Fundraising is a huge investment, in terms of human resources, financial resources and time. That’s why I recommend tracking your activities to see if your efforts are well invested. Setting up key performance indicators will allow you to ask yourself the right questions: should I continue to target this type of donor or not? what is the average number of requests I need to send to secure funding for my project? are my donors loyal? There are many indicators that you can use, but here is my selection of the ones that I think are essential.
1. The pre-requisites
In order to set up key performance indicators, you must first have access to the data and information that will allow you to track them. I can’t repeat it enough: having a database, gathering all your prospects, donors, actions and requests, remains a must in fundraising. It is also possible to create dedicated tools, for example to list and track all the requests sent or requests made and their results if you don’t have a CRM as such.
Another must-have is your fundraising strategy. It is what allows you to set your objectives and therefore to be able to follow, afterwards, what has been done in this sense. If necessary, you can re-evaluate its relevance and adapt it from one year to the next.
In short, make sure you have the necessary tools in place for effective follow-up.
2. Financial indicators
These indicators require you to have a good understanding of your organization’s accounting and finances. It is also good to have defined your financial and fundraising goals in your fundraising strategy.
Here are the 3 indicators I use most often:
- Total amount secured: This is the total amount of new or renewed funds secured for the year. Weigh this against your fundraising goal for the year.
- Average donation amount: it is interesting to calculate it by target in order to try to increase it progressively from year to year.
- Return on investment: this is calculated by dividing revenues by expenses. The figure obtained indicates how much you have earned per franc/euro spent. In this case, a number greater than 1 means that you have made a profit, while a number less than 1 means that you have made a loss. You can calculate this for a specific campaign or more globally by taking into account the overhead costs, for example the salaries of your fundraising team.
For example, if a fundraiser cost you CHF 500 and brought in CHF 2,000 – the return on investment would be: 2,000 / 500 = 4.
This means that for every franc spent, you have earned 4 francs, so the return on investment is x4.
3. Indicators of effort
Fundraising is not easy and fundraisers also get a lot of rejection, which is normal. It doesn’t mean that they haven’t worked and it can be hard to understand for people who have never done fundraising before. So for me, it’s important to track the efforts as well. It helps to raise awareness internally about the complexity of fundraising work.
Here are 4 interesting indicators:
- Number of requests made: this helps to understand the amount of work you do on a daily basis.
- Total amount requested: no matter what the answer is. It will track another key success indicator.
- Number of cultivated prospects: all the prospects with whom you exchange, create a relationship, without having yet gone as far as solicitation.
- Average number of contacts per donor: this includes calls, emails, meetings, exchanges, etc. in order to have a better view of the effectiveness of your cultivation strategy, but also to check if some targets are taking too much effort and time.
4. Success and loyalty indicators
Finally, the success and loyalty indicators will help you to have a clear understanding of what is working, what is not working or where to look out for.
I often use 4 of them:
- Conversion rate: this is the total amount secured divided by the total amount requested, multiplied by 100. For example: if a total amount of CHF 100,000 was requested from foundations and only CHF 25,000 was secured, the conversion rate is (25,000/100,000)100 = 25%. As a general rule, the conversion rate is around 10% for requests for institutional funds.
- Number of new donors: Retaining donors is very important, but they will not be around forever. You need to make sure that new donors support you on a regular basis.
- Retention rate: for retention, of the number of donors you were supposed to renew, how many actually did? For example: you had 10 donors to renew this year, and you managed to retain 3. The retention rate is therefore (3100)/10 = 30%.
- Number of lost / lapsed donors: this allows you to understand why and sometimes try to re-engage them.
In conclusion
While this list is not exhaustive, it will help you think about your approach to fundraising and streamline your efforts. Other indicators may be useful. However, be careful not to have too many, as this would become particularly difficult to track and very time-consuming, unless you have an automatic system, such as a CRM.
Once in place, it is interesting to do an annual follow-up and to take the time to look at the evolution of the indicators over time by comparing your results with those of the previous year.
They will also allow you to better acknowledge the efforts you have made and to congratulate yourself or your teams for their work!
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