Experts agree that the first important step to measuring results for PR and marketing is to select key performance indicators (KPIs) based on the organization’s goals. The same advice applies to non-profit organizations. Close tracking of carefully selected metrics enables organizations to identify effective strategies to pursue and ineffective strategies to revamp or abandon.
“If your analytics aren’t rooted in your goals, they are arbitrary. They are fluff,” asserts Jeff Rum, founder and CEO of Ignite Action.
Nonprofit KPIs are Fundraising Metrics
“To a certain extent, all nonprofit KPIs are fundraising metrics. Given fundraising’s prominent position in a nonprofit’s operations, it is arguable that any and all success metrics are related, even if just peripherally, to the act of raising funds,” says Mark Kelly at Salsa Labs.
Fundraising metrics include:
- Gifts secured (the number of gifts received over a certain time period),
- Donation growth,
- Average gift size growth, and
- Percentage of pledges fulfilled.
Essentially the same metrics can be applied to individual fund-raising campaigns to measure effectiveness. Giving metrics can also be applied to A/B testing of creative elements in the fundraising campaign.
Nonprofits can also track donation retention metrics such as:
- Donor retention rate. the number of contributors who donate again,
- Year-over-year donor growth. How much the donor base has grown (or shrunk) over a year.
- Recurring gift percentage. The portion of total gifts from recurring donors.
- Giving capacity. An informed estimate of how much money your donors are able to give. It requires prospect research and wealth screening software.
- Conversion rate. The percentage of donors who responded to a call to action.
- Outreach rate. How often the nonprofit contacts donors during a time period.
What’s the Real Goal of a Nonprofit?
Nonprofits can usually track such fund-raising metrics easily enough. However, a nonprofit’s goal is not simply to collect donations. Their mission statements frequently state vague and lofty goals that are difficult to measure. Mission statements might say the nonprofit exists to increase awareness about a given topic, serve a certain underserved population, make people better citizens, or to “affirm the dignity and worth” of an underprivileged population, write John Sawhill and David Williamson for McKinsey & Company. The late John Sawhill was a director in McKinsey’s Washington, DC, office. David Williamson is a director of communications at the Nature Conservancy.
The Nature Conservancy’s mission is to protect bio diversity by protecting habitats. For years it measured its success by counting donations and acres of land preserved, explain Sawhill and Williamson. Those metrics indicated success, but biodiversity continued to decline, even on its own properties. The organization realized its “bucks and acres” metrics were not working.
The Nature Conservancy eventually adopted a more complex measurement strategy it called the “family of measures.” It refocused on acquiring larger properties and tracts of contiguous properties, examining potentially harmful development activities outside its properties, and restoring natural environmental dynamics on its properties.
Sawhill and Williamson recommend three possibilities for a nonprofit with an ambiguous mission:
Narrowly define its mission so it can measure progress directly. The risk is oversimplifying the mission statement and, consequently, treating the symptoms rather than the cause of a particular social problem.
Invest in research to study if the organization’s work has made an impact. Follow up studies can determine if people it served are better off than similar populations who were not served.
Develop micro-level goals that could imply success on a larger scale. The Chesapeake Bay Foundation (CBF), which seeks to preserve the health of the Chesapeake estuary, identified nine environmental metrics, such as water clarity and size of surrounding wetlands. The advantage of those metrics is that government agencies already collect the information.
All nonprofits can benefit from measuring sentiment toward the organization in news articles and social media posts. Social media posts from constituents can be deemed more important and carry more weight in media metrics.
Bottom Line: Nonprofits face unique measurement challenges. Because of the wide range of organizations in the sector, one set of metrics won’t work for all nonprofits. Measuring progress toward often ambiguous goals can be difficult. Nevertheless, with creativity and perseverance, nonprofits can measure their performance and gain worthwhile insights to help improve services.