Fundraising Metrics
Clear fundraising metrics are critical for your success! In 2023 I was called in to help a nonprofit in crisis. They were over 100 years old and practically insolvent. They didn’t know it yet, but they had lost 25% of their donors in 18 months. Things were not looking good.
As part of on-boarding clients, I ask to see what fundraising metrics are tracked by leadership.
When I asked this client for their fundraising metrics I got the past 5 years of total dollars raised. That was it. They were not measuring anything!
This meant that until the end of the year when the final dollars were counted they didn’t know how they were doing! They didn’t know what to project. They didn’t know how many donors were coming or going. They were flying blind.
Sadly, this client was never able to implement any type of changes that altered their course. And I learned a crucial lesson.
Yes, fundraising metrics are about data, systems, and inspection. But MORE IMPORTANTLY they are about culture!
An organization with the best tracking and monitoring is nice. But if there is not a culture of accountability the organization will flounder.
The inverse is also true. An organization with subpar tools, but a culture rich in accountability will grow.
Ideally, you can do both!
If you want to learn how to create a culture that will embrace the right fundraising metrics, keep reading.
First, we will take on the culture needed to successfully implement fundraising metrics. Then we will take on fundraising metrics themselves.
In order to help you I have curated thoughts from some of the best fundraising leaders I know.
Culture Eats Fundraising Metrics for Breakfast
We all know the saying that “culture eats strategy for breakfast”. But very few organizations actually do anything useful with it.
For example, every nonprofit has a strong desire to grow their fundraising dollars. But often the culture of those organizations eats the fundraising strategy.
There are lots of reasons for this. Trouble holding staff accountable. Fear of perception as too aggressive. Not wanting to articulate the real challenges the organization is facing. No clear road map or case for support. Not valuing the hard work that fundraisers do! The list is endless.
So, what happens? A whole lot of frustration, bitterness, anger, resentment and mediocrity. The best staff usually go and find other jobs. Jobs where they are challenged and recognized for their contribution. And subpar staff stay—because there are no consequences for under performance. Worst of all—the mission suffers because dollars stagnate or decrease.
If this type of culture sounds good you should stop reading now. Nothing past this point will help. But if you want to build a culture that promotes growth, keep reading to find out how.
The 3 C’s
There are 3 things that leaders can do to build cultures that will support fundraising growth. Growth shown by great fundraising metrics. They happen to all begin with C. They form a 3-legged stool or sorts. Each of these deserve their own articles. But a primer will do for now.
1. Clarity
Brene’ Brown reminds us that “Clear is kind. Unclear is unkind”. To create cultures that embrace growth leaders need to start by being clear. Clear about what is expected. This starts with job description clearly articulating the fundraising metrics you will track. This then filters down to yearly, quarterly and monthly goals. It permeates both 1:1 and team meetings on a regular basis.
Leaders who bring clarity bring kindness into their culture. Your fundraising team deserves clarity around what you require and how they are measured. If they don’t have this clarity chances are they are spending a lot of time trying to figure it out. Which means a lot of time NOT being spent on the job your hired them for!
2. Community
Having clarity around what is expected is a great start. But its only one leg of the stool. The second is community. A healthy community fuels growth.
If your community is healthy the team will be very willing to work with leadership. They will help determine the fundraising metrics that best ‘show off’ progress in their work. An unhealthy community will resist anything that could be perceived as ‘inspection’.
In a healthy fundraising community each team, and each team member feel confident and secure with their metrics being shared. Being shared across the team and the organization writ large [a best practice]. They know that if they are ahead of their metrics that others will celebrate with them and learn from them. They know if they are behind others will pitch in to help. An unhealthy community will resist public sharing of fundraising metrics at all costs!
3. Consistency
Consistency is the final leg of our stool. To bring health to a fundraising culture, particularly around fundraising metrics, there needs to be consistency. Consistency in when things are measured, how they are reported and what the impact, both positive and negative, will be.
Clarity shows what metrics will be measured and when. Community entails it will be shared publicly. Consistency is the promise that it will be done at the agreed upon time, in the agreed upon way, over and over and over again.
