Nonprofit Fundraising Metrics: Essential KPIs to Track
By Moradeke Owa
| Last updated:
Oct 22
|
10 min read
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Non-profit fundraising can be both stressful and rewarding. One major reason for this is that, while profit isn’t the primary goal of a non-profit, you still need to generate enough revenue to keep the lights on.
Fundraising KPIs can help you determine whether your efforts are producing the expected results. You can also use the data from these KPIs to improve and restructure your fundraising strategies.
This article will walk you through the process of identifying the best KPIs to track for your non-profit and their impact.
Metrics or KPIs are quantifiable measures used to evaluate your organization’s performance in a specific area over time. So, fundraising metrics help you determine the success and growth of your fundraising program.
Donors and donations are at the heart of fundraising metrics; the majority of fundraising metrics track the revenue you generate from donations and the donors who make these donations.
Tracking fundraising metrics enable you to figure out how well your organization is meeting its goals. These KPIs identify the areas of your fundraising strategy that are succeeding or failing.
You can also use them to pinpoint where you went wrong and how you can improve your performance in the future.
Donation matching is a type of fundraising in which employers match their employees’ contributions to a non-profit to increase the donation (mostly cash) given to the non-profit.
For instance, if a Company A employee donates $15 to a breast cancer charity, the company will match the donation with another $15.
One of the most important reasons to consider matching donations is that it allows you to promote your non-profit through employees. These employees actively engage their employers to contribute to your non-profit, saving you money on marketing.
Most organizations have policies in place for conducting a matching gift donation. For example, most organizations prefer to do matching with cash gifts rather than items.
Matching gift rate helps you figure out the percentage of donations that are from matched donations.
Matching Gift Rate = (Number of Matching Gifts Received/ Total Number Donations) X 100
The likelihood of receiving one-time payments all year is pretty slim for most non-profit organizations, so focusing on this KPI will help you monitor and improve regular donations which are a more consistent source of revenue for your organization.
A recurring gift is when a donor chooses to make regular donations to your non-profit. These regular donations indicate donors’ interest and commitment to your non-profit.
So, measuring the percentage of your recurring gifts helps you figure out if you’ve been able to get donors to commit to gifting your non-profit regularly.
Recurring Gift Percentage = (Number of Recurring Donations/Total Gifts) X 100
Also, if you notice a very small percentage of recurring gifts, it may not be because donors do not believe in the cause, but rather because they haven’t seen results from their donations.
People are more likely to donate to a non-profit if they can see how the funds raised have produced results. Developing a reward system that recognizes donors’ input is a good way to increase recurring gift percentages.
For example, you could send a thank you email to donors after each recurring donation to show how much you appreciate their contribution.
Soliciting donations from first-time donors typically requires more time and resources than re-engaging donors to make continuous contributions.
The donor retention rate KPI represents the number of donors your organization has been able to keep. It’s typically measured annually, so you’ll be comparing the current year’s donor list to the previous year’s.
Donor Retention Rate = (Number of years retained donors / Number of donors from the previous year) X 100
For example, in 2021, you had 200 donors and 178 donors in 2020. Also, if 125 donors from the 2020 donor list appear on the 2021 donor list, your donor retention rate would be:
(125/178) x 100 = 70.2%
Pledges are promises made by donors to contribute a certain amount to an ongoing donation. The pledge fulfillment percentage KPI shows the percentage of your donors that pull through with their pledges.
Pledged donations account for a significant portion of projected revenue for most non-profit organizations, so you need to monitor this KPI to ensure you meet your revenue generation targets. Keep in mind that pledges will not generate all of your revenue.
Of course, not all donors will fulfill their pledges, so don’t be worried if a few of your pledges fall through. However, a very low pledge fulfillment percentage could be an indication that you are not being proactive in getting donors to fulfill their pledges.
Pledge Fulfillment Percentage = (Actual Donations/Pledges) X 100
There are several methods for increasing your pledge fulfillment percentage, but the most common is to contact your donors and remind them of their pledge; you can do this via phone calls or emails.
Lapsed donors, in contrast to retained donors, are the number of donations that dropped off the donor list from one year to the next.
This KPI shows you how many donors have stopped contributing to your organization year to date. This metric can also be used to identify donors who should be contacted for their donations to your non-profit to continue.
To determine the number of lapsed donors, simply check the number of donors on the previous year’s list who are not on this year’s donors list. For example, if you had 100 donors last year and 25 of them are no longer on the list this year, you have 25 lapsed donors.
Measuring the lapsed donor rate also enables you to figure out the percentage of donors who no longer give to your organization.
