8 Ways to Measure Fundraising Success
How do you measure fundraising success? Many nonprofits answer this question by looking at the amount of revenue their organization brought in from a campaign or event. However, it’s worth digging deeper into your fundraising data to gain a clearer picture of the overall health of your fundraising efforts by looking at a few key metrics.
Analyzing data in multiple ways using these metrics helps your nonprofit celebrate strengths and determine where your greatest opportunities for future fundraising success lie. Use these eight indicators to gauge your fundraising success:
1. Return on Investment (ROI)
Understanding your return on investment (ROI) is critical to determining whether your fundraiser was successful. Fundraisers that merely break even or run at a loss aren’t effective. For fundraisers that do raise more money than they cost, a high ROI is a primary indicator of a successful fundraiser.
A fundraiser’s ROI is calculated as a percentage using this formula:
[(money earned – money spent)/(money spent)] X 100 = ROI%
For example, if you spent $2,000 on a fundraising initiative and raised $3,000, your ROI would be [($3,000-$2,000)/$2,000] X 100 = 50%. But if you spent the same amount and raised $5000, your ROI would be [($5,000-$2000)/$2,000] X 100 = 150%. ROI is by no means a comprehensive assessment of fundraising success, but it’s a solid starting point for many nonprofits.
2. Growth Rate
If your nonprofit runs an annual fundraising campaign or event, you’ll want to see how your success compares from year to year. Are your results staying the same, increasing, or decreasing, and by how much?
There are two main factors to consider when you analyze growth rate:
- Amount of money raised
- Number of donors or participants
Comparing the amount raised will help you determine your ROI over consecutive years and see whether it’s worthwhile to continue investing in the campaign or event. Meanwhile, examining the number of donors or participants from year to year will help you market your fundraising initiatives more effectively over time.
3. Retention Rate
How many of your donors or event participants engaged with your organization for the first time this year, and how many supporters from previous years were still involved this year? Breaking down these numbers can provide insight into what donor communication strategies are working and whether your nonprofit has opportunities to grow.
Donor retention and acquisition each benefit nonprofits in different ways. Finding new donors allows for more growth, while retaining existing donors is more cost effective. If your organization already has a high retention rate, you can likely invest in acquiring new donors. But if your retention rate is low, you’ll want to devote more resources to strengthening your relationships with existing donors to create a stable foundation for future growth.
4. Average Gift Amount
Knowing your organization’s average gift size can be helpful for understanding donor retention and acquisition success. To calculate this, just divide the number of gifts into the total given. For example, if you raised $50,000 from 100 donors, your average gift size is $500. You can compare this number from year to year to see if you’re receiving larger contributions over time.
Be conscious of gifts that might be considered outliers. If you received one gift that is significantly larger than usual, like a one-time gift of $30,000, it may be best to remove that from your calculation rather than have it skew your results. (The new calculation would be $20,000/99=$202.)
Also, try dividing your contributions up by size to measure the average size of a small gift, a mid-sized gift, and a major gift. You can then use this data to improve your fundraising asks from donors in each segment. For example, if the average size of a small gift one year was $23, it may be reasonable to suggest that smaller donors give $25 the following year.
5. Average Fundraising Amount
In addition to the average gift amount, you can compare your fundraisers’ success by calculating your average fundraising amount, which is approximately how much funding you received from each donor at a given fundraiser. This metric combines individual donations, peer-to-peer fundraising, merchandise sales, matching gifts, and any other sources of fundraising at an event.
As you retain participants and deepen engagement from year to year, your average fundraising amount will likely increase. However, you’ll also want to compare this metric to your growth rate. If your number of event participants is growing, but your average fundraising amount is staying the same or declining, try offering more fundraising opportunities at your events to encourage each participant to raise more.
6. Team Fundraising Success
If teams are a factor in your fundraising event, they may be an important long-term growth strategy. To analyze team fundraising success, ask yourself these questions:
- How many teams did you have?
- How many corporate teams did you have compared to those made up of family and friends?
- What is the average size of a team?
- What is the average amount raised by all teams?
- Do corporate teams or family-and-friends teams tend to raise more?
- What is your retention rate for team captains and members?
Evaluating these areas can help you improve your team engagement at future events. Team fundraising can increase involvement in events as participants invite their friends, family, and work colleagues to fundraise with them, so it’s a valuable strategy to leverage for fundraising growth.
7. Conversion Rate
Conversion rate refers to how many supporters acted upon a given call to action by donating, volunteering, or otherwise engaging with your nonprofit. Let’s say you sent an email to 100 potential supporters with a link to your event registration form. If 30 clicked the link and signed up, your email had a 30% conversion rate.
This metric can help you identify your most effective marketing strategies, but remember that marketing across multiple channels is key to many fundraisers’ success. Conversion rate will help you decide which nonprofit marketing methods to put the most effort and resources into to reach supporters effectively.
8. Return on Mission (ROM)
The first seven ways to determine fundraising success are fairly standard, numerically based metrics. But an eighth metric has become increasingly important: the return on mission (ROM). ROM encompasses both financial returns and the social impact of a fundraising initiative.
Evaluating the social impact of your event might include considering whether you:
- Increased awareness about your cause.
- Brought your community together.
- Inspired supporters to learn more or deepen their engagement.
Once you’ve analyzed the numerical data from a fundraising campaign or event, take some time to consider how it impacted your organization and community beyond the dollars raised.
Whatever data you analyze, the important thing is to take the time needed to review it carefully. If you measure and examine fundraising data strategically, it can help you identify your strongest path forward.