A guest post by Sarah Tedesco of DonorSearch
Picture this: Isabella is the executive director of Academic Stars Network, an organization dedicated to tutoring at-risk high school students in STEM subjects. She’s worked for years to deliver high-quality programming and services to local students, teachers, and parents.
One day, during a meeting with the board of directors, a discussion arises about the need for more data-backed decision-making for the organization. Isabella realizes that Academic Stars Network lacks a strategic approach to evaluating the effectiveness of its initiatives and measuring its overall impact on the community. She and her team decide that it’s time to start tracking metrics for different aspects of their operations—but they aren’t quite sure where to begin.
Many nonprofits find themselves in this same position—wanting a better way to understand just how much of a difference they’re making, but unsure of how to measure success metrics, also known as key performance indicators (KPIs).
In this short guide, we’ll help you get started with choosing metrics for your nonprofit to measure its progress, whether you’re looking to improve your website’s performance or boost your donor retention rate. Let’s begin!
Review your long- and short-term goals.
When it comes to selecting metrics, it can be tempting to simply select a few and begin to gather insights just for the sake of having insights. But this can lead to information overload, giving your team an overwhelming amount of data to organize and analyze.
Instead, start the process by reviewing your organization’s long- and short-term goals. Aligning your metrics with these goals will help ensure that your team gets the insights that it needs on the most important aspects of your organization’s operations.
For example, say that you have a goal to increase the number of major contributions your organization receives each year by 20%. With this goal in mind, you could consider tracking metrics related to donor acquisition, average gift size, and donor engagement.
Similarly, if your organization wants to improve its Google Ad Grant results, you could start to more proactively track metrics related to your performance online, like the conversion rate on your website landing pages.
Selecting your metrics based on the goals you’re currently working toward will empower you to reach those goals faster as you track your progress and use what you learn to course-correct and improve your efforts to meet your goals.
Consider different metric focus areas.
You might be thinking, “I know what my goals are and what parts of my organization I’m hoping to improve. But what are my options for measuring my progress?”
It’s a good question. The short answer is that if it can be measured, it can be turned into a metric you track over time and use to work toward a goal. The long answer is this: There are many different metric focus areas that you can consider as you choose your own metrics to track.
According to DonorSearch, here are some of the most popular focus areas and a few examples of metrics within those areas:
- General fundraising metrics: cost per dollar raised, fundraising return on investment (ROI), number of gifts secured, matching gift rate, pledge fulfillment rate
- Donor relationship metrics: donor retention rate, donor churn rate, donor lifetime value, donor acquisition cost, demographic metrics
- Giving level metrics: gift frequency, average gift size, average giving capacity
- Engagement metrics: donor or prospect outreach rate, fundraising participation rate, number of asks made
- Online performance metrics: online gift percentage, email open rate, landing page conversion rate, social media amplification rate, social media applause rate
In addition to these focus areas, you could also look at metrics related to your volunteer program, such as volunteer hours tracked or volunteer acquisition rate; or your events, such as number of event registrations, event attendance rate, and revenue raised. Or, if you’re looking to make improvements to your internal operations, you could focus on metrics like your employee retention rate.
Remember, you don’t want to try to track every metric at once—this will lead to the most important insights getting lost in a sea of information. Instead, choose one focus area to look at or a handful of metrics from a few focus areas.
Determine how you’ll measure your metrics and how often you’ll review them.
Once you’ve selected the metrics you want to track, you still have a few steps to take to set your team up for success. Prepare to get the most actionable insights possible by asking yourself these two questions:
1. What tools will we use to measure and calculate our metrics?
With the right tools, your team won’t have to calculate its metrics by hand and risk errors that could derail your insights. Choose your tracking tools based on the metrics you want to measure.
For example, if you’re tracking metrics related to your major donors and their capacity and affinity markers, you might rely on the help of a nonprofit-specific AI tool to help you gather those markers and make predictions about your prospects and donors.
2. How often will we review our metrics?
Dedicate time to reviewing your metrics on a regular basis. You may do this at the beginning of a fundraising campaign and then again at the end, or at specific times of the year, like at the beginning and end of each quarter.
It may also be helpful to set baselines and thresholds for certain metrics so that you know when to act on the information. For instance, if you start tracking your virtual event registration numbers and see a jump from your baseline number of attendees to your threshold for action, you could take the time to evaluate what made this positive change possible—and keep doing more of it!
As you begin tracking your chosen metrics and getting into the swing of consistently reviewing them, remember to give yourself enough time to see change. Just like waiting for a plant to grow or a pot of water to boil, time has to pass for you to notice changes in your metrics. Be patient as you start your tracking journey—it will pay off as you’re able to identify consistent patterns and trends that you and your team can act on.
Metrics empower your organization to point to specific, quantifiable measurements that illustrate your nonprofit’s progress toward a certain goal, whether it’s a goal related to fundraising or strengthening donor relationships.
Start your metric-tracking journey today by following the three steps outlined above to select the right metrics for your nonprofit and to set yourself up to see changes and trends over time that you can take action on. You’ve got this!
Sarah Tedesco is the Executive Vice President of DonorSearch, a prospect research and wealth screening company that focuses on proven philanthropy. Sarah is responsible for managing the production and customer support department concerning client contract fulfillment, increasing retention rate and customer satisfaction. She collaborates with other team members on a variety of issues including sales, marketing and product development ideas.