Interpreting Nonprofit Data: 9 Strategies to Leverage KPIs
By Guest Blogger, Steven Shattuck
Chief Engagement Officer at Bloomerang
Key Performance Indicators, or KPIs, are used by nonprofits to track the progress of your highest priority tasks and goals. By tracking KPIs, your nonprofit can track important information that will help your organization better build relationships, raise more money, and accomplish more in your community.
However, you need to know what data to track and what KPIs are the most accessible and important for your nonprofit’s mission.
In this article, we’ll cover seven of the most commonly valued KPIs by nonprofits. These important goals generally revolve around these metrics:
Existing Donor Retention Rate
New Donor Acquisition Rate
Donor Engagement
Donor Generosity
Marketing/Communication Metrics
Average Gift Sizes
Face-To-Face Meetings
In-Kind Gifts
Donor Pyramids
Ready to learn more about important nonprofit KPIs? Let’s get started.
1. Existing Donor Retention Rate
Donor retention is one of the top KPIs that nonprofits pay attention to. It takes a lot of money to acquire a new donor.
Think about it: You need to reach out to a lot of potential donors in order to acquire just a small percentage of them. However, once donors are in your donor database, you already know they’re interested in your nonprofit. Therefore, it’s much easier (and cheaper) to convince them to donate again.
According to research from the Fundraising Effectiveness Project, the average donor retention rate is around 43%. However, most donors still only give once. The new donor retention rate is generally in the low 20%s, but after they’ve repeating their gift once, they’re more likely to do so again. The repeat retention rate is around 64%.
Why is this important? It provides an indication about where organizations can most dramatically improve their strategies to increase that overall retention rate: with brand new donors.
While following the fundraise, reflect, respond, repeat method of raising money, be sure to focus specifically on the “reflect and respond” steps and consider how they can help you retain more supporters. For instance, we’ve got a couple of strategies for you to consider:
Prioritize fast and personal follow-up messages after a supporter contributes to your nonprofit. Include personal details (such as a supporter’s preferred name) and specific donation details in your thank-you emails. Or you might send a hand-written letter or personally call supporters to show your appreciation.
Provide additional (and varying) engagement opportunities to supporters in order to keep them involved with your organization. For instance, you may decide to host an event, invite donors to participate in advocacy opportunities, or invite supporters to perchance branded merchandise.
The important thing to keep in mind with any of these strategies is that your nonprofit should track each and every interaction in your CRM. Bloomerang’s donor database guide can help your nonprofit find software to track all interactions and really hone in on retention strategies.
2. New Donor Acquisition Rate
While donor retention rate is incredibly important, there is still some natural donor lapsing that occurs for every organization. It’s impossible to keep a 100% retention rate forever. Therefore, acquisition rates shouldn’t be thrown entirely to the wayside.
Your donor acquisition rate should always be slightly higher than your rate of attrition in order to ensure your nonprofit support base is continuously growing.
Therefore, track your donor acquisition rate. Remember that these donors are generally finding your organization through resources like your social media presence, website, and community events. Then, they generally give using your online donation tool.
Therefore, to boost your donor acquisition, you should work to optimize these resources and make them as accessible as possible. For instance, make sure your website is easily navigable and you’re using the best tools to collect donations (a list of top recommended donation tools can be found here).
3. Donor Engagement
Once your donors have donated or shown interest in your nonprofit, you need to maintain their engagement over time to build a relationship with them and to encourage them to become a lasting contributor.
Therefore, it’s important to measure the engagement levels of each of your supporters. Plus, knowing their engagement levels will help your nonprofit better know who to reach out to for major gifts, in-kind gifts, and for specific campaigns.
Look to buy fundraising software with donor engagement measurement features built right in. For instance, Bloomerang features an engagement meter designed by fundraising expert Dr. Adrian Sargeant, whose algorithm measures the engagement of supporters by “cold,” “warm,” “hot,” and “on fire!”
4. Donor Generosity
Alongside your organization’s engagement score for each of your donors should be a generosity score. The engagement information can provide insight as to a donor’s affinity to give to your organization. Meanwhile, their generosity scores can provide insight as to a donor’s ability to give.
