As fundraisers, you’ve probably read every article on Key Performance Indicators (KPIs) to measure fundraising success. But those KPIs probably aren’t the best measure of success in a 2020 that has thrown us all some real curveballs.
Because the Winkler Group has had the opportunity to serve more clients in 2020 than in any other year, we have seen what has worked and what hasn’t. Based on our first-hand experience, we suggest these four KPIs to measure your fundraising success in this unprecedented year:
The Number of Times You Effectively Communicate with Your Top Donors
Focusing on your current donors is as important now as it has ever been. You will generate more revenue by segmenting and prioritizing your top and mid-level donors and then building those relationships.
Therefore, the number one KPI we suggest for 2020 is measuring donor cultivation. Calculate the number of times you personally reach out to your lead donors. Divide and conquer! Leverage your board members and ask them to check-in and thank donors for their continued support.
How many times is appropriate? If you reach out to your top and mid-level donors five to six times a year through personal touches (phone calls to ask their input, hand-written notes, zoom calls, outdoor lunch), you will steadily see an increase in your major gift numbers. But make sure it’s meaningful—don’t just send an email to check it off a list.
If you don’t cultivate your donors—another organization will. The trend since the 2008 recession is fewer donors giving larger gifts to fewer organizations, and we are seeing this play out in the capital campaigns and major gift fundraising efforts we lead. If your organization is not building a relationship with your major donors, they will give elsewhere. The holidays are the perfect time to demonstrate and articulate gratitude to your top donors!
Cost per Dollar Raised: Less Events, More Cultivation
Historically, organizations have relied heavily on fundraising events to generate revenue and raise awareness. Because of COVID, however, most nonprofits were forced to pivot from the traditional in-person event to either a virtual event, micro-appeal, or different means of recovering funds.
We see this pivot as a blessing in disguise. The average cost to raise a dollar through traditional fundraising events is $.50—not to mention the countless number of hours invested from staff and volunteers. While events are fun, they offer very little opportunity to cultivate donors after the event is over. The ROI simply isn’t there.
Instead, measure the effectiveness of your virtual event, micro appeal, or other fundraising recovery plan. If a particular effort was successful, make plans to continue it in 2021. And consider giving up your gala for good.
Stumped About How to Demonstrate Fundraising
Success to Your Board this Year?
We can help. Schedule a 15-minute virtual session with one of our consultants!
Donor Retention: Little Increases Have Big Impact
In the early months of the pandemic, we saw new donors flooding into organizations—and not just those on the frontline. Because donors like to solve problems, their contributions were their way of doing something in the face of the pandemic.
The challenge for us as fundraisers will be keeping these new COVID donors because the retention rates for new donors hover around an abysmal 20%.
The Fundraising Effectiveness Project estimates that if an organization (one that raises at least $1 million per year) raises its donor retention rate by just 1%, they will add $19,692 to their bottom line the following year. If they raise their retention rate by 10%, that’s $196,920 in new revenue the next year. And if retention rates rise year after year, these results are compounded for even greater growth.
So make donor retention one of your critical KPIs. Strive to keep your new donors and vow to lower your donor attrition rates. The results will surprise you.
Make Your Donors Feel Like They Are Part of the Team
This last KPI can’t be measured, but it’s still worthy of mentioning.
Your donors are the key to your success. And yes, they are savvier today than ever before. They want to feel like their dollar is making an impact on an organization, so treat them the way a corporation would treat their investors. Communicate with them in real and meaningful ways.
Personally communicating with all your donors is impossible, so look at past giving history or conduct a wealth screen to prioritize those with capacity and affinity. The more you can make these major donors feel like an insider—and demonstrate the impact of their gift—the more they will invest in your organization.