Picture this: Your nonprofit has just finished creating its strategic plan for the next two years. After assessing your organization’s current state and soliciting feedback from your donors, volunteers, board members, and staff, you’ve outlined multiple goals to work toward.
Over the next few months, you get started on a few of your goals, making headway here and there. But a year into your strategic plan, you realize you don’t know how much progress you’ve actually made...
...Whether you’re rolling out a new strategic plan or just launching another fundraising campaign, there’s no need to remain in the dark about how your organization is performing. Instead, you can actively review and assess key performance indicators (KPIs) to track your progress toward a specific goal. For instance, in the strategic plan example, you might want to maintain or grow your community of loyal supporters. As part of your efforts, you could track changes in your donor retention rate to give you insight into how successful your initiatives are.
The possibilities for using KPIs to improve your nonprofit’s operations are nearly endless. In this post, we’ll dive deeper into what KPIs are and walk through some common ones you can get started with. Let’s begin!
Nonprofit KPIs: A Quick Overview
Key performance indicators (KPIs), also known as metrics, are measurable values that allow you to track your performance in specific areas, such as fundraising, marketing, and providing services to your community. Your organization can track high-level metrics to better understand its overall performance, or focus on lower-level metrics that provide insight into specific areas of your operations.
For example, say your nonprofit is the fundraising arm of a healthcare organization. You might track high-level metrics such as fundraising return on investment (ROI) or average gift size for the entire organization for a given fiscal year. But you could also focus on lower-level metrics specific to individual programs, like the donor acquisition cost for your major giving program or the email open rate for your members-only newsletter.
The KPIs you choose to track should be specific to your organization’s goals and larger mission (more on this below!). As you consistently measure changes in your KPIs over time, you’ll be better equipped to:
- Identify what strategies and plans are working well and what needs to be adjusted.
- Make big-picture strategic decisions that align with your short- and long-term goals.
- Stay accountable to and transparent with your community of supporters and key stakeholders.
The insights you gain from your KPIs can set you up to sustainably grow your organization over time, empowering you to serve more beneficiaries and move the needle on your mission.
7 Nonprofit KPIs To Consider Tracking
If you’re just getting started with nonprofit KPIs, it can be tempting to try and track everything. But having too much data on your hand can work against you as you struggle to keep all of your insights organized and prioritize what to act on first.
Instead, choose your KPIs based on your organization’s current goals and focus areas. DonorSearch’s guide to fundraising metrics recommends considering KPIs such as:
- Fundraising ROI: Fundraising ROI tells you how successful a given fundraising campaign was. Calculate it by dividing your total revenue by your total expenses. If the resulting number is greater than one, your campaign was profitable. If it’s less than one, you lost money.
- Donor Retention Rate: This metric helps you determine how many donors your nonprofit retains year over year. Calculate it by dividing the total number of donors who gave this year and last year by the total number of donors who gave last year, then multiply by 100 to yield a percentage.
- Outreach Rate: Outreach rate can help your team see how often you’re reaching out to individual donors over a set period of time. This metric is simply expressed as the number of interactions per unit of time, such as 12 interactions with major donors per year.
- Demographic Metrics: You may find it helpful to track demographics like age, location, gender, or profession. All you’ll need to do is count up how many individuals fall into a certain group. For instance, you may find that 945 of your donors are women and 635 of your donors are men.
- Average Gift Size: Average gift size is the average donation amount contributed by a certain group or during a certain campaign or time period. Calculate it by dividing the total dollar amount of donations received by the number of donations received.
- Matching Gift Rate: According to Double the Donation, matching gifts are a type of corporate philanthropy in which companies financially match their employees’ charitable contributions. Actively monitor your matching gift rate to learn what percentage of contributions are being matched through these programs. To find this metric, divide the number of donors who had their gifts matched by the total number of donors, then multiply by 100 to yield a percentage.
- Online Gift Percentage: This metric will help you determine the percentage of your donations that come from your online donation form versus other channels. To find it, divide the number of online gifts by the total number of gifts given and then multiply by 100 to yield a percentage.
As you select a few KPIs to start tracking, remember that you can always choose different metrics down the road as you shift your focus to other goals and priorities. No matter what you decide to track, the key will always be giving yourself enough time to see noticeable trends that you can act on.
Getting Started With Nonprofit KPIs
Now that you know what KPIs you want to track, there are a few more steps you can take to set yourself up to get the most out of your metrics. We recommend the following:
- Tidy up your data. Collecting and organizing accurate, up-to-date data will be imperative for calculating metrics that you can act on. Audit your current data to ensure you don’t have any incorrect or duplicate entries, and, if needed, seek out data append services to ensure you have complete and accurate information to work with.
- Invest in the right tools. Use the right software, like a robust CRM, to help you gather new data and keep everything up to date. You can also leverage tools that help you calculate your metrics automatically instead of relying on manual number-crunching that leaves you prone to human error.
- Establish baselines and targets. Knowing your starting point will help you set specific goals you can reach for with your metrics. For example, you might find that your current donor retention rate is 35%. With 35% as your baseline, you could set a target to raise that rate to 50% over the next year by employing strategies like better donor recognition techniques.
Once you’ve been tracking your KPIs for a while, you’ll start to see trends that you can act on. Some insights might warrant further research to help you determine your next move. For example, you may find that the open rate on your marketing emails goes up one month. After a little digging, you discover that many of your recent emails have focused on your legacy gift program, so you decide to more actively promote the program and invite more mid-level donors to join your legacy giving society.
Nonprofit KPIs give your organization the hard numbers it needs to measure its progress against its goals. As you begin tracking metrics for your nonprofit, make sure to choose your KPIs with care and prepare to act on the insights you gain. You’ve got this!