We’re asked “how do you measure fundraising success?” often. And since marketing is such a complex field, the answer can certainly be complex. But as you know, I believe in not just simplifying, but oversimplifying. So I’m going to answer in trademark PlannedGiving.Com fashion and break it down into basics.
The definition of success, of course, is subjective. One vendor we know of claimed a marketing campaign was a “total success” because they raised $3.2M. Another was thrilled because a donor event raised $147,000. And yet another claimed success after sending out 20,000 newsletters … and receiving four (4!) inquires.
Talk about opposite ends of the spectrum. We hear “success” stories like these all the time—and we’ve learned to take them all with a big grain of salt.
Why? For one thing, success stories are relative. A small, scrappy NPO certainly measures success very differently than does a global organization. For the small NPO, a $3.2M bequest might be the highlight of the decade. But for a giant global group, it’s almost a drop in the bucket.
For another, properly measuring success means taking more into account than just whether a particular number was reached.
Outlining the Basics
So, how do you measure fundraising success? Here are some key points to consider:
- You need to select key performance indicators (KPIs). These nonprofit-specific metrics allow you to measure how effectively your organization is achieving key objectives. I’ll explain below.
- As part of your KPIs, you need a reference point. So you raised $3.2M with your last direct mail campaign. That’s GREAT— but how does it compare to last year, the year before, or your overall goal?
- You need to set up a robust system of analytics so that you can collect your KPIs. That means employing tools to track website activity, social media activity, and marketing campaigns.
- Receiving just four “inquiries” after mailing 20,000 pieces is not success. First, the response rate should be at least 2%, (which would make it 400 inquiries). Of course, this number is based on your history of success with your publication, with its consistency and constancy. Secondly, one cannot bank or deposit inquiries—only donations. (And as an aside, if you received just four responses, you must have mailed out a very boring, insipid and spiritless “death brochure.”).
- Does $147,000 really make for a successful donor event? Probably not. We’ve seen examples of this over and over: The fundraising team forgets to deduct expenses, which takes most, if not all, of their “earnings.” I recall one instance in which an invited celebrity wanted first class airfare, penthouse accommodations (2 nights), dinners and a limo in addition to their $36,000 entertainment fee. And she was an alum! Now add in fees associated with food, catering, and venue rental …
- Are you following up on inquiries (properly)? Does the person following up have experience talking about and asking for the gifts? Or initiating the legacy conversation? Is your team well-versed in people skills? Are you focusing on your stewardship game?
Playing the Metrics Game
As I said, measuring success isn’t just about the amount raised or the responses received. KPIs allow you to learn a lot more about your organization than just dollar figures, and help you to make informed decisions about not just marketing, but how you achieve your mission.
KPIs allow you to:
- Create profiles for donor prospects
- Identify what’s working—and what’s not
- Determine your ROI (return on investment)
- Measure progress on goals from fundraising to mission achievement
That leads me to another common question we get: “What kind of planned giving metrics should I track? At the very least, you should measure:
- Average gift size
- Number of gifts received
- Number of pledges received
- Conversion rate (digital and print campaigns)
- Number of website visitors
- Number of pledges filled
- Donor retention rate
- Donor growth rate
- Return on Investment (also called Cost Per Dollar Raised)
- Changes in the above metrics by year
Tools and Tricks for Measuring Fundraising Success
Clearly, measuring success and tracking metrics takes serious intent and a serious framework of analytics and techniques. Here are some concrete (and not so concrete) tools to use:
- Google Analytics. Follow your metrics for two months after you place marketing systems to be fired at certain intervals. Check your metrics. Did you get a spike of visitors? (You will need a planned giving website for this).
- Social Media Analytics. All the big names have some kind of analytics platform to go with their ads platform. LinkedIn and Facebook even have specific tools to help nonprofits. Whether you’re aiming for donations, want to increase awareness about your mission, or drive traffic to a page, social media analytics are invaluable for figuring out who your audience is—and isn’t.
- A robust database management system
- Is your phone or email “ringing?” In short, responses should be driving you crazy—to the point that you can tell your boss you do not have time for meetings because you’re too busy stewarding donors and prospects.
- Use Your Gut. Do you “feel” a SERIOUS buzz, or have you noticed an uptick in inquiries from donors? Then you’re likely on the right track.
Putting it in Practice
If you haven’t been keeping track of metrics, or the data is disorganized and incomplete, it is much better to place sound marketing systems in place now and begin a new, fresh campaign with established benchmarks. That gives you the ability to refocus your priorities and start collecting the information you need going forward.
After 6,500 clients over the past 24 years, I’ve seen a lot of fundraisers who’ve decided the best way to measure fundraising success is by faking it and presenting selective data just to make their higher-ups happy.
Trust me when I say that it always backfires in the end. The metrics you collect might not always provide the news you were hoping to hear, but they will always provide you with the information you need to chart a clear path forward.
And that’s as much a definition of success as anything else.
