As an organization, nonprofit performance metrics are used to measure progress and impact. But with so many numbers and statistics flying around, how do you know which ones really matter? As a nonprofit leader, you need to focus on the key performance indicators (KPIs) that accurately reflect your organization's health and ability to fulfill its mission. If you're not sure where to start, here are 5 essential KPIs your nonprofit must measure. These fundraising metrics cut through the noise and provide an honest assessment of how well you're engaging donors and raising money to make a difference. Stop guessing and start measuring—your nonprofit's impact depends on it.
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Define Key Performance Indicators (KPIs) for Nonprofits Performance Metrics
As a nonprofit, measuring your impact is critical. The best way to do this is by defining key performance indicators or KPIs. KPIs are metrics that help determine how well your organization is achieving key business objectives. For nonprofits, this means metrics like:
How many donors continue to give year over year? A high retention rate (80% or more) shows you're building lasting relationships and providing value. Track both the number and percentage of retained donors.
How many new donors do you gain each month or year? While retaining current donors is key, acquiring new donors is also important for growth. Aim for steady increases in new donors over time.
Are donation amounts increasing? Both the average annual gift and total annual donations are important. Rising numbers here demonstrate you're resonating more with donors and communities you serve.
How are your programs and services impacting those you serve? Track metrics like number of people served, lives improved, and communities strengthened. Share stories and statistics to show donors the impact of their gifts.
How much of your budget goes directly to programs and services? A high percentage (80% or more) shows you're using resources wisely. Track program expenses versus administrative and fundraising costs.
Defining and monitoring the right KPIs helps ensure your nonprofit's time, money and efforts are being used strategically and making a real difference. By understanding what's working, what's not and where you can improve, you'll be empowered to make better decisions and have greater impact. The beneficiaries will be the people and communities you serve.
Track Donor Retention Rates
To keep donors coming back and ensure the long-term sustainability of your nonprofit, you need to focus on donor retention. One of the best ways to do this is by tracking your donor retention rates.
What is donor retention rate?
Your donor retention rate refers to the percentage of donors who make a repeat donation within a given time period, such as 1 year. The higher your retention rate, the more loyal your donor base is.
As a nonprofit, your goal should be to retain at least 60-70% of your donors year over year. Anything below 50% means you have some work to do! Some tips to boost your retention:
-Thank your donors promptly and personally. Send a handwritten thank you card or give them a call to express your gratitude.
-Update donors regularly on the impact of their gifts. Share stories and statistics about the lives they're changing. This helps donors feel connected to your mission and want to continue giving.
-Provide opportunities for increased involvement. For example, invite donors to volunteer at an event or serve on a committee. The more involved donors are, the more invested they become.
-Ask for feedback and listen. Survey donors or set up focus groups to find out what they like about your organization and how you can improve. Then implement their suggestions!
-Offer donor appreciation events. Host special events, tours or receptions just for donors to make them feel appreciated. Face-to-face interaction is key.
By focusing on the little things that make donors feel valued and strengthening your connection with them, you'll build lifelong partnerships and ensure a steady stream of revenue for years to come. And that's really what it's all about, isn't it?
Measure Donor Acquisition Cost
Measuring your donor acquisition cost (DAC) is key to understanding how efficient your fundraising efforts are. This metric calculates how much it costs your nonprofit to gain each new donor.
To calculate your DAC, take the total cost of all your fundraising efforts over a period of time and divide it by the number of new donors gained during that same time period. For example, if you spent $10,000 on fundraising over six months and gained 100 new donors, your DAC would be $100 ($10,000 / 100 new donors).
A lower DAC is better since it means gaining new donors costs less. If your DAC seems high, look for ways to improve. Some options:
•Focus on low-cost fundraising methods like social media, email, and word-of-mouth. These can be very effective for small nonprofits.
•Review the costs of any paid fundraising efforts like direct mail or telemarketing. See if you can reduce printing, postage or staffing costs. Even small savings can help lower your DAC.
•Analyze the results of your fundraising campaigns to determine which channels and messages resonate most with your target donors. Focus your resources on the highest-performing areas.
