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Capital Campaigns, Development, Donor Relations, Fundraising, Uncategorized

Using Metrics to Boost Your Fundraising

Are you looking at a map or the rearview mirror?

As a fellow fundraiser, let me begin by giving you my congratulations on completing an unprecedented fundraising year. I hope you can spend some time in the next few weeks to take a break and carry out some much-deserved self-care. Be sure to take time to appreciate your team members who contributed to your organization’s fundraising success.

Although the end of a fiscal year can bring a sense of relief, the start of a new year can understandably cause anxiety. The beginning of the fundraising year often leads to fundraisers asking themselves some age-old questions: What initiatives are working? Should we eliminate the golf outing? How can I measure and track our overall fundraising program?

Sadly, often before fundraisers can start to address these questions, they are quickly distracted by the next fundraising initiative. So, most nonprofit fundraising plans aren’t supported by data, but rather stem from inertia and intuition. Thankfully, 2023 provides an opportunity to determine how to improve our fundraising efforts.

So, how successful was your organization’s fundraising last year?
You might answer this question with metrics like the amount raised, the number of new donors or the number of donations. While these basic figures can be informative from a year-over-year trend perspective, they do a poor job answering questions like: Why did these metrics change? What are the weaknesses in my fundraising plan? Where should we focus our efforts this new fundraising year?

I consider those basic metrics to be “rearview mirror” metrics as they only tell you what has happened in the past. “Rearview mirror” metrics don’t point your organization to where you would like to head. What you really need are metrics that provide you with a plan of action, or a map, to help bolster your fundraising efforts.

Map Metrics
Although the topic of fundraising metrics isn’t very sexy, the payoff from a data-based fundraising plan will be. Fifteen years ago, I worked for a healthcare consulting firm with the motto: “you can’t move it if you don’t measure it.” I believe the same is true with fundraising. You need a detailed analysis to make an actionable plan to improve your fundraising efforts. Luckily, you can achieve a thorough analysis with these 10 key data points from either your CRM or accounting software.

10 Key Data Points
To start, you will need to compile the following data points. For simplicity’s sake, assume all data points are for 2022 unless otherwise noted.

  • Actual Fundraising Expense (include your best guess of the salary costs associated with employee’s time spent fundraising)
  • Organizational Expenses
  • Number of Contributions Received
  • Number of Contributions Received
  • 2021 Total Number of Donors
  • 2022 Total Number of Donors
  • The Number of New Donors This Year in 2022 (i.e. gave in 2022, but not in 2021)
  • 2022 Number of Retained Donors (i.e. gave in both 2022 & 2021)
  • The Number of Lapsed Donors in 2022 (i.e. did not give in 2022 but did give in 2021)
  • 2022 Total Amount of Contributions from Top 5 Donors

Obviously, to determine trends over time, you will need to obtain this information for multiple years. However, much can be learned from analyzing even a single year and comparing yourself to industry benchmarks.

Map Worthy Metrics
Because they are easy to understand, simple to calculate, and they efficiently measure the key drivers of a productive fundraising plan, I consider these metrics to be “map worthy”. Many of these can be applied to separate fundraising initiatives. But this article will focus primarily on how they can be used to assess your overall fundraising program. Also, I’ve provided several great tools toward the end of this article to help you with this process.

Donor Retention Rate
2022 Number of Retained Donors/2021 Total Number of Donors

Without question, your donor retention rate is one of the most important fundraising metrics. It’s possible to increase your giving in years where you lose more donors than you retain. But, it’s nearly impossible for a nonprofit to survive prolonged episodes of poor donor retention.

The closer your retention rate is to 100%, the better.  Currently, the average nonprofit has a retention rate of about ~45% which means that nonprofits are losing more donors than they can retain.

So why is donor retention such a big deal? According to preeminent fundraising scholar, Dr. Adrian Sargeant, a 10% improvement in donor retention rate can double the lifetime value of donors in your database. If you could only track one metric annually to monitor your fundraising, it should be donor retention.

Donor Attrition Rate
2022 Number of Lapsed Donors/2021 Total Number of Donors

In addition to using this formula, you can also calculate the donor attrition rate by subtracting the donor retention rate from 1. So, for example, if your retention rate last year was 55%, your attrition rate would be 45%. The closer your attrition rate is to 0%, the better.

