapest, and easiest way to increase donations (revenue) is to retain and upgrade existing donors. The donors your organization acquired in 2016 are perfect recipients of targeted marketing efforts in 2017.

What’s great about the Fundraising Report Card is that it breaks down acquired donors by giving segment. So, for example, if you wanted to know exactly who you acquired in the $100 and under segment you can simply click that part of your report and export those donor IDs. There is your list for targeted engagement marketing for 2017.

The same goes for mid-level and even major donors. You’ll not only want to analyze acquisition to find trends and set goals, but also to segment lists for direct mail or email campaigns.

Lapsed Donors

Neon CRM - Fundraising Report Card - Lapsed Report

The opposite of your acquisition report is your lapsed donor report. This report shows you the number of ($) donations or (#) donors from last year who did not give again this year to your organization.

Although it isn’t as fun to look at lost donors, it is arguably more important. You’ll want to analyze lost donors and lost revenue in 2016 and use that as your benchmark for 2017.

And, just like with acquisition, you’ll want to use segmented analysis of your lapsed report to target your marketing activities. Wouldn’t it be great to add some of your lapsed donors back in 2017 and see them in your reactivation report?

Growth Report

Neon CRM - Fundraising Report Card - Growth Report

An overall growth report will show you the aggregate amount of ($) donations or (#) donors in any given year at your organization. This may be the most simple and straightforward report in your “DIY” fundraising audit.

Although there are dozens of intricate and granular metrics you can track each year, it is sometimes best to take a step back and look at the big picture. That’s what your growth report helps you do.

You’ll want to visualize your total donor count, and total donation revenue for the past few years so you can make an informed decision on what your goals should be for 2017. You may even want to do a “velocity” analysis, which is simply a fancy way of saying how quickly your organization is growing.

By analyzing your 2014, 2015, and 2016 percent change in growth you will be able to make a data-driven decision on what your goals should be for 2017. And again, like most of the reports in the Fundraising Report Card, this is broken down by segment so each department can find their own benchmarks for growth.

Tying it all together

As 2016 comes to a close there has never been a better time to start keeping track of these fundraising performance metrics. Plus, with advances in technology it has never been simpler and more convenient.

In the past you may have needed to be an Excel master, but now you can simply click a few buttons in your Neon dashboard to get your Fundraising Report Card and be finished.

Setting a benchmark for success in 2017 is a worthy task, and using data to help drive the discussion can be a powerful tool!

Interested in trying out the integration? Click here to learn more about how NeonCRM and the Fundraising Report Card can work together!

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