Fundraising Performance Metrics: How to Analyze Donor Data for New Strategies
Getting started with a new strategy can be unnerving, but that’s why fundraising performance metrics can help point you in the right direction.
Fundraising is the most crucial aspect of any nonprofit organization. Through the commitment of benevolent donors, nonprofits are afforded the ability to fulfill their causes and make their mark on the world.
And while nonprofits will always have an abundance of donors who have an affinity for their organization, fundraising isn’t a cake walk. The process of raising funds is never-ending; it requires experience and comprehensive knowledge of your donors to be successful.
Certain fundraising methods or strategies that may have worked several decades ago are now outdated, forcing nonprofits to adapt. Jumping into new strategies can be risky business before consulting the mounds of data at your disposal.
Check out these critically important fundraising performance metrics to help you put together an expertly-crafted fundraising strategy.
Common Fundraising Performance Metrics (KPIs)
Key performance indicators (KPIs) are designated metrics which demonstrate how an organization is meeting their goals and objectives. For nonprofits, these metrics can vary since no two organizations are alike — defining success will depend on established goals.
However, there are several of these metrics which are somewhat universal in their value for nonprofits.
- Donor Growth — Whether it’s year-over-year or analyzing other spans of time, nonprofits need to know whether the number of donors is growing or shrinking. Donor growth should provide insights as to whether donor acquisition efforts are working.
- Donor Retention Rate — Donor retention is its own concentration and can have unique KPIs that run parallel to fundraising. However, tracking donor retention rates is important because recurring donors are incredibly valuable. It costs far less to cultivate a relationship with recurring donors than to acquire new ones. For nonprofit organizations, the majority of gifts come from recurring donors rather than first-time donors.
- Fundraising ROI — Return on investment isn’t exclusive to the business world as nonprofits must also track returns on money spent to acquire donations. This metric will demonstrate whether your investments have paid off in a meaningful way towards reaching fundraising goals. Related to fundraising ROI, calculating donor acquisition costs is also valuable to have on hand when crafting a new strategy.
- CPDR — Cost per dollar raised (CDPR) is very similar to fundraising ROI, it’s just a slightly different KPI to analyze. The goal is to understand the value gained in donations by way of explicit spending.
- Pledge Fulfillment Rate — There is always the possibility that a pledge won’t follow through with a donation. Tracking pledge fulfillment rates can offer a better understanding of why a donor doesn’t give or what measures can ensure they fulfill their pledged amount.
- Donor Lifetime Value — This is a slightly advanced metric to keep track of, but it is an alternative metric to examine across multiple donor segments. To calculate, take a donor segment’s average number of years on file, multiply by the average gift amount and the frequency of donation. Donor lifetime value is essentially a metric which aims to quantify how much in fundraising you can expect to receive from a donor.
With more fundraising performance metrics to choose from than the ones listed above, it’s important to remember that every nonprofit will have their own methods of defining success. Your organization has tons of data that can assist in making important decisions regarding your fundraising strategy.
Where to Start — Analysis
A lot of what you want to know is in the data associated with your donors.
By analyzing your donor database, you will discover who are your most valuable and loyal recurring donors. Such analysis will shed some light on how your organization can improve fundraising totals by segmenting these donors into relevant categories.
Here are just a few examples of how to maximize the value of your donor database:
- Identifying donors who consistently give the same amount every year; how can we engage or incentivize them differently to give more?
- Re-engaging donors who were active in the past, but who have become disconnected in recent years.
- Collecting specific giving history data and including in annual/periodic pledge reminder letters, customized for individual donors.
- Using demographic data (income, education level, age, etc.) to identify which groups should be of focus for outreach efforts or specific campaigns.
By analyzing a complete archive of donor data, nonprofits can implement efforts to deepen relationships with recurring donors. There’s a lot of potential to re-engage former constituents as well as applying lessons learned when acquiring new donors.
Applying Insights to New Efforts
Just note that donor data analysis can be pretty tricky to accomplish if most of that data doesn’t reside within a single database. Many nonprofits house their donor data across multiple systems of record, both of the digital and analog varieties.
Consider the case of Dexter Southfield School from Brookline, MA; their goal was to target school alumni to increase fundraising goals. Once the school integrated their mountain of data from countless sources, analysis became much more straightforward to discover new opportunities.
For a single athletics initiative alone, the school raised roughly $12.6 million by targeting alumni hockey players and offering them an opportunity to purchase a seat in the new ice rink.
Beyond examining donor data, nonprofits should also look at fundraising campaign data to be more successful in future efforts. Start by finding the answers to questions about specific campaigns.
Were our goals met?
Why or why not?
The aim is to see how certain campaigns contributed to several of the vital fundraising KPIs. Assessing these metrics in tandem can uncover new ideas about what works and if experimentation is worth a try.
Fundraising Performance Metrics in Raiser’s Edge
With no debate regarding the value fundraising performance metrics can have, nonprofits must put their learnings into practice. But before pivoting or creating a new strategy from scratch, it can be difficult to know where to look for this data.
As one of the best solutions for managing donor data, Raiser’s Edge and Raiser’s Edge NXT have several considerations worth exploring for fundraising analysis.
One area often overlooked within Raiser’s Edge is the “Demographic & Statistical Reports” which allows users to filter by fields and columns and view a breakdown in each of those areas.
For example, you could choose to view a given gift population by selecting the following:
- Constituent Code
- Constituent Solicitor
If you want to go broader, the same reporting function can assist in drilling down to compare and analyze key pieces of data for performance and goal creation.
By selecting a field area, you can view:
- # of constituents
- # of donors
- # of gifts
- # total given
- # average given per donor
- # percent of participation
- # percent of total given
No matter how granular you want to get or what fundraising performance metrics matter most to your nonprofit, data collection and analysis should be extremely high priorities. If you’re going to guarantee the success of future fundraising efforts, data is the tool to make your organization exceed its goals.
Emphasizing the value of your nonprofit’s fundraising data is the first step in creating a formal process for analysis. By examining those defined success metrics, your organization will have a foundation on which to build new campaign strategies. Doing so won’t just raise more money for your organization; with data-driven analysis and decision making, you have a real opportunity to create lasting, meaningful relationships with donors and constituents.