Lapsed Donor Rate = (Number of Lapsed Donors/ Number of Donors from the Previous Year) X 100
This is a predictive metric that allows you to calculate how much money you would receive from a donor throughout their lifetime.
Measuring this metric allows you to see when your non-profit’s revenue is growing or decreasing. For example, if your acquisition efforts cost $100 and the donor’s lifetime value is $70, pursuing this donor would cost you money.
There are two methods for calculating the donor lifetime value. The first technique is to add up all of a donor’s donations, from the first to the last donation.
The second method is to multiply the average gift size of a donor by the donor’s active period.
For example, your average donation is $50 once a year and donors are active for ten years. Your organization’s donor lifetime value is $50 multiplied by 10, resulting in a donor lifetime value of $500.
The donor growth rate measures how many donors you’ve been able to acquire in a given period, usually a year. Measuring this KPI allows you to determine the effectiveness of your acquisition methods.
Donor Growth Rate = [(Current year’s donors – previous year’s donors)/Previous year donor] X 100
Your donor growth rate could either be positive or negative. When it is positive, it indicates an increase in the number of donors, while when it is negative, it shows a decrease in the number of donors.
Keep in mind that the donor growth rate estimates how many new donors you’ve added to your donor list, not donations. So a negative donor growth rate doesn’t necessarily imply lower revenue.
This metric measures the diversity in your donor pool. For example, you can classify your donor pool into corporate, personal, government, and NGOs.
This KPI helps you identify where your funding sources, so it gives you a perspective of the group to focus you’re marketing effort.
For example, if the majority of your donations are personal and corporate donations are the least, you can use this data to pursue more individual donations.
You can also use this information to improve your strategies for pursuing corporate donations to increase donations from this source.
Although it is unlikely that all of your donors will give the same amount, knowing the average amount you receive from a donation helps you plan your expenses. It also helps you figure out how many donors you need to acquire to meet your target revenue.
For example, if you need to generate $50,000 in revenue per year and your average gift size from a donor is $100 per year. To meet your revenue goals, you’ll need to convert at least 500 donations.
The asks made is the number of direct requests you’ve made to contributors to give to your non-profit. This helps you determine if you’re making enough efforts to acquire new donors.
Converting potential donors to giving to your non-profit requires dedication and consistency. For example, you typically have to reach out to donors, pique their interest in the organization, and persuade them to give their money to it.
The truth is that not everyone you contact will donate to your non-profit. But the more people you contact for donations, the more likely it is that you will gain more donors.
This KPI helps you quantify how much it costs to raise a dollar.
Non-profit organizations typically use the cost per dollar raised (CPDR) metric to measure fundraising success. It helps you determine whether or not your fundraising efforts resulted in a profit.
CDPR = Total Cost of Fundraising Program/Revenue generated from fundraiser
If your cost per dollar raised exceeds one, you spent more than you received. If it is less than one, you made more money than you spent organizing the fundraiser.
Also, if your CPDR is 1, it means you broke even; you did not make or lose money.
Measuring this KPI with donors enables you to assess your organization’s creativity in contacting potential donors. It helps you see if you’re putting in enough effort to persuade potential donors to donate to your non-profit and re-engage current donors to contribute to the organization.
You can also use this KPI to determine whether to increase or reduce the number of times you contact donors. For instance, donors may perceive your texts, emails, or phone calls as a nuisance if you contact them too frequently.
Also, some potential donors only need a gentle nudge to donate to your organization; you may need to contact them more than once to persuade them.
A steady stream of donors is incredibly beneficial to your non-profit, but determining the cost of acquiring the donor is also important. The donor acquisition cost is the amount you spend to persuade potential donors to contribute to your non-profit.
You can use your donor acquisition cost to see if you’re overspending on donor acquisition. Most non-profits strive for low donor acquisition costs because it means that a large portion of your revenue will go to the cause rather than to donor acquisition.
For example, if the cost of acquiring donors is outrageously expensive, you can reduce your marketing budget to attract donors.
Donor Acquisition Cost = Amount Spent on Donor Acquisition/ New Donors Acquired
The fundraising ROI is a popular metric for measuring the effectiveness of your budget. It helps you determine if your fundraising efforts were successful.
The fundraising ROI is similar to the CPDR, but instead of simply dividing your total expenses by your revenue, it’s the inverse.
Fundraising ROI = [(Funds raised by the campaign – Total cost of the campaign) /Total Cost of Campaign]
Using non-profit fundraising KPIs enables you to monitor and optimize your fundraising strategies. It also helps you assess the profitability of your non-profit and how you can be more efficient to prevent loss.
You also don’t have to track all fundraising KPIs to run a successful non-profit; simply choose the KPIs that will help you achieve your organization’s current and long-term goals.
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