There’s a lot that goes into planning a fundraising campaign, from developing a marketing plan and case for support to thanking your donors (or, as Convergent refers to them, investors) for their generous support. Amid the hustle and bustle of the planning process, don’t forget to also create a strategy for tracking fundraising metrics.
Metrics are important data points or key performance indicators (KPIs) that help measure your campaigns’ success. According to Bloomerang’s online fundraising guide, “tracking metrics can help your organization find opportunities to improve your current strategy and confirm that your current fundraising platforms are effective.”
Let’s explore seven of the most useful fundraising metrics to track during your organization’s campaigns:
- Acquisition cost
- Retention rate
- Fundraising ROI
- Average gift size
- Asks made
- Lifetime value
Depending on your nonprofit’s fundraising priorities and goals, you might also choose to track additional metrics, but these KPIs should give you a solid foundation to start building your reporting strategy.
1. Acquisition cost
Acquisition cost measures how much your nonprofit must spend to bring one new investor on board. You can identify this metric by dividing the amount you spent on donor acquisition by the number of new investors you acquired.
According to DonorSearch’s guide to nonprofit fundraising metrics, it’s especially helpful to compare your investor acquisition cost across different marketing channels, campaigns, or time periods. You can determine which channels or campaigns are most cost effective and consider whether to cut costly investor acquisition methods from your fundraising strategy.
For example, you might determine that it’s very costly to host appreciation events to acquire new investors because of the high overhead costs involved. Plus, supporters don’t tend to give a lot during these experiences. On the other hand, your campaign-based fundraising strategies, such as your capital or annual campaigns, might have much lower overhead costs and better fundraising outcomes.
2. Retention rate
Your investor retention rate is the percentage of investors who continue giving to your nonprofit year after year or campaign after campaign.
Tracking both your acquisition and retention rates gives you a better understanding of how many investors you’re recruiting for each campaign and how well you’re maintaining their support over time. An improved retention rate also allows your nonprofit to spend less on ongoing acquisition costs.
You can boost your retention rate by:
- Communicating more regularly with investors via their preferred communication platform
- Showing appreciation through recognition letters or messages
- Asking investors for their feedback on your campaigns and communication strategies
Track how your retention rate responds to each of these efforts. For example, you might notice a boost in your retention rate after calling to say thank you.
3. Fundraising ROI
Return on investment or ROI is an important metric for determining whether or not your fundraising efforts are financially sustainable. You can calculate your fundraising ROI for a campaign by dividing your revenue by your expenses.
If your expenses exceed revenue, you might decide to adjust your campaign strategy in the future or pursue a different campaign type to increase your ROI. The higher the ROI, the more you’ll be able to raise throughout your campaigns, allowing you to work toward your mission more effectively.
4. Average gift size
Your average gift size can give you a sense of your investors’ giving capacity and the effectiveness of your efforts to encourage them to increase their gift amounts. General economic changes, like a recession, may also impact your donors’ average gift sizes.
You can capture this metric:
- For each individual fundraising campaign to compare campaign types and see which promotes more giving
- Once a year to measure progress over time
- For different investor segments (major gifts, monthly contributors, etc.) to get a sense of general giving trends for each group
Strategies to increase your average gift size over time include asking investors for specific gift amounts that are personalized based on their past donation sizes. You can also increase the size of your suggested investment amounts on your online giving form.
5. Asks made
This metric is the number of requests your team made to its investors throughout your campaign.
Tracking asks made helps you determine how ambitious your fundraising approach is and how well your team is getting out in the community to promote your cause.
You can also compare this metric to your total donations received to get a sense of your donation conversion rate. If you’re making plenty of asks throughout your campaign but not receiving as many positive responses, you might need to spend more time building your Asking Rights(™). This involves strengthening your nonprofit’s credibility, improving your team’s fundraising skills, and better communicating outcomes to your potential investors.
Knowing exactly who supports your campaigns can help you better connect with current and new investors in the future.
You can use Google Analytics, along with your nonprofit’s donor management software, to understand and update investor demographics. These might include:
- Geographic location
Use this information to create supporter segments and send more relevant content to each group. For example, if you choose to segment supporters by age, you might leverage different communication platforms for each group. Younger supporters may prefer social media or text communications, while older audiences might like to receive phone calls from your nonprofit.
7. Lifetime value
Investor lifetime value tells you how much financial support investors provide your organization over the amount of time they’re involved with your nonprofit. You can calculate this metric by multiplying an investor’s average annual gift amount by the length of time they’ve been an investor.
This metric is most useful when you calculate the lifetime value of different investor groups rather than just assessing the lifetime value of one individual. For example, you might analyze the lifetime value of the following types of investors:
- Monthly givers
- Online Major gifts
Calculating the lifetime value of each of these groups can help reveal hidden fundraising potential. For example, you might note that the lifetime value of your mail-in investors is much higher than your online supporters, leading you to spend more time cultivating and nurturing your mail-in partners while building up more online fundraising support.
Make sure your fundraising team members know exactly who is in charge of tracking each metric you choose. This ensures that when each campaign wraps up, you can easily compile each KPI into clear reports for your full team to review and discuss. Apply the insights you learn to future fundraising initiatives to maximize your success!