How do you measure fundraising success? Many nonprofit organizations answer this question by looking at the amount of revenue they brought in from a campaign or event. However, it’s worth digging deeper into your fundraising data and looking ata few key metricsto gain a clear picture of the overall health of your fundraising efforts.
Analyzing datausing these metrics helps your nonprofit celebrate strengths and determine where your greatest opportunities for future fundraising success lie. Use these eight indicators to gauge your fundraising success:
1. Return on investment (ROI)
Understanding your return on investment (ROI) is critical to determining whether your fundraiser was successful. Fundraisers need to raise more money than they cost to be effective, and a high ROI is a primary indicator of a successful fundraiser.
A fundraiser’s ROI is calculated as a percentage using this formula:
[(money earned – money spent)/(money spent)] X 100 = ROI%
For example, if you spent $2,000 on a fundraising initiative and raised $3,000, your ROI would be [($3,000-$2,000)/$2,000] X 100 = 50%. But if you spent the same amount and raised $5000, your ROI would be [($5,000-$2000)/$2,000] X 100 = 150%.
Although ROI isn’t a comprehensive assessment of fundraising success, it's a solid starting point for most nonprofits.
2. Growth rate
If your nonprofit runs an annualfundraising campaign or event, compare your performance from year to year to determine the fundraiser’s growth. There are two main factors to consider when you analyze growth rate:
- Amount of money raised
- Number of donors or participants
Comparing the amount raised along with your ROI over consecutive years will help you determine which campaigns and events have the highest potential to grow. Meanwhile, examining the number of donors or participants from year to year will provide insight into what types of fundraisers your supporters are interested in, informing your marketing strategy.
3. Retention rate
How many of your donors or event participants engaged with your organization for the first time this year, and how many supporters from previous years are still involved this year? Breaking down these numbers provides insight into what donor communication strategies are working and whether your nonprofit has opportunities to grow.
Donor retentionand acquisition each benefit nonprofits in different ways. Finding new donors allows for growth, while retaining existing donors is more cost effective. If your organization already has a high retention rate, you can likely invest in acquiring new donors. But if you see room for improvement in your retention rate, devote more resources to strengthening your relationships with existing donors to create a stable foundation for future growth.
4. Average gift amount
Knowing your organization’s average gift size can be helpful for understanding donor retention and acquisition success. To calculate this, just divide the total amount given by the number of gifts. For example, if you raised $50,000 from 100 donors, your average gift size is $500. You can compare this number from year to year to see if you’re receiving larger contributions over time.
Be conscious of gifts that might be considered outliers. If you received one gift that is significantly larger than usual, like a one-time gift of $30,000, it may be best to remove that from your calculation. (The new calculation would be $20,000/99=$202.)
Also, try dividing your contributions by donation tier to measure the average size of a small gift, a mid-sized gift, and amajor gift. You can then use this data to improve your fundraising asks from donors in each tier. For example, if the average size of a small gift one year was $23, it may be reasonable to suggest that smaller donors give $25 the following year.
5. Average fundraising amount
In addition to the average gift amount, you can compare your fundraisers’ success by calculating your average fundraising amount, which is approximately how much funding you received from each donor during a given fundraiser. This metric combines individual donations,peer-to-peer fundraising, merchandise sales, matching gifts, and any other fundraising sources at an event.
As you retain participants and deepen engagement from year to year, your average fundraising amount will likely increase. However, comparing this metric to your growth rate provides a clearer picture. If your number of event participants is growing, but your average fundraising amount stays the same, try offering more fundraising opportunities at your events to encourage each participant to give more.
6. Team fundraising success
If your events allow supporters to join fundraising teams, they may be an important long-term growth strategy. To analyze team fundraising success, ask yourself these questions:
- How many teams did you have?
- How many corporate teams did you have compared to those made up of family and friends?
- What is the average size of a team?
- What is the average amount raised by all teams?
- Do corporate teams or family-and-friends teams tend to raise more?
- What is your retention rate for team captains and members?
Evaluating these areas can improve team engagement at future events. Team fundraising can increase event attendance as participants invite their friends, family, and work colleagues to fundraise with them, so it’s a valuable strategy for fundraising growth.
7. Conversion rate
Conversion rate refers to how many supporters acted upon a given call to action by donating, volunteering, or otherwise engaging with your nonprofit. Let’s say you sent an email to 100 potential supporters with a link to your event registration form. If 30 supporters clicked the link and signed up, your email had a 30% conversion rate.
This metric can help you identify your most effective marketing strategies, but remember that marketing across multiple channels is key to many fundraisers’ success. Conversion rate will help you decide whichmarketing methodsto put the most effort and resources into to reach supporters effectively.
8. Return on mission (ROM)
The first seven ways to determine fundraising success are fairly standard, numerically based metrics. But there is an eighth metric to consider: thereturn on mission (ROM). ROM encompasses both financial returns and the social impact of a fundraising initiative.
Evaluating the social impact of your event might include considering whether you:
- Increased awareness about your cause.
- Brought your community together.
- Inspired supporters to learn more or deepen their engagement.
Although fundraising is critical to advancing your organization’s purpose, there are more factors involved that should be considered in measuring success. Once you’ve analyzed the numerical data from a fundraising campaign or event, take some time to consider how it impacted your organization and community beyond the dollars raised.
Invest in advancing your purpose
Whatever data you analyze, the important thing is to take the time needed to review it carefully. If you measure and examine fundraising data strategically, it can help you identify the strongest ways to advance your purpose.
