The Complete Guide to Nonprofit KPIs

With the constant deluge of change combined with the increasing needs of the communities we serve, metrics can act as a north star for nonprofit strategy and bring some calm to the chaos around us. They help your organization be more agile, uncover powerful currents of success, and see choppy waters to avoid stormy waters. Hope you like the seafaring theme thus far, it could be replaced with any journey analogy though.

With limited resources, measurement is foundational to benchmarking different options, helping you prove and improve your mission. Nothing speaks louder than objective data in making decisions. Measurement is also the basis for Return on Investment (ROI), which you need to justify the resources you need to run your nonprofit. 

But will good data and Key Performance Indicators (KPIs) alone steer your ship/organization?

Not really – your staff and stakeholders do – but metrics are your map. Metrics represent your community and the people you serve, your staff, and how they work towards your mission’s impact. No one likes being reduced to a number, so every time you’re looking at a graph, let the right side of your brain weigh in too. 

Here are some examples of what metrics represent:

• Common definitions, democratized data, and universal access create a culture of performance measurement, trust, transparency, and accountability – data is a language.
• Supporter metrics or a simple survey can help create empathy for your team to move to a more supporter-centric mindset – data reflects your community.
• Team metrics can unlock insight into how your fundraisers are working (hopefully happily and productively) from home – data is your staff.
• Metrics can be shared in conversations/chats to innovate or to kick off a workflow that used to take you hours to complete – data works for and with you.

This article covers performance measurement in Nonprofit Fundraising & Marketing, with a goal to help nonprofits fund solutions to the ever-changing needs of our communities. 

You might ask, why not write about impact measurement? We believe in the power of programs and impact data and have many other resources on that topic. There is already a history of “proof” in program outcomes due to its funder requirements and its operational nature, however we have heard from marketers and fundraisers they are being asked to prove their work.

Revenue-generating teams can also be treated differently if they use these metrics to grow. If you invest in overhead or top-line growth, you can be chastised as “not a not for profit”. However, fundraising is the lifeblood of the programs that drive your impact, and in a recession these funds are mission-critical.

What are Nonprofit KPIs?

In the sea of data, there’s an unlimited number of metrics to track. Be ruthless in the prioritization of Key Performance Indicators. There shouldn’t be more than your organization can digest.

To help you, we’ve created a simple way for nonprofits using any CRM or marketing technology to export their data to better understand their KPIs, below. If you are using Salesforce for Nonprofits and the Nonprofit Success Pack, you can scroll down to use Tableau for this analysis.
 

Commonly Asked KPI Questions:

• What should you track? Agree on goals/priorities then KPIs you should pay attention to
• What if we don’t have goals? Use metrics to create and test your hypothesis for strategy
• How are they calculated?  Usually simple equations consisting of multiple data points
• What can you do with them? Benchmark your progress, identify trends over time, kick-off workflows, etc.
• Who should track them? Everyone! But have a business analyst or go-to data person too
• Where do they get them?  Digitized in reports and dashboard, and hopefully not manually

Organizing metrics are also important, as every KPI is a metric, but not every metric is a KPI. The few KPIs that you measure should be tied directly to organizational strategy, typically through a goal-setting framework. At Salesforce, we have a process that is adopted by many other organizations, called V2MoM (Vision, Values, Methods, Obstacles, and Metrics). Other organizations use things like OKRs or objectives and key results. 

Why are Nonprofit KPIs Important?

We know that most nonprofits professionals care about this topic of measurement through our own data-driven research. This is one of the areas we research, and people consistently respond feeling they could be doing a better job.

There are endless use cases for metrics and the underlying data that supports them. Let’s focus on a few categories, with specific examples of how you can shift your teams to be more data-driven.

• Strategic Prioritization: With every decision, focus on a single north star by making data-driven decisions.
• Justification: Get leadership and board members to see the brightness of your new north star
• Investment Asks: Get more rowers/oars, a better boat, or new engine (aka technology)
• Tactical Direction: Show marketing teams how to row faster in the right channels, or fundraising teams how to focus on the right donors
• Motivation: Energize your fundraising and marketing teams by illustrating how their inputs ladder up to overall goals, so they row in the right direction
• Trust: Build transparency with all employees with access to good data that lets them stop guessing
• Hygiene: Get your teams to swab the data-deck 🚢 by showing them how dirty it is

Each use case has different stakeholders, requirements, and levels of detail they need. So for each dashboard, you create, think of the end-user, and how it will be presented in a talk track, or digested later.

