kpi’s for fundraising …measurements for success webinar presented by kim olmsted of kim j...

KPI’S FOR FUNDRAISING…MEASUREMENTS FOR SUCCESS

Webinar presented by

Kim Olmsted of Kim J Olmsted Consulting

Key Performance Indicators for Fundraising

KPI

What are they?What is Relevant?What’s New?

KPI - Key Performance Indicators

Are a set of measurements that a company or organization uses to assess progress or success towards strategic or operational goals.

Working Definition

Similar to Business Development, Nonprofit Development offices are

concerned with many similar healthy business goals

Where Are We Today and Where are We Going?

How do I grow my business revenue?

How do I sustain my revenue?

How do we build loyal customers?

Who are my potential customers?

How do we compare with our competition?

How do I grow my fundraising revenue?

How do we maintain our fundraising revenue?

How do we build loyal donors?

Who are our prospective donors?

How do we compare with our peer organizations?

For Profit Business Development

Nonprofit Development

Four Most Relevant KPI’s

Fundraisers, donors, gifts, and prospects are

variables we measure to build relationships to raise funds.

This combined with our business development objectives helps to define our most relevant key performance indicators.

1. Fundraising Revenue2. ROI and CRD3. Donor Counts (Donor Acquisition and Attrition)4. Prospect Pool (Prospect Pool Growth & Prospect Engagement)

Relevant KPI’s to Fundraising

COMPONENTS OF GOOD KPI’S Based on Benchmarking Goal Oriented Conveyed Concisely Agreed Upon Achievable

KPI’s are usually based on Benchmarks

Fundraising Revenue Last Fiscal year was $1.3M

Our Total New Donors Last Fiscal year were 215

and may use Comparative Data Annual Fund 2010 = $590,000; 2011 =

$612,000; 2012 = $600,000 (Stagnant)

Benchmarking

Fundraising Goals for 2015Increase overall fundraising by 3% over last yearDecrease annual fund lapsed donors by 2%Increase number of major gift prospects to 1000Obtain first 10% of campaign goal

Goal Oriented

Be clear in expectationsNot a mission statement

Goal: We will raise $500,000 this year for major gifts. KPI is based on all gifts fundraised in this fiscal year including cash, stock, pledges, and planned gifts.

Conveyed Concisely

Fundraisers’ insights are crucial to goal settingBalances the weight of data obtained in benchmarking with insights into fluctuations in relationship buildingLead the motivating effort

Agreed Upon

Based on benchmarking and fundraising insights, reasonable goals are set and achievableLack of motivationMoving forward from a successful goal“Stretch” Goals?!?

Achievable

Calendar of KPI’s

Measured over a specific time periodMonthly, Quarterly, Annually

Consistent Accounting for comparative KPI data for benchmarking and goal setting

1. Fundraising Revenue

= Sum Total of All Fundraised Gifts

Which gifts count: See CASE and NCPG

2. ROI and CRD

Revenue

/Expens

esExpens

es/

Revenue

ROI = Return on Investment

CRD = Cost to Raise a Dollar

2. ROI and CRD

$1,500,000

/$460,0

00$460,0

00/

$1,500,000

ROI = Raise $3.26 for every $1 spent

CRD = Cost $.31 for every $1 raised

2. ROI and CRD - Expenses

Some examples of expenses: Salary and compensation of all fundraising staff Salary and compensation of all prospect research staff Salary and compensation of all stewardship staff Salary and compensation of staff maintaining social media Travel Expenses Software Expenses Online research resources Direct mail costs Event expenses Thankathon expenses Social Media expenses

2. ROI and CRD - Analysis

Maximizing revenues and achieving financial efficiency

If ROI is in the negative, spending more than you are gaining, your fundraising efforts are not achieving revenue goals.

If CRD is high compared to previous years, investigate all fundraising programs to see where you might find greater efficiency

Positive ROI and CRD’s can be reported to your donors and prospects

The Nonprofit Fundraising and Administrative Cost Project13, indicates that most organizations spend between .15 and .24 for every $1 raised.

2. ROI & CRD by Program/InitiativeBreaking down ROI and CRD by your programs and initiatives Direct Mail On Line Solicitations Pledge Retention Social Media Major Giving Planned Giving Events Stewardship/Thankathon

3. Donor Counts

Donor Count = Total # of Donors who gave a gift within a specific timeframe

Donor Acquisition = Donors newly acquired who gave for the first time (ever) within a specific timeframe and are compared to your overall donor count.

% of New Donors = New Donors

Total Donors

= 8% of donors this year are new donors 935

11,050

3. Donor Acquisition

Also expressed as a rate of increase or decrease when compared from year to year.

% New Donors =

(Current New Donors – Last New Donors) x 100Last New Donors

(935 – 855) x100 855= 9% increase in new donors this year over last

3. Donor Acquisition – New Donors

Lapsed Donors = Donors who gave within a specific timeframe but did not give in the same following timeframe. Lapsed Donors =

Total Donors Previous FY – Donors who gave in both Previous and Current Fiscal Year

FY 14 FY 14 & 15

5035 – 2013 = 3022 Lapsed Donors

3. Donor Attrition & Lapsed Donors

Donor Attrition = The loss of donors who usually give from year to year. Using the previous slide which indicates our lapsed donors, we can achieve an attrition rate.