Consistency is the promise that what happens when your fundraising metrics fall behind happens the same way for everyone. For example, on a team I formerly led if you didn’t meet your metrics one month you had an explorative conversation with your boss as to why. If the numbers didn’t improve the next month you and your boss created a plan. If they still didn’t improve after the third month you got a warning. For the fourth month it was a PIP.
It did not matter if you were the longest serving, highest dollar raising team member. Of if you were an entry level teammate that was just hired. It was the same for everyone. It was clear. There was an understanding in the community. And it was consistent.
Consistency is also the promise that what happens when your fundraising metrics are excellent it will be experienced and celebrated the same for everyone.
Fundraising Metrics: Difficult Conversations
All 3 C’s entail difficult conversations. Brene’ Brown is helpful to us again:
“Of the ten behaviors and cultural issues that leaders identified as barriers…, there was one issue that leaders ranked as the greatest concern: Avoiding tough conversations, including giving honest, productive feedback.
Some leaders attributed this to a lack of courage, others to a lack of skills, and, shockingly, more than half talked about a cultural norm of “nice and polite” that’s leveraged as an excuse to avoid tough conversations.
Whatever the reason, there was saturation across the data that the consequences of avoiding tough conversations or tapping out of a difficult rumble as soon as it gets uncomfortable include:
- Diminishing trust and engagement;
- Increases in problematic behavior, including passive-aggressive behavior, talking behind people’s backs, pervasive backchannel communication (or “the meeting after the meeting”), gossip, and the “dirty yes” (when I say yes to your face and then go behind your back); and
- Decreasing performance due to a lack of clarity and shared purpose.
This is the challenge the client I previously mentioned could never overcome. Their culture was incapable of difficult conversations. When we told them they needed to build internal trust they laughed. The staffs behavior was the worst I have seen in over 20 years! No one was happy. No one was productive.
There has been a lot written about culture in organizations. For the implementation of fundraising metrics the cultural shift needed starts at the top. Always.
Two Types of fundraising metrics
Now that we’ve discussed the type of culture that supports monitoring of fundraising metrics lets talk about the two types of metrics needed.
There are many systems out there for tracking how teams are doing. The 4 Disciplines of Execution. OKR’s. And KPI’s
At their core all of them are tracking two things.
1. The results you are after. The outcome or the lag indicator.
2. The key steps, actions, or lead indicator that you believe will generate the result.
The most important thing here is that you cannot control your result. You can only control the actions that you take.
Jeff Walser, Vice President of Strategic Engagement at World Relief says, “You can measure results but you cannot manage them. We need to measure and manage the faithful actions that set us up for fruitful results”.
You need to measure BOTH.
You absolutely, 100%, never ever ever, can control what your donors do. What they decide to give. When they decide to give. How they decide to give. No amount of strategy, no amount of culture can MAKE someone else do something. This is your lag indicator—the outcome you are after. And no matter how hard you try, you cannot control it!
But you still need to measure it!
Why? Because you can influence their behavior! How? By controlling and measuring what YOU do! What your organization does. And how it does it!
Lead indicator/Your action: It’s the ‘lead’ because it comes first, because you take the action. And you can control that you act.
Lag indicator/Donor action: It comes after, because you need to initiate the action and then donors have to respond—which you cannot ever control, only influence.
Fundraising Metrics for Executives
Most C-level leaders want high level fundraising metrics. This is normal. And this is what they should measure. Leaving it to their staff to measure more specific items.
As a whole I think executives should always track the following 5 fundraising metrics:
1. Year over Year Growth
This is the most basic metric. Are you growing or contracting based on the results of the last several years? You should measure this for overall fundraising, but also for various segments (major, mid, annual, monthly etc).
2. Retention Rate
I personally think that this is the most important lag indicator. It shows you if your donors are staying around. It shows if your team is creating the relationships, the content, the stories that keep donors engaged. Again, I would do it as a whole and then for each segment. If you have a lapsed donor problem the sooner you know about it the sooner you can fix it! Click here to read more on lapsed donors.
3. New Donors
Jeremy Reis says, “If you aren't acquiring donors, your organization is dying. This metric also helps in identifying which strategies are most successful in attracting new supporters.”