•Ensure you have a multi-channel approach to keep costs low while still reaching many potential donors. Relying too heavily on any single channel can drive up your DAC.
•Consider collaborating with similar nonprofits on joint fundraising campaigns. Sharing resources and costs is an easy way for small organizations to gain donors more efficiently.
•Provide value to new donors right away to keep them engaged. The quicker you can move new donors up the loyalty ladder to repeat givers, the faster you'll recoup your acquisition costs and lower your DAC.
Keeping a close eye on your donor acquisition costs and making ongoing improvements to your fundraising strategy will help ensure your nonprofit's resources are being used as efficiently as possible. An optimized DAC means more funding available for your mission and programs.
Analyze Your Donor Lifetime Value
One of the most important metrics for any nonprofit to analyze is your donor lifetime value (LTV). This helps determine how much revenue you can expect from a donor over the lifetime of their relationship with your organization.
Calculate Your Donor LTV
To calculate your donor LTV, take the average annual donation amount for each donor level and multiply it by the average number of years that donors stay engaged at that level. For example:
- Annual donors: $50 x 3 years = $150 LTV
- Monthly donors: $20 x 5 years = $100 LTV
- Major donors: $5,000 x 7 years = $35,000 LTV
This gives you a benchmark to determine how much you should spend to acquire new donors and retain current ones. As a general rule of thumb, you want to spend less than 50% of a donor’s LTV on fundraising for that donor.
Increase Your Donor LTV
There are a few ways to boost your donor LTV:
- Focus on donor retention. It’s easier and more cost effective to keep current donors than get new ones. Send updates, offer engagement opportunities and say thank you.
- Provide donor education. Help donors better understand your mission and programs. The more they know, the more connected they’ll feel.
- Consider a monthly giving program. Monthly donors tend to give more over their lifetime and remain engaged longer. Make it easy for donors to sign up for monthly gifts.
-Host fundraising events. Special events are a great way for donors to feel more connected to your cause. And the more connected they feel, the more they’ll likely give over time.
- Offer additional opportunities for impact. Some donors may be interested in volunteering, advocacy or other ways to support you beyond just donating money. Providing these opportunities can lead to a higher LTV.
- Build personal relationships. For your major donors especially, work to build genuine relationships based on trust and understanding. Meet with them, share updates and express gratitude for their support. Personal connections inspire lasting loyalty.
By focusing on these areas, you’ll see your donor LTV start to rise over the coming years. And the higher your donor LTV, the more financial stability and security your nonprofit will have.
Monitor Social Media Engagement
Social media is one of the most powerful tools nonprofits have to spread your mission, engage donors, and raise funds. Monitoring key metrics on social platforms helps ensure your content and campaigns are effective. Here are 5 key performance indicators (KPIs) your nonprofit should track on social media:
1. Follower Growth
A steady increase in followers shows your social media strategy is working. Aim for 1-5% growth in followers each month. Post content that inspires people to follow you, like stories of impact, calls-to-action, and behind-the-scenes photos.
2. Engagement Rate
Your engagement rate indicates how interested your audience is in your content. Measure reactions, comments, shares, reposts and link clicks. A good target is 3-5% engagement for Facebook and 1-3% for Twitter. Engaging content includes questions, polls, photos, and videos. Respond to all comments and tag other accounts to increase engagement.
3. Click-Through Rate
The click-through rate (CTR) shows how many people click links in your posts. Aim for a CTR of at least 2% overall. Include eye-catching images, optimized link titles and placement at the beginning or end of posts. Track CTRs for each link and campaign to see what resonates most with your audience.
4. Traffic Sources
See which social networks and posts drive the most traffic to your website. Then focus efforts on the top referral sources. Use UTM codes or a link tracker to monitor traffic from social. Create a landing page for each campaign and track conversions.
5. Mentions and Hashtags
Monitor how often your nonprofit is mentioned and the reach of your branded hashtags. Mentions indicate your brand awareness and sentiment. Hashtags extend the reach of your posts and events. Engage with those who mention you and repost content using your hashtags. Create unique hashtags for each campaign and promote them across social channels.
