Many nonprofits operate with limited resources like staff time and budget constraints. Because of this scarcity, you need to make the most of every resource to launch successful fundraising campaigns and secure the support you need to generate your impact.
Whether your goals are to steward major donors or increase your recurring gift revenue, setting and tracking key performance indicators (KPIs) is essential to keeping your efforts on track. In this guide, we’ll explore the basics you need to know about nonprofit KPIs and how you can start using them to enhance your campaign results. Let’s start by discussing the specific benefits of tracking KPIs.
Why are nonprofit KPIs important?
Nonprofit KPIs are specific, quantifiable metrics used by nonprofit organizations to measure how well their operations, projects, and strategies are performing when it comes to achieving their mission.
Consider these benefits of tracking KPIs for nonprofits:
- Informed decision-making. By tracking KPIs, you can make data-driven decisions that enhance the effectiveness of your programs and resource allocation.
- Ability to measure progress toward goals. Tracking KPIs allows you to set clear benchmarks and monitor your progress in a quantifiable way. This not only helps in adjusting tactics and strategies to meet objectives more effectively but also motivates staff and volunteers by clearly demonstrating how their efforts contribute to your organization’s overall mission.
- Improved impact reporting to stakeholders. According to Double the Donation’s donor recognition guide, a key step in retaining your donors involves sharing how you used their funds to make a difference. This transparency helps illustrate the direct outcomes of contributions and aids in securing further funding by showcasing the effectiveness and accountability of your organization.
Overall, KPIs are invaluable tools that allow you to continuously refine and enhance your strategies, leading to improved results over time. For example, let’s say that your organization recently hosted a silent auction that had a high attendance rate and return on investment (ROI). To raise even more the next time around, you might decide to increase your auction item pricing in some of the most popular categories.
This strategic adjustment, informed by data gathered from previous events, helps ensure that your nonprofit not only meets but exceeds its fundraising goals, ultimately advancing its mission more effectively.
How do you choose and measure nonprofit KPIs?
With countless potential KPIs to track, nonprofit organizations must strategically select those most relevant to their specific situation and priorities. Focusing on too many KPIs can dilute efforts and resources, making it difficult to achieve meaningful insights and results.
Let’s look at a few steps that your nonprofit should take to choose and measure KPIs:
- Define your campaign goals. Start by clearly outlining what you want to achieve with your campaign. Whether it’s increasing donor engagement, raising a certain amount of funds, or expanding outreach efforts, having specific, measurable, achievable, relevant, and time-bound (SMART) goals will help guide which KPIs are most appropriate to monitor.
- Equip the right tools. Whatever software you’re using to facilitate your nonprofit’s campaign, ensure it has reporting capabilities that make it easy to view your KPIs in real time. For example, as SchoolAuction.net’s silent auction guide points out, your silent auction tools should come with modern features such as mobile bidding, user-friendly registration, and intelligent donor data tracking.
- Maintain data hygiene. While it’s important to collect campaign and donor data to inform your nonprofit’s strategies, it’s equally important to ensure that your staff and volunteers can easily access everything they need to carry out their responsibilities. Regular audits and clean-ups of your data systems will help prevent errors and outdated information from skewing your KPI analysis and decision-making processes.
Additionally, you can research industry benchmarks to compare your performance against similar organizations. In doing so, you can gain insights into where your nonprofit stands in relation to your peers, which can spotlight areas of strength as well as opportunities for improvement.
What are some essential KPIs for nonprofits to track?
Understanding which metrics are most impactful can guide you in evaluating your performance and optimizing your strategies. If your nonprofit isn’t sure where to start, we’ll discuss some common KPIs that are worth tracking:
- Fundraising return on investment (ROI). This KPI measures the efficiency and effectiveness of your fundraising efforts by comparing the amount of funds raised to the cost of conducting fundraising activities. Tracking this can help your nonprofit understand how well your fundraising strategies are working and identify areas where you can reduce costs or increase revenue.
- Conversion rate (by channel). This KPI helps you understand the effectiveness of different fundraising and communication channels in converting prospects into donors. For example, if you notice that many donors have been accessing your giving page through your text donation number, you might prioritize building out your mobile contact list moving forward.
- Donor retention rate. This crucial KPI measures the percentage of donors who continue to contribute to your organization year after year. Since it’s often more cost-effective to retain existing donors than to acquire new ones, this metric is essential for planning effective engagement and stewardship strategies that foster long-term loyalty and increased giving.
- Volunteer retention rate. Ensure that your volunteer appreciation strategies are working by calculating your nonprofit’s volunteer retention rate. You can calculate this by looking at the percentage of volunteers who stay engaged with your organization over a specified period of time.
- Average gift size. This KPI tracks the average amount donated per gift or transaction, providing insights into donor giving patterns. Monitoring this metric helps you assess the performance of your fundraising appeals and strategies, and it can indicate trends in donor behavior, such as increases or decreases in generosity over time.
- Matching gift rate. This KPI measures the percentage of donations that are eligible for matching gifts and successfully secured through corporate matching gift programs. Tracking this rate helps your nonprofit understand how effectively you are utilizing these programs, which can significantly increase the total amount of donations you receive without having to ask donors to contribute more.
To ensure that you are on course to meet your goals and make the most of your strategies, schedule regular meetings to review your KPIs. Depending on the campaign’s timeline and complexity, this could be monthly or quarterly. In doing so, you can assess whether your methods are working and whether you need to make any immediate adjustments to meet your objectives.
As you routinely track and review your KPIs, it’s equally important to celebrate when your goals are achieved. Whether you’ve just executed a standout school auction or completed an engaging peer-to-peer fundraising campaign, be sure to thank everyone who contributed to your success. For example, spotlight key donors on social media, shout out staff members, acknowledge volunteers, and communicate all the impact your nonprofit has been able to accomplish with their help.
