Use Your Nonprofit's Stats to Improve Fundraising Outcomes

You have and actively use a donor management software system. You’ve been diligently adding new contacts, tracking donations, and communicating with donors and prospects. Each time you send an appeal you track your expenses and the received gifts that can be attributed to that appeal. You use this formula to determine if your expenses-to-revenue ratio is reasonable: Costs divided by gross income equals the cost per dollar raised (CPDR). All of these actions are solid best practices. 

Then what? There are plenty of metrics you can and should review on a regular basis to determine if your fundraising actions are working well. One metrics report I consider indispensable is the year-to-year comparison.

Year-to-Year Evaluations

For-profit companies in retail call this type of evaluation the same store sales report. In that case, retailers look at sales numbers from each unique store during a given period of time this fiscal year, compared to the same specific stores during the same given timeframe last fiscal year. Looking at the same stores’ sales for the matching timeframe each year creates the opportunity for data-driven decisions that can drive future performance. 

It is similar for nonprofits in that we break our incoming funding down into sources and timeframes. You may look at each month, quarter or the whole year and compare it to the same month, quarter or the whole previous year to determine if this year was up or down. 

Related story: Measuring Impact: 5 KPIs Your Nonprofit Needs To Be Tracking

Comparison Reports

When you do such comparisons for more than two years at a time, it really allows you to see trends — and anomalies.

For example, if your nonprofit received a one-time gift of $100,000 from a donor who won the lottery, that is of course wonderful. But, you would not then expect to include that $100,000 in your projections for the coming year, because you’ve already been notified that it was a one-time gift. 

When you look at three to five years of data side by side, it can show you trends in which types of fundraising may be increasing, what may be decreasing, and which are holding steady. It can help you determine if you should continue doing a special event that has steadily declining revenue. This type of evaluation is using metrics to make data-driven decisions about what you’ll do next. 

Fundraising is based on strategy and execution of that strategy. Just guessing and trying random things without vetting them against your strategic development plan will often result in underperformance. But when you track and analyze numbers and use them to make well-thought-out decisions, take calculated risks and evaluate what’s been working year-over-year, then you’re basing your fundraising actions on a solid foundation. The data-driven decisions you make can help improve outcomes from specific fundraising actions and increase your fundraising income overall. 

The preceding post was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.