Tag: Tracking

Fundraising, Football, Conflict and Keeping Score

Jim Shapiro  |  Repeat
Scorecard

As Steven mentioned in yesterday’s email, I’ve been a football coach for a very long time. And for the record, my helmet when I played was not leather. 🙂

I’ve noticed some fun similarities between football and fundraising: 

  • There’s a season for both football and fundraising.  (But the best performers in both arenas practice all year long.)
  • Regardless of whatever the “hot new tactic” is, the fundamentals matter a LOT.  In football it’s blocking and tackling; in fundraising it’s things like your offer and donor segmentation.
  • Both have skills you can learn.
  • Both have teams that include people with different skills and responsibilities.
  • Both use data to measure success.

Fundraising, Football, Conflict & Keeping Score

Finally – but worth spending a moment on – there’s conflict in fundraising and in football.

On the surface, the conflict in football is more physical.  But there’s also conflict over who gets to play and who doesn’t.  There’s conflict between coaches over what plays to run.  (The game is often more draining mentally than physically.)

The same is true in fundraising.  There’s conflict between staff over the content and frequency of fundraising.  In smaller organizations there are often disagreements between Board and staff over fundraising methods.

The reason I bring this up is because football has one clear advantage over fundraising in this arena: keeping score is a lot easier.  When you try something one week, the scoreboard tells you right away whether it worked or not.

“Keeping score” and knowing whether your fundraising worked or not is more difficult – but it’s more important!  The coach in me is constantly encouraging organizations to measure their performance more closely. 

A question I ask all the time is, “What is your retention rate for your major donors?”  Too many organizations don’t know.  They haven’t “kept score” to see whether their fundraising efforts are effective at keeping their major donors around!  (And their Majors are often giving more than 80% of the total revenue an organization receives from individuals!) 

My encouragement to nonprofits goes back to one of the similarities between football and fundraising that I mentioned at the top: keeping score (measuring the performance of your fundraising) is a skill your organization can learn. 

Here are a few of the main metrics we advise nonprofits to track on an ongoing basis:

  • Overall donor retention rate
  • Major donor retention rate
  • # New Donors each year (broken out into New Donors and Reactivated Donors), and the total acquisition costs.  Use those numbers to calculate the Cost Per New Donor.
  • For each piece of direct mail: # Sent, # Gifts, Production & Mailing Cost, Gross Revenue.  Use that info to calculate % Response, Net Revenue and Return on Investment (ROI).  Of those, Net Revenue is the most important (not ROI).
  • For each email: # Sent, # Open, # Clicks, # Gifts, Gross Revenue.  Use that info to calculate % Open, % Clicks, % Conversion and Net Revenue.
  • In addition to tracking the metrics for each impact (email, letter, etc.), we also “roll up” the results for each campaign so we can track campaign efficacy.

That’s just a start, but it’s a good start.  If you learn the skill of tracking your performance and then “basing future decisions off of past performance,” your organization gets better faster at fundraising.  As a result, you’ll have a larger impact! 

What to Measure, and What to Evaluate, in Fundraising

Steven  |  Repeat
Three gauges.

This post is written for smaller nonprofits.

The goal is to show you what data to track, and then what to evaluate, in your fundraising.

Most small nonprofits don’t realize it, but every single thing they ever send to their donors is a test. It’s a test to see whether their donors respond or not. So these nonprofits are performing all these tests, and creating incredible data about what their donors like and dislike – and not paying attention to it.

My goal today is to give you a great start into what to track, and then what to evaluate, so that you learn as much as possible from all these fundraising experiments you’re performing.

And you’re not learning just for learning’s sake. You should be doing this because you will raise more money faster.

Example for You

Say you’ve sent an appeal letter at Thanksgiving for the last five years. If you track the right information every year, you will know which of those Thanksgiving appeals was most effective with your donors.

Then you can “repeat” and improve your best-performing Thanksgiving letter. That’s how save time and raise more money each year.

What We TRACK [LIST]

Here’s a list of the primary metrics we recommend tracking. (Of course there are more if you get into the details. These are the primary ones.) If you track these, you’ll be able to properly evaluate the performance of your main fundraising efforts…

  • Mail: # Sent, # Gifts, Total Expense, Gross Revenue
  • Email: # Sent, Open Rate, Click-through Rate, # Gifts, Gross Revenue
  • Event: # Invited, # attended, # who gave, Total Expense, Gross Revenue
  • Major Gifts Programs: # major donors, # gifts, Total Expense, Gross Revenue

I should mention that this assumes you have donor software that tracks every gift.

What We EVALUATE

If you track the right metrics, you can calculate and then evaluate the right metrics.

You can use the info above to calculate the metrics you should be using to evaluate the performance of your fundraising impacts.

For each of the types above, here’s how we evaluate performance. The metrics are listed more-or-less in order of importance…

  • Mail: Net Revenue, ROI, % Response, Average Gift
  • Email: Net Revenue, % Response, Open Rate, Click-through Rate
  • Event: Net Revenue, Average Gift per person, % of attendees who gave
  • Major Gifts Programs: Net Revenue, major donor retention rate, revenue retention rate

Like I mentioned earlier, you can go waaaaaay deeper into metrics for all of these. But today’s post is for the organization that wants to really understand and evaluate their fundraising – so that they can get better faster.

And if you want to see what this looks like in action for direct mail, grab our free proforma excel template for data tracking.

What We Don’t Measure

Now, you might notice that there are several things that we didn’t recommend measuring:

  • Complaints
  • Board Member reactions
  • Program Staff feedback

Of course, if Board members and program staff spot factual inaccuracies, you absolutely need to take their feedback. But as for whether they like it or not, or whether they think it will work, or whether they would prefer that you use different words, we don’t measure that.

Why? They are experts on your organization and your cause. They know far more than donors. But your fundraising should be aimed at donors, not experts! Your fundraising should use words and concepts that motivate donors to give gifts, not motivate in-house experts to give gifts.

#donorlove is in the data

One of the best things a small nonprofit can do is to establish a culture of tracking and evaluating everything fundraising.

In my experience, the organizations that do that tend to grow faster. They tend to raise more money. They also tend to have stronger relationships with their donors. Why? Because paying attention to what donors respond to is a pure form of #donorlove!