Churn
2022 New Donors – 2022 Lapsed Donors

Churn is a great way to assess the net result of your donor retention and donor recruitment efforts. It helps you quickly identify whether your organization is experiencing a net inflow or outflow of donors. Often new donor counts and retention are measured separately and can feel disparate from each other. Churn eliminates any noise in the data, telling you if your active donor counts are heading in the right direction.

Donation Frequency
Number of 2022 donations / Number of 2022 Donors

Donor frequency helps distill how efficiently you’re increasing the number of donations per donor. The higher your frequency, the better. A large onslaught of single gifts would lower your frequency (a great problem for any nonprofit). But, a higher donation frequency means that your average donor is giving more frequently. For example, transitioning a large group of donors from an annual gift to monthly donations would drastically improve your donation frequency. There are two major reasons why that matters. One, the higher your frequency, the more likely your donations are evenly spread throughout the calendar year. Second, and perhaps more importantly, research shows that, on average, donors who give more than once a year give a greater amount each year, are more loyal to the organization, have higher retention rates, and as result, significantly improve your organization’s average Donor Lifetime Value.

Donor Lifetime Value (DLV)
Average Annual Gift / Attrition Rate

Perhaps self-explanatory, DLV shows the lifetime value of your average donor based on your Average Annual Gift. The Average Annual Gift is simply your Total amount of Contributions divided by the total number of donations. While there are multiple ways that DLV is calculated, most require you to calculate the average amount of time your donor is active with your organization (aka Donor Lifespan). As someone who has struggled through the process of calculating the average donor’s lifespan, I would recommend the above formula instead. In addition to being incredibly easy to calculate, I find it to be a perfectly adequate way to assess trends over time. Your goal is to always be increasing your DLV as that means you are retaining more donors and/or getting more donations per donor.

Lost Potential
Donor Lifetime Value x 2022 Number of Lapsed Donors

This number should be the core motivation for you to work on donor retention. If your DLV is $1000 and you lost 100 donors last year, the lifetime value of those donors would be $100,000. I
f you are looking for a bit of encouragement after calculating Lost Potential, I recommend calculating your Retained Value (DLV x # of your retained donors). Retained Value gives you a clear sense of the “true worth” of the active donors in your database.

Bonus Tip
As the old saying goes, “You’re likely to raise more money from existing donors than by acquiring new donors.” If you can determine the attrition rate of the average first-time donor vs. your retained donors, you will likely affirm the merits of this saying. Such data can be helpful to share with board members or bosses that are pushing for “more new donors” when you would rather prioritize untapped opportunities within your existing donor group.

Return on Investment (ROI)
(Total contributions – Fundraising Expenses)/ Fundraising Expenses

Cost to Raise a Dollar (CRD)
Fundraising Expenses / (Total contributions – Fundraising Expenses)

ROI and CRD help measure how efficiently your investments (aka fundraising expenses) lead to funds raised.  While ROI and CRD can be calculated to assess your overall fundraising program, these same metrics are excellent at assessing individual fundraising initiatives and trends over time. Most nonprofits assess their initiatives by net income (initiative revenue – initiative expenses). However, they may be surprised to learn that once staff time is included in the expenses, many of their initiatives have a negative ROI. Your goal with ROI is to be positive and the higher the number, the better.

CRD is a slightly more accessible way to communicate the success of your fundraising efforts and is simply the inverse of the ROI calculation. Basically, CRD is the amount you have to spend to raise $1. Your primary CRD goal is to be below $1. The lower your CRD, the better. Conversely, should your cost go above $1, you are losing money.

Dependency Quotient (DQ)
Total Amount of Contributions from Top 5 Donors/ Total Organizational Expenses

It is always good for organizations to assess their overall dependency on their top donors. As you can see, the DQ determines the share of your overall organizational expenses that rely on your top 5 donors’ donations. Perhaps obvious, your goal is to decrease your dependency quotient over time as that means that you are diversifying your contribution sources.

Dependency Quotient vs. Cost to Raise a Dollar
The interplay between these two metrics can provide a lot of insight as to where you should focus your efforts in the year ahead. If you are doing things correctly, you should be moving from High to Low in both DQ & CRD.