Generosity scores are created by compiling wealth data. According to DonorSearch’s wealth data guide, this term refers to the publicly accessible data points that your nonprofit can access to determine a donor’s financial ability to give.
Your nonprofit can (and should) invest in a prospect research tool that can help find these all-important data points.
This is especially important when it comes to soliciting major gifts or launching a major campaign. When you’re soliciting major gifts, you want to make sure you reach out to supporters who are highly engaged and financially able to donate the amount of money you ask for. In a capital campaign, you’ll need to fill out your gift range chart with viable prospects.
As you can see, the donor generosity score is vital for your major fundraising initiatives. So measure the generosity scores of your individual donors and make sure your nonprofit has enough high-generosity supporters to fulfill your goals.
5. Marketing/Communication Metrics
Marketing is key to spread the word about your organization, acquire new donors, and to let your existing supporters know what’s going on at the nonprofit. Therefore, collecting indicators about the success of your outreach ensures you have the best strategy to do these things effectively.
When it comes to email, collect data such as open rates, click-through rates, and number of responses. When it comes to direct mail, see how many people respond to letters. Make sure to also ask people how they heard about your organization in surveys. This way which aspects of your outreach are working better than others.
When you know this type of information, you can better point out (and fix) the strengths and weaknesses of your marketing campaign.
6. Average Gift Sizes
The average gift sizes, paired with information about donor retention, acquisition, and lapsing rates, can give your nonprofit a very good indication of annual budgetary expectations.
Plus, when you identify your average gift size, you can reach into your donor database and learn more about those supporters’ averages that are significantly lower or higher than the average. This can help you increase the lower donations and further engage those who give more.
Remember, when you increase your donor retention rate, your average gift size may also increase. Just make sure you’re doing your part to reach out to the best audiences, optimize your content as best as possible, and identify the opportunities to boost your fundraising strategies.
You don’t have to just calculate this for individual gifts. Be sure you know what your average monthly gift size as well.
7. Face-to-Face Meetings
Face-to-face meetings are incredibly important to build a personal connection with your nonprofit’s donors, especially major or planned gift prospects.
When your donor database displays the number of face-to-face conversations you’ve had to date, you’ll feel more motivated to have even more of these discussions.
Make sure that this number of meetings is always growing year over year. For instance, Bloomerang’s Sustainability Scorecard allows your organization to see how many face-to-face meetings you’ve had and compare it directly to last year’s so that you can be sure your conversations are always growing in number.
8. In-Kind Gifts
Nonprofits have a bad habit of ignoring in-kind gifts from their supporters or of prioritizing financial donations over these helpful contributions. Instead of a donor giving an unrestricted donation to the organization, then the organization purchasing something they need, donors (or companies) directly give nonprofits the item they need. It takes out the middleman.
In-kind giving is an important datapoint to show the sustainability of your nonprofit. Just as your retention rate and average gift amount should increase from year to year, so should your number of in-kind gifts.
Receiving fewer in-kind donations this year than last must be factored into your budget. It means your nonprofit will likely be spending more and sometimes doing so with fewer resources, which is the last thing you want for your organization.
9. Donor Pyramids
A donor pyramid shows the number of major donors, mid-tier donors, and individual donors who contribute to your nonprofit. It looks something like this:
The pyramid depicts the number of major, mid-level, and small donors for the fiscal year to date in comparison to the last year for both individual and corporate gifts.
Remember that the number of donors you have in each level will look different depending on where your nonprofit is in your journey. For instance, younger nonprofits may not have any major donors yet.
Key performance indicators are vital for your organization’s continued success and growth. Without measuring where you are now, and what your goals are for the future, it will be incredibly difficult to reach your ultimate goals.
Make sure, when you take any of the above metrics and create your goals regarding them, that you ensure these KPIs are specific, measurable, and reasonable.
By implementing these strategies, your nonprofit is well on its way to growing and making an even larger impact on the community. Good luck!
Steven Shattuck is Chief Engagement Officer at Bloomerang and Executive Director of Launch Cause. A prolific writer and speaker, Steven is a contributor to "Fundraising Principles and Practice: Second Edition" and volunteers his time on the Project Work Group of the Fundraising Effectiveness Project and is an AFP Center for Fundraising Innovation (CFI) committee member.