Knowledge is Power: How the Fundraising Effectiveness Project Can Help Your Organization (Part 1 of 3)

“Although nonprofit organizations usually watch their overall growth-in-giving results carefully, they seldom pay as close attention to the gains and losses that make up those results…
To understand what is really happening … it is necessary to analyze both the fundraising gains and the fundraising losses – in dollars and donors — from one year to the next.”

2012 Fundraising Effectiveness Survey Report

The Fundraising Effectiveness Project enables nonprofit organizations and fundraisers to compare their year-over-year fundraising results and their performance relative to other nonprofit organizations. This information, when understood, can be invaluable to your organization’s future growth.  

Today, we are kicking off a three-part blog series focused on the Fundraising Effectiveness Project (FEP) and how it can have an impact on your organization. We’ll start with an introduction to FEP, then check in next time to take a look at how your organization can participate and benefit from the project, and then wrap up by analyzing the most recent FEP report and how to interpret your results.

The Fundraising Effectiveness Project was created to help grow philanthropy’s share of the Gross Domestic Product (GDP). While that is a pretty lofty goal, its focus has been practical in that it aims to provide nonprofits with tools for tracking and evaluating their annual growth in giving. With the right data and perspectives in hand, nonprofit organizations are empowered to be more strategic with their fundraising strategies. The goal is that everyone wins when overall fundraising grows, which is illustrated by FEP’s focus on “effectiveness” (maximizing growth in giving) rather than “efficiency” (minimizing costs).

To get us started on how this applies to your organization, let’s start with a few questions:

Do you know?

• What your current retention rate is? And how has it changed over the past 3-5 years?
• Of all your donors from 2011, how many gave in 2012?
• How many of these donors gave more, gave less, gave the same amount?
• What about newly acquired donors in 2011 – how did they behave in 2012?
• Do these trends differ for individuals vs. organizations?
• I can keep going…

… What would you do if you did have this information?

The good news is there is a utility in The Raiser’s Edge to pull information that you can use to understand these trends! And at a very local level, you can make use of this information today. I have personally used this benchmarking exercise for many years to help hundreds of organizations understand their past and present state as well as future impact (that’s right, future!) of their fundraising programs.

This plug-in was built in order to allow Blackbaud users of The Raiser’s Edge to participate in The Association of Fundraising Professionals (AFP) effort known as The Fundraising Effectiveness Project (FEP). As mentioned previously, the FEP study was started with the goal of helping grow philanthropy’s share of the GDP. AFP began the program in 2006. Today, AFP provides tools for tracking and evaluating giving trends (“Growth in Giving”) based on gains vs. losses. In addition, AFP is offering training and seminars to help address what they have seen to be the biggest area of concern: Retention!

If you are a Raiser’s Edge user, the tools to assess your performance are literally at your fingertips, but it does take some effort to make an impact. It’s easy for nonprofits to operate in a vacuum and it’s true that every organization is unique, but I’ve seen eyes open, jaws drop, and, most importantly, positive changes occur within organizations when taking a step back to assess overall effectiveness.

Next time, we’ll take a closer look at why you should and how you can participate.