While some nonprofits can get lucky with big donors, fundraising is more than just a game of chance. There are many elements that can influence your nonprofit’s fundraising results, from the goals you set to the software you use. To prepare your organization for long-term success, it’s vital to develop a data-driven strategy to guide your efforts.
We’ll explore the following points to help you start making the most of your data:
- What Is Data?
- What are Key Fundraising Metrics to Track?
- 3 Ways to Use Data
With the right approach, you’ll be able to leverage your nonprofit’s data both internally and externally to improve the performance of your campaigns and share your successes with supporters. Let’s start by delving into the basics of data.
What is Data?
Data refers to the information your nonprofit gathers throughout its fundraising campaign to identify trends and gaps in performance. While there’s a wide range of data that you can collect, focus on the numbers that are most meaningful to your specific goals and interests to get the most out of your analysis.
NPOInfo’s guide on donor data management recommends the following best practices for keeping all of your information organized and accurate:
- Store all of your data in one place
- Create data entry guidelines
- Review your data on a regular basis
- Segment your data into relevant categories
By taking this data and identifying specific fundraising metrics to focus on, your nonprofit can measure its progress toward a goal and its performance compared to past results. This way, you’ll be able to recognize if your approaches are working or if you need to make further adjustments.
What are Key Fundraising Metrics to Track?
Be selective with the fundraising metrics you choose to measure. Focusing on a few core metrics allows you to discover actionable insights to inform your decisions without getting overwhelmed with irrelevant data points.
Some of the most common metrics to consider tracking include:
Donor Retention Rate
According to Double the Donation, donor retention rate refers to the percentage of donors who continue to support your organization after making one or more gifts in the previous year. To calculate this number, divide the total number of this year’s donors by the total number of last year’s donors and multiply that by 100.
Donors This Year / Donors Last Year x 100 = Donor Retention Rate
The Fundraising Effectiveness Project notes that, in 2022, nonprofits experienced a decrease in retention among new donors, repeat donors, and recaptured donors. This makes it all the more important to keep an eye on your individual nonprofit’s donor retention rate. This way, you can determine whether you need to take another look at your stewardship plan or step up your donor recognition efforts to keep more supporters invested in your mission year after year.
Donor Lifetime Value
Donor lifetime value (DLV) refers to the average amount of funds you can expect to receive from a single donor throughout their entire involvement with your nonprofit. By calculating DLV, you’ll be able to determine whether the time and resources you put into acquiring donors are worth the value you receive back from gifts in the future.
To calculate your DLV, multiply your average annual gift size by the expected duration of a donor relationship.
Average Annual Gift Amount x Years a Donor Gives = DLV
The beauty of this metric is that it illustrates the true value of your fundraising efforts. Even if you were to break even during a fundraising event, you can factor the lifetime value of newly acquired donors into the event’s overall success.
Number of Gifts Secured
Put simply, your nonprofit’s number of gifts secured refers to the number of gifts you received within a certain period of time. This is an easy and effective way to measure a campaign or event’s performance and compare it to fundraising initiatives from past years. To calculate this number, count up the number of donations you received during the period of time you’re looking at.
This metric allows you to determine how well donors are responding to your fundraising appeals. You can even separate these gifts into categories, such as monthly or major, to gain greater insight into which groups of supporters are actively invested in your nonprofit.
Donor Acquisition by Source
By keeping an eye on the number of donors you acquire from each fundraising or outreach method you employ, you’ll be able to determine which channels they respond best to. To calculate your donor acquisition by source, simply count the number of new donors that started contributing to your organization from each communication channel.
For instance, you could note the number of new donors who participated in your social media fundraising campaign or record how many first came into contact with your organization through your annual fundraising event.
Matching Gift Percentage
Has your nonprofit tapped into the full potential of corporate philanthropy and matching gifts? Calculating your matching gift percentage provides a more in-depth answer to this question. Divide the number of matching gifts you’ve received by your total number of donations and multiply that number by 100.
Matching Gifts Received / Total Gifts x 100 = Matching Gift Percentage
This metric can reveal whether you need to put more effort into promoting matching gifts to your supporters so that more people take advantage of the opportunity to amplify the impact of their gifts.
3 Ways to Use Data
There are numerous ways that data can come in handy for your nonprofit, from screening prospects to tailoring messages to donors. Let’s explore three impactful ways you can put your data to use:
1. Set Data-Driven Goals
Whether you’re diving into a multi-year capital campaign or your first foray into fundraising, determine the metrics you’ll focus on alongside your goals so that you can measure your performance throughout your campaign.
Consider creating an internal dashboard to display your goals, progress, and trends in performance. This way, everyone at your nonprofit can have a real-time view of how their efforts are paying off.
2. Report Impact
By conducting a social impact assessment, your nonprofit can gather powerful insights into how you’re making a difference in the lives of those that you serve. By sharing this information with donors, you’ll ensure that they understand how exactly their contributions play a role in your impact, inspiring them to continue supporting your mission.
After your events or campaigns end, display key data points in visually-engaging infographics and share them widely on your website, social media posts, and email newsletter to promote your nonprofit’s work.
3. Identify Improvements
Data can both call attention to your nonprofit’s successes and help your team determine areas for improvement to boost your results in the future. For instance, if your matching gift percentage isn’t where you’d like it to be, you might consider upgrading your donation page to include a matching gift search tool for donors to check their eligibility.
With proper nonprofit data collection and management, you’ll be well on your way to gathering and reporting insights into your organization’s fundraising performance. As you share your impact with stakeholders and supporters, remember to supplement the data you present with stories of your beneficiaries or volunteers. This makes it easier for people to empathize with those your nonprofit serves and better understand your mission’s importance.
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