For nonprofits, social media metrics highlight what's working and how to improve to better achieve your mission. Tracking KPIs leads to data-driven decisions, optimized content, and bigger impacts. And that's what it's all about.
Evaluate Website Traffic and Conversions
Evaluating your website’s traffic and conversion rates is key to understanding how well your nonprofit’s online fundraising efforts are performing. Some metrics to track include:
The number of individual people who visit your website. Aim for steady growth over time. High traffic numbers show your site is attracting attention, but look at other metrics to determine engagement.
The percentage of visitors who leave your site after viewing only one page. A high bounce rate, like over 70%, means people aren’t finding what they need. Make your key messages and calls-to-action more prominent to capture attention.
The total number of pages viewed on your site. More page views typically mean visitors are interacting with and exploring your content. However, a single visitor can generate multiple page views, so analyze this metric along with others.
The percentage of visitors who take a desired action, like donating or signing up for your email list. Even a conversion rate of just 2-3% is good for nonprofits. Make donating and action buttons highly visible and easy to find. Include compelling calls-to-action and photos to inspire people to get involved.
Average Time on Site
The average amount of time visitors spend on your website. Around 2 to 3 minutes is typical for nonprofits. Longer durations signal your content is resonating with readers. Short visits could indicate your message isn’t connecting or your site is hard to navigate.
Reviewing these metrics regularly and making changes to boost traffic, engage visitors, and increase conversions is essential. Small tweaks to your website content and design can have a big impact on your nonprofit’s fundraising success. Provide value to your visitors and make it easy for them to take action, and you’ll see your numbers start to rise.
- Here's what we recommend for nonprofit finance!
- Our recommendations to improve your nonprofit's technology!
- Click here for the best tools for nonprofits!
Assess Email Marketing Performance
To keep your nonprofit's email marketing efforts on track, regularly assess key performance indicators or KPIs. Some of the most important metrics to monitor include:
Aim for at least 20-30% of your contacts opening your emails. Anything below 15% means your subject lines and content likely need improvement. Check which emails and subject lines had the highest open rates and try to replicate that success.
The percentage of people who clicked a link in your email is one sign of how engaging your content is. Nonprofits should target a minimum 2-3% click-through rate. Look at which links got the most clicks and consider promoting those types of content or calls-to-action in future emails.
If 10-15% or more of your emails are bouncing, your contact list likely needs cleaning up. Bounces often happen due to invalid or outdated email addresses or spam filters blocking your messages. Do routine list maintenance by removing hard and soft bounces to keep your contact database up to date.
While some unsubscribes are inevitable, a high unsubscribe rate, over 1-2% per campaign, could indicate issues with your messaging or content that are turning people off. Review the types of emails that led to the most unsubscribes and make adjustments to better match your audience's interests going forward.
Donation conversion rates
For fundraising emails, monitor how many people make a donation after clicking through. Aim for at least 3-5% of clicks leading to donations. Subject lines with clear calls-to-action around donating often see higher conversion rates. Test different messages to find what most compels your subscribers to give.
Constantly tracking and optimizing these key metrics will help ensure your email marketing efforts are as impactful as possible. Make data-driven decisions to improve open, click-through and conversion rates over time. With regular assessment and refinement, you'll build an email program that effectively engages your subscribers and supports your nonprofit's mission.
Calculate Return on Investment for Fundraising Campaigns
Calculating your return on investment (ROI) for fundraising campaigns is one of the most important key performance indicators (KPIs) your nonprofit should measure. Understanding your ROI helps determine if your fundraising efforts are cost-effective and worth continuing or expanding in the future.
To calculate your ROI, you'll need to track two metrics:
- Total dollars raised from the campaign (income)
- Total expenses for implementing and running the campaign (costs)
Once you have these numbers, use this simple formula:
ROI = (Income - Costs) / Costs
For example, if your fundraising gala brought in $100,000 in donations but cost $20,000 to organize, your ROI would be:
(100,000 - 20,000) / 20,000 = 4
An ROI of 4 is excellent and means for every $1 you spent, you raised $4. As a general rule of thumb, an ROI of 3 or higher is a successful campaign worth repeating. If your ROI is under 3, you may need to re-evaluate your fundraising strategies to achieve a better return on your investment.