3 Dashboards with Types of KPIs & Definitions

Saying we’re in “unprecedented times” now sounds like a broken record. Change has accelerated in climate, politics, war, health, technologies, regulations, privacy, security, stakeholders, staff skills, communication channels, and everyone’s expectations. All these winds of change are gusting in different directions, so if you change your course to try and catch every gust, you might end up with baffled sails and staff or just end up going in circles with staff throwing up. 

Here are three dashboards with metrics you can use tomorrow, with real-time data at your fingertips through any of Salesforce’s analytics capabilities.

Dashboard 1: Supporter Engagement & Giving Metrics

There are a whole host of metrics and KPIs you could use to better understand this supporter view. Across our customers from both the nonprofit and the corporate worlds, the most successful ones know the financial and strategic value of each step of their supporter’s or customer’s lifecycles, along with the KPIs that underpin them. This acts as the foundation of their decision-making, and most take a long-term multi-year approach to measurement, ideally 3, 4, or 5 years, but sometimes longer.

Supporter Engagement & Giving Metrics & Definitions

Prioritization & Visualization

Prioritizing 3 to 5 primary KPIs will give you a valuable guide to inform decisions and communicate successes to stakeholders. A good start would be to set as your KPIs Revenue per Donor, Donor Acquisition Cost (DAC), Retention Rate, and Attrition Rate. These metrics provide solid signals of whether your strategy is going in the right direction. It is also important to understand the interplay between metrics. For example, a decreasing DAC is not necessarily a good sign if your retention rate and your revenue per donor are also decreasing. You could just be recruiting a poorer quality of supporter or it could be a sign your retention activity requirements improvements.

Primary KPI: Donor Lifetime Value (LTV)

Many marketing experts believe Donor Lifetime Value is the one north star in stormy waters and a tool to guide everything. Think of lifetime value as the engine room that runs across fiscal years – the more you build the value of each supporter over their lifetime with you, the more sustainable your growth will be.

However, calculating LTV can be difficult. You can use the sum of a donor’s lifetime giving for historical data, but predicting future value can be tricky. Some of the most sage advice on this topic for nonprofits is provided by Adrian Sargeant, an academic who has contributed vastly to the development of the profession of philanthropy. See more resources of his in the appendix.

Start Simple and Work Towards LTV

It is possible to set up simpler proxies or alternatives to lifetime value that can still go along way to developing this critical long-term supporter value view. Good examples include:

• Revenue per Donor calculations
• ROI calculations by cohorts of supporters recruited each financial year via your acquisition channels, and what value each cohort will achieve over 3 – 5 year time frames

Tip: Use historic performance of a cohort to inform forecasting models to project what the latest fiscal year’s cohorts will achieve over the next 3-5 years.

Example: Major Donors

Some high-performing teams have objectives tied to metrics such as the number of key interactions or key conversations they should be having with prospects each week, month, and year to move these supporters through the classic moves management approach. 

Dashboard 2: Channels & Campaign Performance

Who doesn’t like the good news from the End of Year or Giving Tuesday campaign? These metrics are great team wins, as both marketing and fundraising teams play a part and therefore can share in metrics that roll up to KPIs.

Also, the costs associated with these campaigns can be easier to measure than with frontline fundraising activities (where costs primarily include staff time and compensation). This common view of how marketing and fundraising teams are working together can build trust and a culture of measuring success.

Atlanta Mission Marketing & Fundraising teams at Atlanta Mission collaborate on the experience for different donors, but also share measurement.

Learn more in the Trail Guide to More Personalized Communications Session 1 & Session 2.

Channels & Campaign Performance Metrics & Definitions

All of these metrics can be grouped by campaign or channel.

Prioritization & Visualization

The more rigorous you are in using metrics to guide your decision-making, the more you will be able to prioritize your time, effort, and marketing spend.

When selecting metrics, make sure they are relevant to your goals, and organized with the end in mind. For example, if budgeting for End of Year, you might want to dig into historical performance, benchmarks, and return per channel  (in Salesforce this is Campaign Type) last year versus this year. End of Year campaign has many moving parts, so using campaign hierarchies can help you keep track of all aspects of a campaign and channel performance.

Where should you measure these metrics? CRM? Marketing System? Business Intelligence? Yes to all, depending on your need. Marketing systems will typically hold more engagement data than your CRM, but most data should be passed through to your CRM, making it easy to track conversion to dollars. Your CRM data can also be visualized using a Business Intelligence tool such as Tableau. Here’s an example:

There are also more robust tools built for marketers that aggregate disparate systems, connect all of your channels, and help you understand your marketing performance, such as Datorama.

