10 Data Metrics Every Nonprofit Should Be Tracking
At first glance, data metrics appear to be just sets of numbers. But within these numbers are stories. The numbers demonstrate your impact. They measure how far your organization has come and how far it has yet to go. Meaningful data becomes insightful information, helping set goals. But which data matters? Though some of the metrics might differ across organizations, the 10 listed below are those every nonprofit that accepts donations should be tracking as part of its giving strategy.
Remember, though, that none of these metrics will mean much if your donor data is incomplete or inaccurate. Using a donor management software solution like the DonorWERX suite improves your data’s quality.
Organization-Specific Data Metrics
1. Data Metrics That Show Your Impact
Track metrics that help communicate your mission and your efforts toward fulfilling that mission. The exact data you choose to capture will be specific to your nonprofit’s goals and activities.
Donors want to know their contributions matter. They want to know what impact their donations to the organization make. You need to show your impact with relevant metrics. What is impact? Impact is more than outcomes or activities; impact demonstrates the difference your activities made on the outcomes. For example, if your agency provides clothing donations, you might show your impact with a metric such as: last year, the organization clothed 500 families, 15 percent more than the prior year.
2. Information That Describes Your Organization
You should be able to easily share basic stats. about your agency. For example, do you know the number of employees? Volunteers? What were last year’s expenses?
Fundraising Data Metrics
Simply knowing how much money was raised is inadequate. For more effective fundraising, your organization should know the following key metrics.
3. Cost per Dollar Raised
This metric answers the question, “Did we make money on this?” “This” can refer to a specific donation appeal, fundraising event, or giving efforts overall. Knowing the answer helps guide future campaigns.
To calculate, divide the expenses by the revenue. If less than one, then whatever you are measuring made money. When the number is more than one, your strategy lost money. If equal to one, then the costs equaled the money raised, so you broke even. The goal is to achieve a figure as close to zero as possible.
For example, let’s say your organization sponsors a fundraising dinner that received $3,000 in donations. The. dinner cost $600 in expenses. Divide $600 by $3,000 to find your cost per dollar raised. So, 600/3000=0.2. You spent 20 cents on every dollar the dinner raised.
4. Donor Retention Rate
The cost of acquiring new donors tends to be expensive, often exceeding the amount they give for the first year or two. Equally, if not more, important is retaining your current donors. To track your success at keeping your donors active, measure your donor retention rate. Donor retention rate refers to the percentage of donors from one time period who return to give another gift in another time period.
To calculate, divide the number of returning donors this time period by the total number of donors in the prior period. For example, if 100 of last year’s 200 donors returned to give gifts again, then you retained half of your donors and lost half to attrition. 100/200=.5
The goal is to improve your donor retention rate over time. But if you’re interested in seeing how you compare to other nonprofit organizations, the average donor retention rate of more than 10,000 nonprofits across the United States was 43 percent in 2018. Only 43 percent of 2017 donors returned to make a donation to the same nonprofit in 2018.
5. Average Gift Size
Like most metrics, the average gift size is best used when tracked on a recurring basis to see if your gift size is growing, stagnating, or shrinking. To calculate average gift size, divide the revenue for a certain time period or particular fundraiser by the number of gifts you received in that same time or for that same event.
Measure the average gift size:
- To gauge your progress at the same event year after year.
- For all of your events to figure out which events bring in the largest donations
- To track general changes over a fixed time frame (like quarters or a year).
Negative changes indicate you should refocus your efforts on different events or on increasing gift amounts.
6. Lifetime Donor Value
This metric calculates the monetary amount you can expect from the average donor. The lifetime value predicts how much your typical donor will give over the course of your relationship. The typical calculation uses the formula:
Lifetime donor value = Lifespan × Average donation amount × Frequency of donation
“Lifespan” refers to the length of time on average that a donor has a relationship with your organization. See above for how to calculate the average donation amount. Figure out the frequency of donations by dividing the total number of donations made in a time period by the total number of donors in that time period.
A simpler way to calculate the lifetime donor value requires you to know your retention rate and average annual donation. First, figure out your attrition rate by subtracting your retention rate from one. Then, divide the annual gift by your attrition rate. For example, let’s say your retention rate is 50 percent and the average annual donation is $100. $100/(1-0.5) = $100/0.5 = $200. This predicts that the average donor will give $200 to your organization over time. If you lower your attrition rate to just 25 percent, then the lifetime donor value increases significantly, to $400 ($100/.25=$400).
Engagement Data Metrics
Engagement with donors inspires giving. Engaged donors not only tend to keep giving, but they also tend to give more.
7. Frequency of Communication With Donors
A communication strategy is an essential component for fundraising success. Part of that strategy should involve tracking your communications with donors, from the thank-you follow-up for a gift to in-person discussions at events. Use this metric in conjunction with other metrics, such as conversion rates, to help identify the ideal amount of contact with your donors.
8. Number of Asks
This metric is as straightforward as it seems. It simply tallies the number of times someone at your organization made a request for donations. It’s obvious, but bears stating: if you don’t ask, you won’t receive.
Digital Data Metrics
To maximize your fundraising potential, your organization should be using digital tools to reach donors and accept donations. If online giving is not yet incorporated into your fundraising efforts or your online strategies could be improved, schedule a free DonorWERX discovery call.
9. Online Giving
Figure out what percentage of donations come through online giving versus more conventional means. Increasingly, online giving is important, growing as a percentage of total revenue each year.
10. Email Conversion Rate
This metric helps you identify what messaging works best in terms of fundraising. You might find certain content or writing styles leads to more opens and click-throughs. Or you might find people are more responsive to requests at certain times of the day or specific days.
To calculate the rate, divide the number of people who donated by the total number of people emailed. Then multiply the number by 100 to get a percent. For example, if you sent out an email to 100 donors, asking them to follow a link to donate online and 30 followed the link to complete a donation, then your conversion rate for this email was 30 percent.