4. Bump Up’s
At its core this is donors who begin donating at a low level, and then increase over time, many to mid-level, but also major giving. Jeremy continues by saying this:
“Are you able to build a major donor program and upgrade people to give $10k+? The ability to cultivate and retain such high-level donors is key to the organization’s capacity to build strong relationships. If significant donors don't trust your organization, you may need to change your messaging or donor care. Tracking the number of $10k+ donors helps in assessing the effectiveness of major donor programs and identifying opportunities for growth.”
5. Number or Percentage of touch points
How many times are your donors hearing from you each month. Depending on the type of donor the type of touch point will change. But this is a great lead indicator for executives to track because it is an action you can control that impact all of the lag indicators mentioned in this section.
Fundraising Metrics for Line Management
Line managers are responsible for nurturing the behaviors and actions that produce results. Line managers also have access to (and discussion around) all the fundraising metrics executives are tracking.
Usually there are different line managers for different fundraising channels—Major, Mid, monthly and so on. These different managers will track different specific metrics but there is significant cross over.
1. Number of touch points per month
I have purposefully listed this twice because of its importance. Regardless if it’s a monthly donor or a major giver everyone should receive touch points each month. Either through a 1:1 relationship or through e-mail/direct mail. Line managers need to ensure that every donor is being engaged. I recommend that 80% of a major donor portfolio is touched each month. And 100% of everyone else. This will keep you from developing a lapsed donor problem!
2. Donor Development Strategies
All organizations should have a defined process on how you develop your donors (read more here). Line managers should set fundraising metrics and track monthly at each stage in the process. This includes number of asks, proposals and so on. Usually assign a higher number for the earlier stages in the process. Then slowly decrease your number for each stage until you reach “the pitch”. Realize not every donor will make it through the whole process. For example, a major gift officer utilizing our donor development strategies would be measured for 10 qualifying meetings per month. 6 journey conversations. 4 pitches. And need to touch 80% of their portfolio.
The specific of your donor development strategies will vary based on channel but include a significant amount of your lead indicators.
Jon Delange is helpful here, “Put another way, as a fundraising professional, you want to spend your limited time on high value relational activities. These high value relational activities are best invested in people who have both high capacity and high connection with your mission. The only way to ensure you're identifying these relationships, and measuring the results of your actions is through effective fundraising metrics”
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Fundraising Metrics: Setting up your process
No matter what fundraising metrics you ultimately decide on setting up the process of how you set them up will be key. You cannot forget the 3 C’s.
Make sure you CLEARLY communicate with your staff what the metrics are. How they will be measured (put into CRM or another method?). And when the data will be pulled/shared. Hint: often time staff don’t input their information until right before the data is to be pulled—so make sure they know!
Foster community by having frequent check ins around the metrics up and down the org chart. Each individual staff member should be in a conversation around fundraising metrics 1-2 times per month. One with their boss and one with their team. For line managers it increases to 7-10 times per month depending on how many direct reports they have. Line managers should discuss each staff members individual metrics 1:1. They should discuss team metrics at team meetings. And engage with executives for review, debrief and strategy. Executives will engage with the metrics 2-4 times per month. With line managers, with other executives and the board.
Drive results with consistency. It will take a while to get the hang of it. But you must keep at it. Be consistent and the metrics will start to work to drive results for you.
As time goes on you will hone your metrics. You will learn areas your team excels in. And you will learn areas that are holding them back. Train into this! Use your newfound data to help set your strategies! And grow together.
Does it work? Its up to you!
Fundraising metrics work! But only if you prioritize it. They say you need to measure what matters. And if fundraising matters. You need to measure it!
The organization I referenced above simply did not want to hold people accountable. They didn't want to measure anything. I am not sure they will make it through the rest of the year. Their high preforming staff left long before we were called in. And their leadership has been unwilling to change.
Other organization have leaned into tracking their fundraising metrics. One client we served last year grew by 58% They honed what they measured. They dedicated a WHOLE WHITE BOARD to reporting numbers each month, so everyone could see. They dialogue about it as a team at a set meeting each month and got better together. The CEO even published their own performance metrics along everyone else.
This CEO is a stellar leader who fully embraced the cultural elements of the 3 C’s and the technical elements of the fundraising metrics. They have great things ahead!
Get to work!
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