As someone who is always happy to borrow great ideas, the content to create the following table is from a  great Bloomerang article: 3 Metrics to Help Measure Fundraising Effectiveness. The article also provides helpful real-life examples of how organizations can move in the right direction.

  High Cost to Raise a Dollar Low Cost to Raise a Dollar
High Dependency Quotient You are investing heavily in many different strategies but are still highly dependent on just a few sources of funding. This is common for organizations who rely on just one big event a year for the majority of their funds. You are likely receiving big donations from a handful of donors but are at risk if you lose just one donor. Do you have a safety net that would continue to fund your mission?
Low Dependency Quotient You are likely investing heavily in fundraising programs that provide a diverse group of funders, but you’re spending a lot to make that happen. Are you missing opportunities to go after major gifts? Keep up the good work! This is the ideal scenario.

Is your head spinning yet?
While this all may seem overwhelming, much of the math above could be accomplished by the average third grader. The only thing keeping you from obtaining a clearer picture of your organization’s fundraising is a bit of time and some elbow grease. Luckily, I am happy to report that there are several resources available to help calculate the metrics you need to guide your fundraising plan:

Free Resources from The Timothy Group
We have created a simple, yet effective spreadsheet that calculates all the above metrics by simply providing the top 10 data points above. The spreadsheet also produces 13 graphs & charts to provide visuals for your organization’s past fundraising trends which are great for copying and pasting into your next board fundraising report. Also, for those of you that are interested in assessing your fundraising initiatives at a more granular level, we’ve added a bonus Initiative ROI Cheat Sheet that will quickly show you where your organization is getting its biggest bang for the buck, and perhaps more importantly, which initiatives should be discontinued. If you are interested in obtaining the spreadsheet, download it free here:


Metric Tools


Fundraising Metrics Slides


Your current CRM
While not every CRM has amazing reporting functionality, most do calculate many of the above metrics. I suggest that you try diving into the CRM’s dashboards or searching one of the above metrics or data points in their help/resources section. 

FundraisingReportCard.com (FRC)

By simply importing your organization’s gift dates, gift amounts, and profile ID (most systems have an anonymized alphanumeric ID available), FRC will not only calculate many of the metrics above, but it also quickly produces beautiful graphs, trend lines, and segmentations that make analysis a snap. If you are lucky enough to be using Kindful or Little Green Light as your CRM, they have a very simple integration that will do all the heavy lifting for you. Even if you don’t use their dashboards, be sure to check out their benchmarks page as it provides nonprofit sector-specific benchmarks that instantly help you see how you are doing compared to your sector. 

Fundraising Effectiveness Project (FEP)

The Association for Fundraising Professionals has created a set of free downloadable spreadsheets that will help you calculate many of the top metrics. 

You can do this! (and we’re here to help)

With no obligation, I would be happy to provide 30 minutes of my time to help you through this process. Whether it be helping you obtain your key data points, using one of the above tools, or analyzing your results, The Timothy Group is here to help. We have worked with many nonprofits to assess their programs and I promise it will be worth the effort. Let’s leave intuition and inertia in the review mirror and make 2023 the year you implement a data-driven fundraising plan!

Note: The above article is intended to provide quality actionable content for the reader. Jonathan Helder and the Timothy Group do not receive any compensation for the referral links to the article and/or fundraising tools listed above. 

About the Author: Jonathan Helder, CFRE, ECRF, Consultant

With over a decade of proven fundraising experience and a love for data, Jonathan is blessed to serve nonprofits and help bolster their impact on the community. Jon enjoys helping ministries implement data-based strategies and tools to improve fundraising and organizational effectiveness. Jonathan has written articles as well as presented to local and national organizations including the Association of Fundraising Professionals (West Michigan)Do More GoodNonprofit Hub and the Lakeshore Nonprofit Alliance.

 

 

Uncategorized

5 Days: Howie & Don

There are people in your life in any field of work that help teach, train, disciple, and mentor you. In April, I lost two of my long-time mentors five days apart: Dr. Howard (Howie) Nourse and Donald Distelberg. Scripture teaches that “iron sharpens iron.”  Howie and Don sharpened me, sometimes in a friendly way, and a few times behind closed doors in some “Big Boy Chats.” They challenged me to be a better fund and management consultant, husband, father, and a more committed follower of Christ.

