From high-growth corporations to small mom-and-pop shops, key performance indicators (KPIs) are quantifiable metrics that provide a pulse check on marketing efforts, delineating successes from shortcomings. KPIs for nonprofits are no different, as this data helps nonprofits identify campaign strengths and weaknesses, ultimately helping them make informed decisions on their fundraising and strategic planning.
Forward-thinking nonprofits understand that these key metrics lie at the heart of responsive fundraising. With a keen emphasis on donor recognition and appreciation, responsive fundraising leads to a natural expansion of generosity through data-activated touchpoints.
The responsive approach embodies a step-by-step framework that is completely centered around each donor and where they are in their journey with a nonprofit. Through the responsive framework, fundraisers can effectively achieve three key objectives:
- Attentively listen to their supporters
- Establish more personalized connections on a larger scale
- Suggest the optimal next steps for each donor to foster increased giving
How Do KPIs Work With Responsive Fundraising?
Because the responsive approach puts donors at the center of nonprofits’ fundraising efforts and an emphasis on personalized donor experiences, well-defined KPIs become a necessity in making data-driven decisions. These measurable metrics are like a compass, guiding organizations on what steps to take next based on real-time donor behavior. Without them, organizations would lack visibility into campaign performance, donor engagement, and overall fundraising health.
KPIs offer organizations a breadth of ways that help nonprofits become more responsive in their fundraising, including:
- Real-time visibility: Full transparency across teams on campaign performance enables nonprofits to swiftly adapt strategies based on trends in donor behavior.
- Measuring donor engagement: By setting KPIs focused on donor engagement metrics—such as click-through rates or conversion rates—organizations gain more detailed insights into how well they are connecting with their audience.
- Impact assessment: KPIs related to recurring giving and donor lifetime value help measure what percentage of donors are returning year after year.
- Informed strategic decision-making: Whether it’s adjusting communication strategies, refining campaign approaches, or optimizing donor journeys, KPIs serve as benchmarks for fundraising success.
- Adapting to donor preferences: The right KPIs help track which channels, messages, or campaigns resonate most with donors, improving organizations’ responsive approaches.
KPIs are vital to your nonprofit reporting. With all the complex data sitting in your database, tracking particular nonprofit fundraising metrics enables you to distill that information down into meaningful insights through routine reporting. Visibility and access to these reports also break down organizational silos, empowering different departments—such as fundraising, marketing, program, and finance—to collaborate effectively and work toward shared goals.
Skookum Kids benefits from standardized reporting rooted in industry best practices, coupled with the flexibility to generate customized reports, made possible with Virtuous. With shared access to the organization’s nonprofit CRM, the entire team, including staff, board members, and volunteers, can now view pertinent information whenever they need it.
6 Responsive KPIs for Nonprofits to Track in Their Next Campaign
While the success of your fundraising campaigns hinges on the KPIs you set, there is such a thing as ineffective KPI tracking. In many cases, organizations often stretch themselves thin by either focusing on too many KPIs or on ones that lack organizational value. This often limits your team’s ability to reach its goals because it dilutes attention and resources across several metrics, making it challenging to discern the most critical areas for improvement.
By honing in on a smaller, more distinct set of fundraising KPIs, you will:
- Have a better understanding of your current performance: A narrowed-down list of KPIs helps you swiftly pinpoint the core areas of your nonprofit that need to be improved upon. It’s a surefire way to know that you’re allocating resources to the right set of tasks that align with your long-term goals.
- Have clarity on the next steps: When you spread your attention across too many KPIs, it can cloud your judgment as you try to manage everything all at once. Streamlining your focus to a select number of specific metrics makes it easier to identify areas that require immediate action.
- Create efficiency and optimize resources: Simple nonprofit fundraising metrics provide a concise view of performance. This reduces the need for lengthy reports and analysis, which can lead to information overload.
Now, let’s explore six responsive KPIs that we believe hold the most value for nonprofits.
