kpi’s for fundraising …measurements for success webinar presented by kim olmsted of kim j...
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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 [email protected]. Please leave your name, organization and a contact phone as well.
Visit www.kimjolmsted.org for more information on fundraising, fundraising services and analytics.