Howie was an NCAA champ as the 6’ 9” center for Ohio State. Don cut his fundraising teeth at Calvin University in the advancement office and was a mile-wide and 50 miles deep with experience. Don was still working part time on TTG projects and was one of the most knowledgeable stewardship officers in the world.

Howie graduated to glory on April 18, 2021. He was 82 years old. I had a 20-minute phone call with Don on Thursday, April 22nd. He died on Friday, April 23rd. He was 75 years old. Shock would be an understatement! I hope I am ready to pass along the wisdom, knowledge, and know-how they shared with me over 30 years at TTG. I know I am ready! Howie and Don, rest in peace. You fought the good fight, you finished the course, and now you are enjoying eternity with your Savior.

I miss you both, Pat.


Donald Distelberg

Dr. Howard (Howie) Nourse
Uncategorized

Donald G. Distelberg

Distelberg, Donald G. Grand Rapids, Michigan Donald G. Distelberg, 75, of Grand Rapids was welcomed into his Heavenly home on April 23, 2021. Left to cherish his memory are his wife Natalie of 54 years; his children Karen, Jeff (LeAnn), and Brian (Michelle); his grandchildren Jakob, Taylor, Braeden, Alina, Gideon, Parker, and Elijah; his sister Barbara Stakely, and brother-in-law John (Ruth) Idema. He graduated from and later held a position at Calvin University. He then was a partner at The Timothy Group, assisting church and parachurch organizations. Don led a God centered life and placed family as a priority. A Celebration of Don’s Life will be held at Calvary Church’s Chapel on Tuesday, June 8, 2021 (707 E Beltline Ave NE, 49525). Visitation will be held at 2:00 pm followed by a memorial service at 3:00 pm. Memorial contributions may be made to: Calvary Church-Widow/Widowers Ministry or Calvin University.

Uncategorized

Howard (Howie) Nourse Tribute

On April 18, 2021, Howard (Howie) F. Nourse, completed his work here on earth and went to join his parents (Howard & Katherine Nourse) and eldest grandson (Fred Greene) in heaven. Howie was a loving husband and father, devoted brother, uncle, grandpa, coach and friend. He loved the Lord, spending a lifetime serving others, sharing life and influencing the lives of many as a mentor and coach. After meeting his future wife and graduating from Springfield High School, Springfield, OH, he attended The Ohio State University on an academic/athletic scholarship, where he earned his Bachelor’s degree in Higher Education, high-jumped as a member of the track team and was a member of the 1960 NCAA men’s basketball championship team. He continued his education with a Master’s degree from St. Francis College, Ft. Wayne, IN. He went on to coach basketball and direct athletics at John Wesley College, Owosso, MI and Gordon College, Wenham, MA. After retiring from coaching, Howie returned to Ohio State and earned his Ph.D. He then changed careers serving as the Vice President for Institutional Advancement at Milligan College, Milligan College, TN for several years before joining a great friend as a partner with The Timothy Group, Grand Rapids, MI, working with church and parachurch organizations. Upon retiring to Jonesborough, TN, Howie enjoyed golfing, working around the house and yard, attending local cultural events, and worshipping with family and friends at Grace Fellowship Church.

He proudly served as a Board member at Crossroads School, Longmont, CO, a school for at-risk middle and high school students which was co-founded by his daughter Connie.

Left to cherish his memory are his wife of 62 years, Judy Nourse, Jonesborough, TN; daughter and son-in-law, Cathy and Michael Bevilacqua, Boulder, CO; daughter, Connie Nourse, Longmont, CO; son and daughter-in-law Rob and Karen Nourse, Johnson City, TN; grandchildren Mary Bevilacqua, Emilia Bevilacqua, and Seth Nourse; brother and sister-in-law Joe and Marlene Nourse, Springfield, OH; sister and brother-in-law, Barbara and Wendell Johns, Wichita, KS; sister and brother-in-law, Mary and Chuck Wiggins, Ft. Wayne, IN as well as numerous nieces, nephews, grand-nieces, grand-nephews and many dear friends.

