This article from Little Bean Group explains the three most important fundraising metrics: your total fundraising goal, donor retention rate, and number of meaningful donor interactions. By tracking all three, your nonprofit can understand performance, improve relationships, and achieve sustainable growth.

I see more and more of my fellow consultants pushing the message that traditional fundraising metrics are no longer relevant. I understand their point. Fundraising metrics are often developed to appease stakeholders outside of Development, including presidents, CEOs, and board members. But the right metrics are important and are indicators of a successful development program because they track progress and gift officer work

These metrics should include:

• Total fundraising goal 
• Donor retention 
• Number of meaningful donor interactions

Total fundraising goal

The total fundraising goal includes all funds that are raised through all channels and all programs. It is important to have a total target to meet. The target needs to represent a few things. First, it needs to encompass all the funds needed to ensure mission delivery. Mission delivery is how nonprofits accomplish their stated goals.

Check out my post on foundational fundraising terms if you could use a refresher.

It’s not always easy to determine how nonprofits accomplish their stated goals which is why I always encourage organizational leaders to use a zero-based budgeting approach each year and be scrupulous in how they build their programs to accomplish their goals. Over time, the way in which an organization accomplishes a goal may change, requiring changes to existing programs. These changes can have big impacts on organizational budgets and that’s why it’s important to create a new budget each year to ensure mission delivery. You should also think about how the current fundraising and economic landscape may impact mission delivery.

Once the organization is clear on mission delivery, it can develop an accurate fundraising goal. For this reason, I do not subscribe to the approach that fundraising goals should have a set percentage increase (either a predetermined amount or a range) each year. For years I worked at organizations that took a simplistic approach of setting a percentage increase without any regard to what resources were needed to ensure the organization could reach its stated goals. This approach quickly led to fundraiser burnout due to unattainable goals and a disconnect between fundraising and the work of the organization. I don’t mean to suggest that fundraising goals shouldn’t increase each year. Certainly, inflation has led to higher costs across the board that often result in higher fundraising goals. I don’t know any organization whose work costs less than it did a few years ago. Let’s just be thoughtful about fundraising goal setting and not set arbitrary goals to appease presidents, deans, CEOs, and board members.

The fundraising goal needs to be communicated with a thoughtful rationale to all development staff. Everyone needs to understand how development leadership came to the goal number to achieve buy-in. I often see that organizations don’t think about this step and quickly announce the goal without providing background information as to how the goal was developed. In doing so, leaders miss the opportunity to educate employees about the cost of mission delivery and overall fundraising strategy.

Donor retention

Donor retention is abuzz in the nonprofit sector – finally! You can read more about why donor retention matters so much here and here. When I first started my fundraising career, I worked for an organization that had a 92% donor retention rate. I just took for granted that every organization spent so much time working to retain donors year after year. I now know this is not the case.

I used to feel so good knowing that I could begin a fiscal year with 90+% of donors to return. I never took it for granted and I worked incredibly hard to meet that metric, but it enabled me to feel confident that I could meet my fundraising goals. The benefit of great donor retention is not only that donors give year after year, but also that the great stewardship work that goes into retaining donors pays multiple dividends. Those donors become investors in the organization. Their engagement goes well beyond giving money – they become ambassadors, solicitors, and board members. They help expand the organization’s efforts which helps to bring in new gifts. Over time, these donors make planned gifts as well.

Number of meaningful donor interactions

Some of my past clients have had many metrics including things like number of outreach attempts, number of proposals submitted, number of solicitations accepted and many more machinations. I like to boil all of this down to one metric that helps keep gift officers focused on fundraising – the number of meaningful donor interactions. Meaningful interaction is a broad term that encompasses the activities above as well as things like engaging in conversation with donors, following up on donor conversation, connecting a donor to an area of interest and much more. Because we know it takes time and many touchpoints to secure gifts, I like to track those interactions. The exact metrics will vary by organization. I suggest taking time to engage with gift officers and development operations staff to create a list of customized interactions that support your organization’s work. I know some think that the more detailed the metrics the better, but I am of the belief that simpler metrics keep gift officers focused externally, which is where we want their attention to be.

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