Donor management is a complicated matter. When done right, it can significantly improve your fundraising. Done wrong, however, it can cost you.
Thankfully, there are multiple ways to maximize your fundraising efforts and profits. First, your CRM is a powerful tool in donor management. If you haven’t implemented a CRM yet, it streamlines your donor relationships and enables you to reach out and track engagement seamlessly. Accompanied by the right tracking software and tools, your CRM will drive a significant boost in your fundraising efforts.
The next step to maximizing results is to know where your fundraising stands. To achieve this, there are several key metrics you need to consider before you plan your next fundraiser. Most of that information will come from past fundraising campaigns, including donor ROI, donor giving capacity, the percentage of gift matches, donor retention rate, and donor conversion rate. The other portion relates to your fundraising objectives and future plans.
Five Fundraising Metrics Every Nonprofit Needs to Track
The time, effort, and resources it takes to launch a successful fundraising campaign can seem endless. And if you’re not careful, it may result in a bigger cost than you can afford.
In order to determine your donor return on investment, you need an accurate calculation of campaign costs. Calculating the charges to your nonprofit should include the following:
- The cost of postage and direct mail pieces
- Any costs associated with staff and board time, for activities such as phone calls, proposal development, planning, and emails
- The total cost of the event if you hosted an in-person event
- Marketing costs which can include designing marketing materials, advertising costs, and the materials used to market the event or campaign
These are only some examples of the costs your campaign will incur. Additionally, there may be other costs associated with your event, such as volunteer uniforms, transportation, vendors, etc., that should be included in your calculations.
Subtract your costs from the total donations raised in a given campaign. From there, you’ll want to divide the total by the amount spent and multiply by 100 for a percentage rate. That calculation will provide you with the percentage rate for your ROI.
Your ROI should always be a positive number. Otherwise, you’re spending more than you’re making on a campaign or event. If this is the case, it might be beneficial to experiment to determine what is or isn’t working well with your fundraising efforts.
Donor Conversion Rate
Conversion rate is a marketing and sales term that breaks down how many of the people who saw a campaign took the desired action. In a nonprofit’s case, it refers to how many of the people your campaign reached became donors.
Determining the number of people who donated after a fundraising initiative will help you choose the best methods to get your donors. In addition, tracking this metric will help your campaign planning for future fundraisers and maximize your organization’s efforts.
Donor Giving Capacity
Donor giving capacity is a calculation that helps estimate the potential donation your repeat donors provide. It is hard to measure when circumstances may alter this number, but it is an effective way to calculate future contributions.
To estimate your donor giving capacity, start by looking at their donation history. See if there is a trend within your organization’s CRM. Many CRMs provide a linked service that makes it easy to determine an individual’s donation capacity or some type of wealth calculator that can be used to estimate donor giving capacity. Understanding and estimating donations ahead of time may help your fundraiser’s goals by aligning your ask with the donor’s capacity to give. This metric is especially important for corporate donors and individuals who are committed to your cause since they are more likely to return year after year.
Donor Retention Rate
Repeat donors are notorious for contributing more significant donations than first-time donors. Because of this, relationship building is crucial for retaining yearly donors. In addition, their contributions contribute to your organization’s year-over-year numbers and help your strategy for future fundraising efforts.
The Percentage of Gift Matches
Employees increasingly choose organizations that align with their personal values. And one way we see this is by them working for companies with a stronghold in corporate social responsibility. This translates into more and more corporations prioritizing gift matches.
To maximize your revenue, ensure your supporters know about gift-matching programs available. Additionally, aligning your nonprofit with corporate sponsorship is a smart way to drive more donations. And measure the impact of these campaigns as you plan your activities.
Top Methods To Reach Prospective Donors
Because you want to maximize your fundraising efforts, knowing the best methods to reach prospective donors for the most impactful campaign is essential. There are many ways to approach donor outreach, such as direct mail marketing, phone calls to warm leads, email newsletters, social media, and articles in local newspapers and publications, just to name a few. Your CRM software will help your organization sort through the data from previous years to determine which methods are the most effective for your donor list.
Each goal your organization has for your fundraising will also help determine which types of fundraising will be most effective. There are several approaches to fundraising your organization may want to consider.
- Email Marketing is one of the most effective ways to attract donors and receive donations through a call-to-action. Because a CRM can segment email marketing to fit your fundraising needs, many nonprofit organizations use this method frequently. Additionally, email marketing is easy to track the effectiveness of each campaign.
- Crowdfunding has gained popularity because of its easy-to-use functionality. Many organizations choose this approach because it captures the attention of new donors with less effort than a traditional event. Crowdfunding is an online fundraiser typically shared through social media and email marketing. It typically nets a bunch of smaller donations that add up quickly to a large amount.
- Peer-to-Peer fundraising leverages the relationships between existing donors and their friends and family. Donors are encouraged to reach out to their network of friends and family to gain more monetary support for a fundraising event or goal. In addition, because there is trust built between donors and potential donors, there is a greater chance that new donors will support the cause or goal.
- Corporate matching is a great way to maximize donations. Employees will donate money to a fundraiser and request their employer to match the donation, doubling the funds raised. Some employers have specific guidelines regarding donation matches. However, once approved, corporate matching can be quite effective. The most significant caveat is that most employees don’t realize their employer is willing to match their donation, or many don’t ask. One way to combat this is to create a template letter or email for employees. By providing them with the words and key information an employer needs to match the donations, you increase the chances employees will ask.
The success of your nonprofit’s fundraising depends on variables that may be out of your control. But, planning for success is achievable when you know your key metrics to track and the best methods to reach potential donors. Schedule a free consultation today for guidance on your nonprofit fundraising strategy!