Differentiating Fundraising KPIs from Fundraising Metrics (2024)

So the terms KPIs and metrics are not interchangeable. While both are used to measure and evaluate the progress of your fundraising efforts, there are subtle differences between the two.

Key performance indicators (KPIs), as the name implies, are indicators of how well you are performing in key functions of your organization. They are specifically selected and aligned with strategic objectives and/or critical success factors. They are used to evaluate the performance of the individual, the team, and maybe the entire division in relation to specific goals or targets.

Metrics, on the other hand, are the quantifiable measures to track and assess various aspects of the division that provide insight into efficiency and progress. They are used to monitor specific activities, track trends and compare performance against benchmarks or targets.

While metrics are the broader set of measures used to evaluate performance, KPIs are strategically chosen to indicate progress toward specific objectives. While metrics may indicate how well you are doing, KPIs serve as the top-level indicators that provide actionable insights and help guide decision-making to drive performance and achieve desired outcomes.

KPIs dictate what metrics should be measured. They are specific performance indicators chosen based on their alignment with strategic objectives. Once KPIs are defined, they guide the selection of metrics most relevant to and informative in measuring progress toward achieving key indicators. Sidenote: there are instances where the metric also serves as the KPI.

Example: if the KPI is "Fundraising Revenue Growth Rate", the related metrics might include 1) total funds raised, 2) donations by appeal code, and 3) YOY donation growth rate, to name a few. The KPI "fundraising growth rate" is strategically aligned with the goal to increase donation revenue which is then measured and monitored with the metrics named above and maybe a few others.

Example: The KPI "donor retention rate" is strategically aligned with the goal to increase the effectiveness of donor stewardship/engagement. Helpful metrics in monitoring donor retention are donor acquisition rate, donor turnover rate, or donor recapture rate, among others.

No, the terms metrics and KPIs are not interchangeable. While they are related, they have distinct meanings and serve different purposes. The selection of metrics should be driven by KPIs as they define the key areas of focus and performance management. By establishing meaningful KPIs, organizations can determine which metrics are most relevant to track and evaluate progress toward strategic objectives.