Some other tips for maximizing your ROI and nonprofit performance metrics:
•Focus on your fundraising costs. The less you spend to raise money, the higher your ROI will be. Look for ways to reduce venue fees, catering costs, and other variable expenses.
•Target your most engaged donors. Campaigns aimed at your loyal, long-term donors who give generously every year typically yield a higher ROI. Their gifts require less investment to solicit.
•Diversify your fundraising channels. Don't rely only on special events. Add lower-cost channels like email appeals, social media fundraisers, and monthly giving programs. This multi-channel approach can help you raise more money for less.
•Track ROI over time. Review your ROI for each campaign and look for overall trends from year to year. Make improvements and adjustments to boost your returns over the long run. Even small changes can make a big difference in your bottom line.
Calculating and monitoring your ROI is key to maximizing your fundraising success and impact. While it does require an investment of time and resources, the payoff of higher returns and more dollars for your mission is well worth the effort. Focus on controlling costs, targeting your best donors, using multiple channels, and improving over time. Your nonprofit's effectiveness and sustainability depend on it.
Frequently Asked Questions About Nonprofit KPIs
Nonprofits often have many questions about how to best track and optimize their key performance indicators (KPIs). Here are some of the most frequently asked questions and answers about nonprofit KPIs:
What are the most important KPIs for nonprofits to measure?
The top KPIs nonprofits should focus on are:
- Donor retention rate: The percentage of donors who give again. Aim for at least 50-60%.
- Average gift size: The average amount donors contribute. Track this over time to see if it's increasing.
- Cost to raise a dollar: How much you spend to raise $1 in donations. Lower is better, under $0.30 is a good target.
- Website traffic: How many people visit your website. More traffic means more potential donors and volunteers.
- Social media engagement: Likes, shares, comments on social platforms. Shows how well your message is resonating.
How often should we review our KPIs?
You should review your core KPIs at least quarterly, if not monthly. Some KPIs like website traffic and social media stats should be checked weekly or even daily. Reviewing regularly will allow you to spot any issues early and make adjustments to get your metrics back on track.
What tools can we use to track KPIs?
There are many tools nonprofits can use to monitor KPIs:
- Google Analytics for website traffic and social media stats.
- Your CRM database to analyze donor retention and gift size.
- Tools like HubSpot or ActiveCampaign to track email marketing metrics.
- Social media management platforms to analyze followers, likes, and engagement.
- Survey tools like SurveyMonkey or Typeform to get feedback from donors and volunteers.
How can we improve our KPIs?
Some ways to boost your KPIs include:
- Run a donor retention campaign to encourage repeat giving.
- Increase your social media activity and paid advertising to drive more website traffic.
- Optimize your online donation forms and email newsletters to increase average gift size.
- Renegotiate with vendors and reorganize staff to lower your cost per dollar raised.
- Send out surveys to better understand your donors and make improvements.
- Provide volunteers and board members with KPI reports so they can also help make suggestions for improvement.
Tracking and optimizing your KPIs is key to running an effective nonprofit. Review them regularly, make improvements over time, and get input from stakeholders to help your organization thrive. ForGranted Media is here to provide more resources and guidance on improving your nonprofit's KPIs.
So there you have it, five critical nonprofit performance metrics you need to start measuring and tracking if you want to take your fundraising to the next level. Don’t let all your hard work go to waste by not knowing whether you’re achieving your goals or not. Get on top of these KPIs and use the data to make smarter decisions, create more targeted campaigns, and ultimately bring in more donations. Knowledge is power, especially in the nonprofit world. Stop guessing and start tracking—your donors and organization will thank you for it. Now get out there, start crunching those numbers, and good luck growing your fundraising!
About ForGranted: ForGranted Media specializes in all facets of emerging technological advancements, finance, fundraising and marketing for your nonprofit. Our sole mission is to provide with resources to become a stronger organization!