Here's how you can evaluate fundraising success by considering key metrics.

Evaluating fundraising success involves a comprehensive understanding of key metrics. *Donor Retention Rate is crucial as it measures the percentage of repeat donors, indicating the effectiveness of your engagement strategies. *Cost per Dollar Raised (CPDR) helps assess the efficiency of your fundraising efforts. A lower CPDR signifies a more cost-effective campaign. *Return on Investment (ROI) is another vital metric, providing insight into the profitability of your fundraising events. If you have any additional thoughts or contributions, please reply to this comment. I always appreciate and look forward to hearing more from you. Thank you!

Yes, total raised is important, but at what cost? Not just to you personally, but also to board members, staff, stakeholders, and most importantly, donors. That is, there is always a 'cost' for donors to meet your total raised, and many times it's not about what they give! Other factors are very important, to the time they spend, the feedback they receive, and even how much hassle it is to make a donation in the first place. Good (great?) nonprofits realize this and make sure that the total giving is not the final goal in a given year, and exchange lower totals for improved sustainability over the long term.

It really depends on your fundraising goals. If your goal is a certain dollar amount then average dollars per donor is a great start. If your goal is to increase your donation reach to new donors then even $1 is a success from a new donor is success! If your goal is to raise a certain amount of dollars in a certain amount of time, for example during one event, then considering the time it took is important as well. Fundraising is about relationship building. So for example if you bring on 2 new board members and that increases your potential reach to 50 more potential donors because they have a great network of friends and connections then that’s success too! It’s about strategy and relationship building.

In my experience, when it comes to crowdfunding, the bottom line is how much money you're able to raise. That's why the total amount generated is such a key indicator of success. It's a straightforward way to see if you've hit your target or fallen short. But, it's not the whole story. You also need to think about who's donating, how much they're giving, the time and hustle they go through to donate and what it's costing you to bring in those funds. By looking at the big picture, you can get a real sense of whether your campaign is working and make adjustments to boost your chances of success.

What does most research show is the most important fundraising key indicator? It's 1st to 2nd gift retention! Why? Well, more than 60% of first-time donors never make a second gift to an organization... so we all spend time chasing after first-time donors then don't acknowledge them meaningfully, don't demonstrate the impact of their support, and don't engage them thoughtfully in our work. If we can improve the 1st to 2nd gift retention rate, we're on the path to developing stronger likelihood for lifetime (5+ year) retention.

As a co-founder of a crowdfunding startup, I know that tracking donor growth is important. It helps us understand how well our fundraising efforts are working. By comparing new donors to previous periods, we can see what's working and make informed decisions. A growing donor base means our message is resonating and we're reaching new supporters. Showcasing donor growth also builds trust and credibility, encouraging more people to support us. By monitoring donor growth, we can improve our approach, maximize our impact, and build a loyal community of supporters.

Overall, growing your donors is important as it does build the critical need for 'social proof', a very well proven concept that donors give to nonprofits when they see other donors doing the same thing. At the same time, be wary of the opportunity cost to grow your donor base- and this will vary based on your nonprofit's priorities as well as where it sits in it's lifecycle... is it starting out, rapidly growing, maturing, or declining (or a better phrase- "Met its goals it was created to achieve!").

It's not about "donor growth" or acquisition rate - the more meaningful "growth" metric is lifetime value. While we certainly have to grow the top of our funnel with likely or prospective donors through prospecting, we have to pay close attention to supporting and engaging donors through their first, second, and third gifts. If we can earn their trust through to a third gift in three years or less, we're very likely to retain them for 5+ years or longer and to grow their support over time.

I've found this question of "average gift size" can range from high to low importance based on so many factors of the nonprofit itself. Some nonprofits have a mid to low average gift size, but a passionate army of supporters numbering in the thousands or more. Some nonprofits have a high average gift size with a small bench of loyal supporters. You have to ask yourself: what's the right mix of types of supporters that's right for your nonprofit in service to its vision and impact, and aligned to the types of communities it serves?