1. Donor Retention
Among the many KPIs you decide to track, donor retention should be one of the most important because this performance metric directly reflects your organization’s ability to sustain the support and loyalty of your donor base.
By monitoring donor retention rates, nonprofits gain insights into their ability to engage and satisfy donors over a period of time.
2. Average Gift Size
Piggybacking off donor retention, the average gift size directly contributes to the health and longevity of your nonprofit. This metric reflects the average donation amount your organization receives, providing a benchmark for understanding giving patterns.
By consistently tracking the average gift, nonprofits can modify their program effectiveness, whether it’s identifying opportunities for further donor engagement, personalizing messaging through the creation of additional segments, or exploring alternative communication channels.
3. Gift Revenue by Tier
Every donor is different and has their preferences, passions, and patterns of giving, so they shouldn’t be treated under the same one-size-fits-all umbrella. This is where tracking gift revenue by tier comes in handy.
This nuanced view allows nonprofits to tailor engagement strategies for each tier, optimizing efforts and fostering stronger relationships with donors at various levels of support.
4. Conversion Rate
Conversion rate measures the percentage of website visitors or potential donors who take a desired action, such as making an online donation or signing up for a newsletter.
Not only are you able to measure how well you’re acquiring donors with this metric, but you’ll also have an understanding of how effective your website is in engaging potential donors and existing ones as well.
With conversion rate in hand, your team will be able to fine-tune your online engagement strategies, knowing which website elements are sparking interest and action and which areas need to be improved upon.
5. Lapsed Donor Reactivation Rate
This nonprofit fundraising metric measures how successful you are in re-engaging donors who have previously supported your cause but haven’t taken action in a set period—usually 12 to 24 months. You know that these donors have a connection to your cause, as they showed intent to give in the past.
Tracking your lapsed donor reactivation rate prevents an increasing donor churn rate. It helps nonprofits assess the impact of their reactivation initiatives, enabling them to refine and optimize their approaches to win back valuable supporters.
6. Cost Per Dollar Raised
The cost per dollar raised takes into account the amount of money spent to generate each dollar in donations. Monitoring this metric helps organizations assess the fundraising ROI for their campaigns and activities.
This KPI is instrumental in strategic decision-making, allowing nonprofits to optimize their campaigns and allocate their resources more efficiently. By closely tracking the cost per dollar raised rate, organizations can enhance their program outcomes, ensuring that they achieve their goals while scaling their resources.
How a Responsive Nonprofit CRM Streamlines Tracking KPIs for Nonprofits
Responsive nonprofit CRM software like Virtuous provides a unified and comprehensive view of interactions, contributions, and engagement metrics that can be easily accessed across every department. This centralized database eliminates data silos, enabling teams to effortlessly track and measure KPIs related to donor retention, average gift amounts, and campaign success.
Virtuous also provides automated data collection and reporting processes, reducing the manual workload for nonprofits and creating opportunities to go toward more mission-critical tasks like personally thanking individual donors or engaging them at in-person fundraising events.
With customizable dashboards and reporting features, nonprofits can tailor their donor management platform to track the specific KPIs that align with their organizational goals.
For a 25-person team like Catholic Extension, streamlining information and tasks across teams is vital. Compared to their previous nonprofit CRM, more staff members can easily run their own queries and portfolios on Virtuous, which has been a huge advantage in team productivity.
“It’s easier to extract information for building reports from Virtuous. It’s easier to search for information and being able to move through the system very seamlessly is of high value to every user,” says Madeleinen Marchaterre, Senior Manager of Development at Catholic Extension.
Next Step: Integrating Technology and Teams
To help you become a more responsive nonprofit, we’ve adopted a maturity model framework, a step-by-step guide often used by organizations to benchmark their current level of maturity against industry best practices.
As you progress across each step, you’ll see increased team effectiveness, increased donor retention and gift size, decreased staff burnout, improved advocacy, and improved donor acquisition metrics.
To learn the five building blocks to responsive fundraising, download The Responsive Maturity Model: 5 Building Blocks to Drive Increased Generosity.