Measuring Fundraising Success

Woman helping in a nonprofit's fundraising campaign

Donations make up a large portion of a nonprofit organization’s income, which funds the mission. But how can your nonprofit receive donations? How do you know if your fundraising efforts are making a difference? Read on to learn about maximizing the results of fundraising campaigns at your nonprofit organization.

Define What Success Means To Your Organization

The first step to measure success is to define what it means to the nonprofit. Without clear objectives, it is not possible to evaluate success. To define success there are some questions a nonprofit should address:

  • How are the contributions from fundraising going to be used?
  • How much revenue will it take to make a difference in the target community?
  • Are there other ways the organization can fulfill its mission?
  • What is the ideal timeline for donations?

How many campaigns can the organization realistically handle in one year?
Answering the questions above will create a solid foundation to build specific plans. Once the organization has a clear picture of how fundraising will affect its efforts, it is time to move forward.

Set Measurable Goals That Can Be Tracked Over Time

When setting out to increase revenue with campaigns, it is important to have clear direction about the potential outcomes of fundraising events. It is not enough for an organization to decide they need to earn more funds. The key is to take that large goal of earning revenue and break it down into smaller, reasonable goals that can be measured.

Besides total revenue collected, there are other areas nonprofit organizations can measure when making and evaluating goals. Donor retention is important to an organization because it is always beneficial to have a group of donors that regularly contribute. Repeat donors are more reliable and cost-efficient than counting on new donors. Measuring the number or percentage of donors that return to the organization is a great indicator of effective donor engagement. A reasonable fundraising goal would be to increase donor retention rates over a measured amount of time.

Donor growth is another great measure of fundraising efforts. Donor growth that increases over time is a good indicator of organizational growth. Growing the number of donors is the result of a strong marketing campaign. Ideally, as donor growth increases the donor retention rate will follow. Setting specific goals about the number of donors that contribute to a campaign is a great measurable way to keep fundraising efforts on track.

Experiment With Different Fundraising Strategies To See What Works Best

Not all fundraising strategies work for all nonprofit organizations. Many nonprofits fall into the trap of mimicking the campaign efforts that they see from other organizations. While the success of others is a great place to begin the brainstorming process, a nonprofit must find what fundraising strategies will work the best for their unique mission.

Nonprofit organizations all share a common goal, fulfilling their mission. That mission is where the fundraising efforts should sprout from. The specific community and purpose of the organization will define the ideal donor audience reached. Making fundraising personal is the best recipe for success, but it is not a guarantee.

Nonprofits must be resilient and flexible in their fundraising efforts. When a campaign is not successful, change courses. Go back to the drawing board as soon as necessary and try something new. A newly established nonprofit will need to experiment with different strategies before they develop an effective campaign.

Learn How to Calculate Fundraising Event ROI

While calculations rarely tell the whole story, there are a couple of numbers commonly used by nonprofits to measure the success of their fundraising campaigns. By using actual data to evaluate each campaign, a nonprofit can make effective decisions about future efforts.

Calculate your campaign’s costs.

One way to evaluate the cost of a fundraising event is to calculate the cost per dollar raised (CPDR). This figure tells the organization how much money is spent to make one dollar. To arrive at the CPDR, take the total expenses and divide by the total revenue earned. If the final number is less than one, it shows that the fundraising campaign successfully earned money.

Calculate your fundraising ROI.

Different from the CPDR, the return on investment (ROI) measures the overall success of a specific campaign, or of collective fundraising efforts. To get ROI, the amount of revenue earned by the campaign or total efforts is divided by the amount of money spent on the fundraiser.

How to Improve Your Campaign ROI

Minimize your costs while increasing your returns.

To generate more revenue from donations, expenses should be constantly evaluated to see if costs can be decreased. There are many strategies to decrease costs and maximize returns. Evaluating current results, maximizing marketing potential, and increasing online presence with effective social media campaigns are some areas to focus on in order to increase returns.

Evaluate results regularly and make changes as needed.

Tracking donor retention, donor growth, CPDR, and ROI regularly will help an organization evaluate fundraising results and make changes when necessary. While tracking success can be done manually, many organizations find it more efficient to track fundraising efforts in real-time using a cloud accounting software like Sage Intacct.


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