The cost to raise should not only focus on dollars, but has to include time. I once ran a fundraiser for our school district that took 6 months to plan and we ended up raising less than $5k. Calculating the amount of time spent for such a low, unexpected, profit, meant we basically made cents a day. In planning a new fundraising event or campaign, make sure to include time and resources when forecasting the cost.

Many nonprofits focus on CTRD because they are in a scarcity mindset and thinking "Where can we cut costs?". An equal and opposite metric is ROI (Revenue/Expenses). This provides a more growth-oriented discussion to identify how much was RAISED per dollar spent. While they both use the same data points (revenue & expenses) it allows thoughtful discussion and decision-making based on how it is framed and what the needs are of the organization.

Let's flip the script on fundraising metrics! Instead of just focusing on Cost to Raise a Dollar (CTRD), let's also look at Return on Investment (ROI). CTRD helps us trim the fat, but ROI shows us the potential for growth and impact. By considering both, we can shift from a mindset of scarcity to one of possibility, and uncover new ways to drive real change and success.

In my experience, donation retention is crucial for nonprofits' long-term impact. Tracking metrics like DARR helps nurture existing relationships and retain support. Personalized communication, flexible giving options, and regular updates can further improve retention, building a loyal community and ensuring sustainability. By prioritizing donor relationships, nonprofits can create a stable foundation for their mission and make a lasting difference in the world.

Yes, but - not all types of retention rates matter equally, nor should they. Among your most important retention rates has to do with length and size of giving: what's your YOY retention rate for donors who've given 3 years or longer? How about for donors who give at $X or higher? Also key: the retention rate from first to second gift donors. That's where the vast majority of donors fall off. If you improve your first to second gift retention rate, that's a terrific sign of long-term health and strength.

Donor Retention is probably the most important metric to track for a healthy nonprofit. But this can be greatly improved by focusing on DARR, i.e. Donor Annual Revenue Retention, which is a much better measure to look at ALL of the dollars raised from the same group who donated in the last 12 months, vs. the those same donors in the last 13-24 months. This metric gives you a much better idea of the fiscal health of your organization, as the percentage can be higher than 100% and focuses on how much *revenue* you retain from the same group of people than the actual count of people.

Conversion rate can be applied beyond the success of an appeal. When looking at your pipeline you can identify what your conversion rate is at each stage and overall of your pipeline and ultimately you, as a fundraiser, what your conversion rate is for solicitations. As a CDO, this was my go-to metric when evaluating my staff's performance AND determining accurate forecasting. With this metric, I could determine how many new prospects and what their average ask amount would need to be for my MGO to increase their performance by ___%. This is also a powerful metric when working with executive leadership on managing expectations and keeping strategic discussions based in reality.

For major and planned giving, it is important to first focus on measuring intended activities rather than simply dollars raised. Goals for personal meetings (in person or Zoom) with prospects. Portfolio size and composition of those actively under management. Number of proposals. Be careful not to automatically raise the proposal goal too high. More is not always better. There is a point at which unintended consequences can occur. an MGO might feel an incentive to push an ask too early...which often also means at a lower gift amount to meet aggressive proposal goals.

There are three key elements to remember when thinking about important fundraising metrics: 1) They are either LEADING or LAGGING 2) They are either Broad or Specific 3) They require time Leading metrics predict future performance and lagging measure actual performance. Broad metrics capture big-picture elements and facilitate strategic discussions and decision-making. Specific metrics are limited to a specific element of your overall strategy. Time = accuracy. The more history you have to reference, the more accurate your metrics will be. It evens out blips and enables true trends to be seen. Figuring out the right mix of these three elements is key to high-performing development.

Overall, I think this article does a great job of focusing on the most important metrics, but not all of them. For example, it's great to know the average gift amount, but unless you compare it to the *median* gift amount, you may not be getting the whole story!