Lapsed Donors

Total Donor Count of Previous Year

3022 = 60% Attrition Rate

5035

3. Donor Attrition

3. Donor Acquisition/Attrition Comparison

For every100 donors Acquired

103 were Lost

Loss through lapsed donors

2014 Donors

Per the Urban Institute’s 2015 Fundraising Effectiveness Report

3. Donor Count – Program/InitiativeBy Program

Annual Fund

Major Giving

Planned Giving

By AffinityGoverning Board

Staff

Volunteers

By ChannelEmail

Direct Mail

Social Media

Events

3. Donor Count - Analysis

Which is more cost effective…acquiring a new donor or lowering your attrition rate? ROI and CRD both indicate that nation-wide it is more cost effective to steward and maintain an ongoing donor relationship than it is to acquire a new one.

4. Prospect Pool

Prospect Pool (universe of all known prospects to your organization); contains a variety of prospects at various capacities and with a variety of affinities; cold, warm and hot and have a readiness to give indicator.

Measuring the attainment of prospects as well as the distribution of prospects are two key performance indicators little known.

Attaining new prospects through event conversion, volunteer conversion, acquiring lists or referrals are some of the possible methods of growing your pool. Monitoring your pool by measuring the past to the current, will provide a rate of growth.

New Prospect Pool – Past Prospect Pool Past Prospect Pool

4. Prospect Pool – Rate of Growth

4100 - 3670 3670= 12% IncreaseTo keep pace with the development department, your prospect pool should keep pace with need. Major Gift Officer’s on average receive 15 – 20 new prospects per year. In my experience 10% growth is sufficient, provided your pool begins 3 times larger than your portfolio assignments.

4. Prospect Pool - Rate of Growth

4. Quality of Prospect PromotionTo Note:Each portfolio for a major gift officer should be balanced, to ensure the greatest probability of raising gifts over time. (150 – 200 prospects) are comprised of the following: Capacity: In the range that your organization has

identified as major giving (ex. $1000 - $1M) broken into gift ranges. (A 1,000 – 2,500, etc.). Portfolios should contain a broad range of these.

Affinity: Hot, warm, cold: Portfolios must contain a balance of each.

Readiness to Give: This can be a time range (1 year, 2 years, 3 years, or by date). Portfolios should contain a balance of these.

• Major Gifts KPI’s are based on knowledge of our industry:

• It takes 18 to 36 months to move a cold prospect to solicitation

• A prospect will give based on timing, project, who asks

• Gift officer’s spend more than 65% of their time on fundraising

• Gift officer portfolios (averaging 100 – 200) are balanced amongst Capacity, Affinity, Readiness to Give

4. Prospect Engagement

A development office can tell their effectiveness of reach and an understanding of reaching goal by measuring the total effort of their fundraising team. Total # of Prospects with a Strategy/Plan for solicitationTotal # of Proposals with solid ask amountsTotal # of Closed Gifts

4. Prospect Engagement KPI’s

Total # of Prospects with a Strategy/Solicitation PlanOf all prospects in a portfolio, 2/3 should be in cultivation or solicitation, therefore should have solid strategies.

Of 300 prospects, you have 198 solicitation plans, that would roughly equal 66%, achieving a 2/3 goal.

4. Prospect Engagement KPI’s

Total # of Prospects with Proposals and Solid Ask Amounts. Roughly 50% - 65% of all proposals result in a gift. If the ask amount has been well vetted amongst all fundraising and prospect research team, you can estimate progress to goal.

4. Prospect Engagement KPI’s

Total # of Closed Gifts. Of all portfolios, what percentage resulted in closed gifts? Also review the ask amounts versus the actual gifts obtained.

# of Closed Gifts/All Portfolio Assignments$ of Gift Amount/$ of all Asks

4. Prospect Engagement KPI’s

Moves Management – (prospect identification system from identified to stewardship) may be used for individual fundraiser goals, but do not roll-up neatly into a KPI to represent fundraising efforts. Here’s what it does for your shop:• Organize prospects along the relationship path• Tells you how many prospects are ready to be

solicited• Used in predictive modeling – how long to

develop a prospect for your organization• Can help balance your portfolio

Note: Moves Management

KPI’s – Reaching Goals

How do I grow my fundraising revenue?

How do we maintain our fundraising revenue?

How do we build loyal donors?

Who are our prospective donors?

How do we compare with our peer organizations?

All 4 All 4 #2, #3, #4 for

each fundraising program

#4 All 4

Nonprofit Development Examine this/these KPI(s)

THANKS

A special thanks to The Databank, Technology for Change, for sponsoring this webinar. Visit www.thedatabank.com for software for fundraising.

Any follow-up questions can be addressed to Kim at kim.olmsted@gmail.com. Please leave your name, organization and a contact phone as well.

Visit www.kimjolmsted.org for more information on fundraising, fundraising services and analytics.