A celebration of Howie’s life will be held at a future date, yet to be determined.

In lieu of flowers, the family requests donations to Crossroads School, Longmont, CO at www.crossroadslongmont.org

Uncategorized

Influence Millennial Giving Through Social Media

Many of us use social media for our organizations, our own interests and to see the interests of others. Millennials are certainly no exception. According to Pew Research, 3 out of every 4 millennials engage in some social media platform regularly. That is a lot of millennials! However, at times it can feel like throwing an arrow in the wind when posting to a social media platform. Questions regularly get asked like: What should we say? Should we use graphics? A video? How long should our post be? Here are a few trends we see on social media to help you engage specifically with Millennials around your organization.

Peer recommendations carry a lot of weight. A recent study by Hubspot found that 71% of people are more likely to make a purchase online if the product or service comes recommended by others. This principle rings true for your organization! A study by the Millennial Impact Report discovered nearly 75% of respondents said they would tell Facebook friends about great nonprofit events, 68% said they would tell friends impressive statistics about a cause or issue, and 65% said they would promote a nonprofit’s great story or accomplishment. In addition, 61% said they would use Facebook to alert friends to volunteering opportunities and needs (2012).  This is great news for you. Leverage those who love your organization to share about it through Facebook, Twitter, Instagram and even LinkedIN.

Stories have significant influence on organizational equity. We all love a good story. That’s why we watch Disney movies as adults but tell others we are just watching them for the kids. Sure… But in reality (and more importantly on social media platforms) stories are powerful, engaging and can earn your company great amounts of equity and trust from Millennials. Read these two quotes from the Millennial Impact Report

“I would donate if I knew more about the school, the students, or [saw] a section that spotlighted what a particular scholarship recipient is doing […] on campus to stay active and support the campus.” (2013)

“I have an emotional connection to the nonprofit and want to see it succeed.” (2013)

Stories build bridges leading to real dollars coming into your organization to help fulfill your mission. Social media platforms are simply another opportunity to share your story in a compelling way.

Sincere engagement – not advertising – is often the drive behind actual donation dollars. This one is the easiest one, Millennials do not want to be sold something!  They want to be connected with and to be included. The principle here is keep posting stories, but be sure to read comments, respond to ‘shares’ and ‘retweets’ and be engaged with people/users as they engage with your organization.

 

Happy Posting!

Capital Campaigns, Development, Donor Relations, Fundraising, Uncategorized

Shari Flaming Center For The Arts Dedication

On Friday, December 9th, Tabor College of Hillsboro, Kansas dedicated their $13 million Shari Flaming Center for the Arts. Through the determination and enthusiasm of Dr. Jules Glanzer; Ron Braun, VP for Advancement; Trustees, the Advancement team and the entire Tabor family, Tabor completed this facility debt free and exceeded their $18 million Signature Campaign with a total of $18,683,630. Since 2,000, Tabor has raised just under $60 million for capital, annual and endowment funds!

The Timothy Group has partnered with Tabor College since 2008. Pat McLaughlin, President and Founder of The Timothy Group spoke at the dedication and then was honored with a surprise award for his service to Tabor. The Tabor College/Timothy Group team has been a great partnership. Dr. Glanzer shared some kind words about working together, “Everything I know about fundraising, I learned from The Timothy Group. Pat went on donor visits with us for this campaign. One important thing Pat taught us was to listen to your donors. If you listen to them, they will tell you when and how much. I would attribute our fundraising success solely to the help of Pat and The Timothy Group. When we did what they asked us to do, it worked.”

The award presented to Pat is inscribed, “The Timothy Group – In grateful recognition for your service to Tabor College – Shari Flaming Center for The Arts – Dedicated 12/9/17.”

It’s appropriate that the first performing arts event in the Shari Flaming Center for the Arts was, Handel’s “Messiah.” Hallelujah for God’s provision of this wonderful new facility through the unparalleled generosity of the Tabor College constituency!

 

 

 

Patrick McLaughlin is President and Founder of The Timothy Group. Pat has personally assisted more than 1,654 Christian organizations. In 27 years of service, The Timothy Group has raised over $2.2 billion.

 

 

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