When it comes to measuring the success of your nonprofit, identifying the right key performance indicators (KPIs) is everything. Your nonprofit serves a purpose: to benefit a charitable and worthy cause. Like any organization, the first step to making your nonprofit successful is defining success. What is your organization’s mission? More importantly, how will you know when you’ve fulfilled it? The answer to these questions will shape your KPIs for nonprofits, and in return, your KPIs will help your organization be successful.
When it comes to measuring #nonprofit success, identifying the right #KPIs is everything. Click To Tweet
Fundraising KPIs: The Backbone of Nonprofit Success
Financial support is the crux of nonprofit success, and fundraising is one of the most effective ways to secure giving. As a player in the nonprofit field, you probably know how much money your organization brought in last year, along with your goals for the coming financial quarters. In order to reach those goals, though, you need to establish a realistic baseline using last year’s data. Important fundraising metrics for nonprofits include:
- Gross donations for last year
- How you received these donations
- Where you received the donations from (geographically or following an event)
- Average donation size
With this data, you can set new fundraising KPIs for the future. If you received X amount last year and want to increase donations by 25% in the coming financial quarter, your financial metrics and KPIs should answer these questions:
- Is the organization on pace to increase donations at the desired rate?
- Does the average donation size support these financial expectations?
- Is each donation channel yielding enough support to meet your goal?
Part II: The Value of Donor Retention
According to Urban Institute, donor retention is important. In fact, retaining a donor is generally less expensive than prospecting a new one, studies show. Some nonprofits see as many as 70% of their donors return the following year, but these are the exceptions. In reality, roughly 98% of nonprofit organizations see less than 10% of their donors return. In other words, if your nonprofit is like most, setting a donor retention KPI is more than important – it’s imperative.Roughly 98% of #nonprofits see less than 10% of their donors return. Lets fix it! Click To Tweet
Why are repeat donors more valuable than new ones? The short answer is overhead. Prospecting for a new donation takes more time, money, and resources because it requires you to advertise your nonprofit to a larger audience. Like any advertising, you’ll position your cause to people who simply aren’t interested. By advertising to people who’ve given before, you shorten the conversion funnel considerably.
The Nitty Gritty Numbers: Pledges vs. Giving
You know how much money you’ve raised, but what about that other number – the number of people who pledged to give but couldn’t. The idea of a dropped pledge is daunting, but that doesn’t mean you should avoid planning for it. If you have a general sense of how many people ended up giving to your cause last year, dig a little deeper to find out the exact number – then set improvement KPIs based on this information.
Key factors in building a higher percentage of fulfilled pledges:
- Understand why people pledged and didn’t give
- Clearly document pledges received, especially for larger gifts
- Present a clear timeline for payment at the time of each pledge
- Maintain communication with those who have outstanding pledges
While a 100% pledge-to-donation ratio is ideal, it may not be realistic. This doesn’t mean you shouldn’t set a KPI for the percentage of pledges that turn into donations. Once you’ve set a goal, track the additional factors that contribute to it and continually revisit your strategy to improve this metric.
While You Help Others, iDashboards Can Help You
iDashboards uses data reporting technology to empower nonprofits to reach their goals. If you know what success looks like for your organization but don’t know how to get there, we’d love to share a 30-day trial with your nonprofit for free.