Example: Emergency Appeals

A classic example can be emergency appeals. Like many fundraisers, we wish these weren’t necessary but public support is so critical during a time of emergency. Emergency appeals can recruit a high volume of single givers via digital channels and make a positive uplift to fiscal year gross revenue, the cost to income ratio, return on ad spend (ROAS), and acquisition channel performance in the year. However, unless your donor onboarding is very good, these supporters can be difficult to convert to long-term, repeat giving patterns. 

Dashboard 3: Planning & Forecasting

The world is heavily unstable, and no one can say what will happen tomorrow, other than it won’t be today. We want to help you spot future funding risks or opportunities with less foggy glasses, to make that leadership or board meeting a bit more of a breezy sail. At the same time, you can also use this data to drive team productivity and actions based on a clear future vision. 

Planning & Forecasting KPIs & Definitions

Prioritization & Visualization

Forecasts help you predict future performance and revenue as best as humans can, with the help of good processes supported by technology of course. Forecasting long term can spot macro trends, like annually planning with the board, or drive short term results, like a monthly forecast combined with an inspection of your fundraising team’s activities.

An effective forecast not only plans for the future but also ensures you are heading in the right direction at any moment, and small enhancements here can return drastic results.

Like with all metrics, a structure of how you measure, and when you do this is critical. Make sure every opportunity is connected to a single fiscal year/quarter and use campaigns to organize these gifts into more detailed categories.

Example: Planning

You can forecast top-down where you say “we need $1M for a new program” and spread the revenue needed over a forecasted period of funding time. It’s a great way to outline what you need to manage and expand your mission but can be difficult to achieve, and sometimes projects feel more like hope casting. 

Top-down thinking doesn’t help you think through 1) how you will get that funding or 2) if you can achieve that goal with bottom-up forecasting on historical data.

That’s where a bottoms-up approach can be helpful. Visualize last year’s major campaigns’ and appeals’ start and end dates on an X-axis, with corresponding revenue on the Y-axis. Discuss what worked, what didn’t, and what you will do differently this year. What can you lean into to get that $1M? Can you run a successful campaign twice, or do you need a new revenue source like a grant? Some major KPIs to look at here are your revenue projections over any period of time, forecast goals, and variance.

The people who can best judge whether a gift will close are the ones closest to the relationship. During annual planning:

1. Review a in software or a spreadsheet of last year’s gifts and mark those you believe will be renewed in the next fiscal year
2. Enter in potential new gifts from new and existing supporters
3. Review list of all expected gifts for the next fiscal year

Note: Often there will be some gap that you should expect to be covered by unplanned gifts so the forecasting process can be balanced based on this or left to fill out over time.

Example: Gala

Planning can be a challenge when your marketing and fundraising efforts are not forecasted together. For example, can you forecast what you’ll bring in from your Gala in online fundraising via live stream, in person at the event, sponsorships, and major giving? Do those teams know what they will contribute to that forecasted amount?

If you have set up a campaign hierarchy properly, you should be able to produce a forecast that shows everyone their respective metrics for the expected results of the event, with each group knowing the underlying activities that will get them there. If you did it last year or for similar events, you now have benchmarks to discuss if you might see similar results.

How to Be More Data-Driven

We know this is a lot of information, but we hope it does a lot to help you move in a more metric-based approach to performance.

Start Where You Are

You have data today. Start with what you have….and take a step at connecting data. That could be across the use cases we spoke about or others like:

• Team Management & Productivity
• Employee Satisfaction
• Recurring Giving & Upgrades
• Data & Forecast Cleanliness
• Donor Retention
• Donor Purpose & Trust (survey)
• Volunteer Engagement
• Program Clients/Beneficiaries
• Impact Measurement

Appoint, Educate, or Hire a Data-Captain

Someone needs to have responsibilities for being the captain of your data and championing the education of its value across your organization. If you can, find someone internally that has the capacity and give them the training they need (see this great Data Analyst training). That can lead to a new role if it’s a good fit, or their work can help justify the ability to hire someone new.

Get a Good Vessel (Technology)

Many nonprofits are either tethered to systems that only report on certain metrics in certain ways or may require you to export to a spreadsheet. Technology should support everything we spoke about in this article.

Example Use Cases: Learn More Here!

Your ship can be lost at sea without a north star based on data and metrics. Without common KPIs, you risk organizational friction, finger-pointing with uncomfortable meetings, and slower decision-making. As we started this piece by talking about the human side of data, we can never forget that supporters are real people, and look at data through that relationship lens.

Well, you’ve read through the entire article, you must be a data-do gooder or hungry for this type of content. We want to help you and others on your voyage, so please reach out if you need advice, comment to leave your perspective on data, or share this article if you think others will find it useful.