SETTING KEY PERFORMANCE INDICATORS FOR NONPROFIT SUCCESS
It is critical for every nonprofit to monitor its progress towards completing its mission, and the efficiency with which the organization is mobilizing its existing resources to achieve their goals. Below are a few key metrics to keep in mind as you build the path to your organization’s success.
Annual Donor Growth Rate
Since fundraising is always a priority, you need to ensure that the growth of donors is accurately tracked every year. This can be done by tracking the annual donor growth rate, which is essentially the number by which your donor base has increased or decreased over the course of a year. A simple calculation, see below, can be done to understand this Key Performance Indicator (KPI).
Once you understand whether your organization is increasing or decreasing its donor base you can dig deeper into the numbers or run a report in your database to view the donors who gave last year but not this year, and develop a strategy to acquire new donors and also to increase donor retention via targeted outreach based on donor interest and other stewardship efforts.
Many donor databases offer custom and canned reports. LiveImpact offers more than 40 canned reports including top donor report, giving history report, donor by donation bracket report, SYBUNT, etc. With numbers on your fingertips you can understand donor trends and develop data-driven strategies to increase your donors and maximize impact.
Fundraising Return on Investment (ROI)
The second critical metric to evaluate is the fundraising ROI, which is critical for nonprofits working on a limited or even a big budget. ROI will help you accurately calculate the amount raised from an event or a fundraising activity, and takes into account the dollars invested upfront to host an event or a fundraising activity.
It is easy to overlook certain expenses, so making a note of each and every dollar spent towards the fundraising effort counts. For an event typical expenses are venue, tables, refreshments, flowers, entertainment, etc. While for an online fundraising campaign expense includes the online credit card processing fees and transaction fees that the platform charges for online payment. Each type of fundraising activity will have different expenses, so it’s important to understand and make a list of the estimated costs and then replace these with actual incurred cost to calculate fundraising ROI. A comprehensive understanding of the numbers will help to better monitor how the money is being spent and what is the amount raised.
Once you have a better understanding of the expenses, then actions can be taken to reduce the cost - for example look for a fundraising platform that requests donors to cover online processing fees, etc. If your costs are minimized, then the amount of funds channeled to your organization’s mission will be higher.
Email Click Through Rate (CTR)
Email marketing is one of the most affordable and useful outreach tools for nonprofit organizations today. Reaching your constituents to share relevant and timely updates on projects or events becomes easy using emails and newsletters. Once your supporters clicks on an email, the ideal outcome should be immediate interest and a willingness to engage with your organization.
Tracking the click-through rate is vital to understanding how many recipients on your contacts list have clicked links within the email. By understanding the links clicked within an email you will also learn what motivates your donor base, so you may tap into donor interest for future stewardship efforts.
In every email marketing tool you can easily track the CTR, so keep an eye on this number to understand which supporters are actively engaged with your organization.
Email Conversion Rate
Many organizations track the CTR, but not the Conversion Rate.
CTR for emails is the percentage of recipients that have clicked on any link in your email message, Conversion Rate on the other hand takes things a little further by looking at a definite action that you want those clicks to result in. This might involve this making a donation, buying an event ticket, bidding for an auction item or downloading a piece of content etc.
An email conversion rate is central to understanding how many donors and networks are responding to your call for action. First you must understand your current conversion rate, and then set a goal to increase it.
Typically emails with clear message, infographics, videos and call to action buttons placed in a prominent position will get higher conversion rate. It takes trial and error to understand what works best with your target audience based on their demographic and interests. What works for Baby Boomers, Generation X and Millennials will be different. Segmenting your audience and developing different types of email messages will lead to higher conversion rate.
Selecting the right tool to keep track of the key metrics
Many CRM and email marketing tools provide key metrics mentioned above including LiveImpact, an integrated technology platform for nonprofits.
With LiveImpact, you can enjoy an all-in-one solution to achieve your organization’s success. It offers a cloud hosted platform with online and mobile apps for donor and volunteer management, email and newsletter campaigns, mobile and online payments, event ticketing & seating, online auctions, and ability to run more than 40 canned reports and advanced analytics. With an integrated tool, you can get a complete view of all your constituents - supporters, donors and volunteers - in one place. The minimalist and comprehensive interface also allows you to increase operational efficiency, save costs and accelerate your organization’s impact.
These KPIs will make a huge difference in getting results with your fundraising efforts. When combined, these indicators are a great way to promote the overall success of your nonprofit.