While forward-thinking and acting is important, it is also equally as critical to do some analysis of the past year; calendar year-end, particularly, since it is a barometer of the overall health of your development program.
Since I believe that there are several key metrics critical to measuring the health and viability of a development program, I use these same metrics to determine the effectiveness of my client’s calendar year-end efforts.
Here are metrics that I urge you to use as you analyze your development program, as well as some key questions to assist you in your analysis.
Growth in Revenues
An organization should always be keeping its eye on the bottom line growth in revenues, especially in comparison to the Giving USA benchmarks that are released annually. Your organization should be keeping pace with the overall trends found in the report.
In addition to overall revenue, organizations should also benchmark themselves against other key giving indicators as found in the Giving USA report; individual, foundations and corporate giving, and bequests, for example. Is your organization keeping up with the national standards? Other, crucial comparable reporting tools should also be used. In addition to Giving USA, there is also the Fundraising Effectiveness Project (FEP) and giving for small shops, among others.
Did your calendar year-end effort grow in revenues? Did it stay the same or did it even decrease? What were the national trends? And, how does your group compare against them?
Number of New Donors Acquired
Since donor bases naturally attrite each year by somewhere near 10% – through death, address changes, and donors choosing not to give – it is always essential to continue to prospect for, and acquire, new donors. Keeping tabs on how your organization is doing towards obtaining new donors is critical towards this aim. Is your organization bringing in enough donors to compensate for the natural lack of donor attrition?
Did your calendar year-end campaign attract new donors? Are you keeping pace with attrition? Are you bringing in more donors than your organization is losing?
If you are not, you could have a slowly dying development program.
Number of Donors Upgrading
The number of donors upgrading is often the most neglected measurement that organizations measure. However, it is one of the most reliable indicators of increasing donor loyalty and commitment. An organization should monitor the number of donors who are upgrading their giving, giving at the same level, and even decreasing their giving. Lack of donor upgrades might be due to donors not having been asked in a more personalized way (in-person, via direct mail personalization, or telephone) to make an increase. The lack of donor upgrades may also be a result of uninspiring messaging or the connection of a donor with a possible mission interest area.
How many donors moved up the giving pyramid? How many new major donors do you have? How many donors are downgrading?
What I have noted is that many groups focus on donor retention and new donor acquisition but not on donor upgrades. It is important to have all three of these included.
Number of Donors Retained
It is well known that donor retention rates are very low for the industry, especially when compared against for-profit companies. The nonprofit sector has an issue with its donor retention. On average, the national donor retention rate hovers around 48%. Year over year, an organization should monitor its donor retention rate to see whether or not it is increasing, staying the same, or even decreasing. It is important to integrate strong stewardship strategies by adopting a stewardship plan to continue to work toward building donor loyalty. These strategies are especially important for certain segments of donors, such as first-time givers, who are the hardest to convert to donors.
How many donors renewed? How many have you lost? What is the total of gifts that you have not renewed?
Number of Annual Gifts Per Donor
While the above make up the three main components of the health and effectiveness of a development program, an organization should also be monitoring the number of donors who are only making one gift per year. This is not symptomatic of a healthy development program or one that demonstrates strong investment. Efforts need to be focused on increasing the number of gifts made per person per year.
Are donors giving more? Are they becoming more committed to your mission? Are they ready to become monthly donors?
Use the above metrics to take a snapshot of the health of your calendar year-end fundraising efforts to give you an overview of how your fundraising efforts are trending after the most philanthropic time of the year. Use this information to adjust your strategies for this new year and to make your development program truly effective for even more years to come.
And, here are some more resources you may want to check out:
https://developmentconsultingsolutions.com/upgrade-donors-giving-organization/
For a free 30-minute fundraising coaching session, or to learn more about our interim fundraising services, visit us here at www.hireacfre.com or book your fundraising coaching session at http://calendly.com/developmentconsultingsolutions/30min.
Leave a Reply
Want to join the discussion?Feel free to contribute!