Guest post by Zach Shefska, Fundraising Report Card
“So, I should be measuring changes in these numbers daily, is that right?”
I couldn’t help but shake my head at what I was hearing.
“No, my recommendation would be once a month at most. Daily simply doesn’t make much sense.” I heard a brief “Huh,” in response on the other line.
“Okay, so not daily, you suggest monthly. But what about weekly?”
I couldn’t help myself, I needed to understand why this development director was so determined to measure her fundraising metrics so frequently. “Well, weekly makes a bit more sense than daily, but still, I think monthly is your best bet. If you don’t mind me asking, what are you trying to accomplish by checking your average donation amount every day?”
The line went quiet.
A few seconds later she came back, “I’m not sure, I just thought that since I could, I should.”
For the past year and a half I have had phone calls like these with development staff all across the world. Ever since the Fundraising Report Card launched back in July of 2016, I have had the privilege, and pleasure, of virtually and physically meeting with nonprofit staff and reviewing their fundraising dashboards and metrics.
Each of these “training sessions” is incredibly valuable for both myself and the staff at the organization. During our hour together I have an opportunity to learn how, why and when they are reporting, analyzing and scrutinizing their fundraising data and metrics. Likewise, they get to learn the best practices that I have observed from hundreds of conversations with other nonprofits.
So, a few weeks back when one of these sessions ended up focusing on how often one should be updating, monitoring and measuring fundraising metrics, I felt compelled to write about it. Fortunately, the team here at CauseVox was interested enough to allow me to share this post with you all as well.
How Often To Analyze
Before we go into detail about how often you should be measuring and scrutinizing your fundraising metrics, it is important to identify what your most important “key performance metrics” are.
“It is important to identify what your most important ‘key fundraising metrics’ are.” tweet this
- Donor lifetime value
- First-time donor retention rates
- Repeat donor retention rates
- Donation frequency
However, the metrics you keep track of are specific to your goals and fundraising needs. To assess what fundraising metrics your nonprofit should be measuring, I recommend reading through a handful of blog posts:
- 3 Simple Fundraising Metrics for Nonprofits (and How to Calculate Them)
- Fundraising Metrics 101
- What’s the best fundraising metric? It depends.
Okay, with specific metrics off our mind, we can now approach the subject of how often to analyze them. From the story above you now know that I typically recommend reviewing key performance metrics (such as average donation amount) once a month.
To be entirely honest though, I actually endorse quarterly analysis more so than monthly: it tends to fit into a busy development staff’s schedule that way.
There is a fascination in our sector (most likely because a lot of for-profit companies pride themselves on this) of being “data-driven”. It’s almost like we strive to prove outsiders wrong. “Oh you think we’re antiquated because we’re a nonprofit? You’re wrong! I know that my average donation amount increased $3 this past week! Take that.”
Without question, being data driven is important. I’ve written extensively on that very subject in the past. But, over-analysis, the practice of scrutinizing your data too often and without good reason can actually become more of a problem than performing no data analysis at all.
Let’s take it a step back for a second. Have you ever been in a situation where you know you need to do something, but no matter what you find something else to occupy your time? Even when there is nothing to do you’ll find something other than what needs to be done to pass the time. I think we’ve all procrastinated like that before, right?
Well, in my experience, I’ve seen data analysis serve as the something that development staff focus on rather than the tasks at hand. Seriously. Instead of writing those thank-you notes or picking up the phone and engaging with donors, I’ve witnessed fundraisers focus on their Fundraising Report Card for five, six, even seven hours a day…. for multiple days in a row.
Don’t get me wrong, Fundraising Report Card is awesome. It’s a handy tool in the innovative fundraiser’s toolbox, but it’s not something to be used for hours on end day after day. And that is coming from the guy who built it!
That’s over-analysis. That’s using “I’m analyzing the data,” as an excuse to not complete more pressing tasks. There is almost nothing your data will tell you about your donors from one day to the next. For actionable data and trends to appear, you need to allow for some time to pass.
So that being said, reporting and analyzing your key performance fundraising metrics on a monthly or quarterly cadence makes sense. Think for a moment about what insights you might uncover from viewing month over month trends.
Start with donation growth. Aren’t you interested in how much revenue the organization brought in this month compared to last? Did donation revenue from February outpace revenue in January? Was this March’s donation revenue greater than last March’s? How? Why?
These are the types of questions and discussions that should occur as a result of analyzing and comparing monthly performance metrics.
Quarterly analysis also makes sense and is what I typically suggest to development staff who are new to analyzing their fundraising metrics. There is less variance in quarter over quarter perspectives. Month by month changes in key metrics (think count of total donors) can swing wildly depending on appeals, events and a variety of other factors.
Looking at key metrics quarter over quarter will smooth out some of those peaks and valleys, and tell a more complete story about your donors’ behavior.
“Looking at key metrics quarter over quarter will tell a more complete story about your donors’ behavior.” tweet this
What To Look For When Analyzing
Now we know that a typical cadence to measure our key performance metrics is monthly or quarterly, but what exactly are we supposed to be looking for? Without spending too much time on specific metrics, let’s assume that one of your key performance indicators (KPIs) is average donation amount.
When you calculate your new average donation amount each quarter (or use a tool like Fundraising Report Card) what should you try to glean from that information? All analysis starts with attempting to answer a question. Our hope is that by leveraging our fundraising metrics we will have a more informed answer to our question.
Our rationale for measuring average donation amount each quarter may stem from a recent initiative focused solely on upgrading existing donors. Part of your plan to measure how successful you are in upgrading donors is to compare quarterly average donation amounts.
By measuring those average donation amounts before starting the new initiative, and then again during and after the initiative, you’ll be able to (hopefully) validate that your efforts for the initiative were worthwhile.
The metrics you have chosen to track will dictate what to look for when you’re doing analysis. There is no perfect, fool-proof metric to track.
Rather, if you choose the KPIs you need to follow and then on a monthly or quarterly basis, see if those numbers are trending in the direction you would anticipate, you’ll be effectively analyzing your data. The next step is taking evidence-based action — but that’s a post for another time.
Applying This At Your Shop
Fundraising metrics are the talk of the town nowadays, and that’s well and good. But don’t get overwhelmed by “big data” and “artificial intelligence,” and don’t get bogged down in analysis paralysis.
Making the most out of your fundraising data can actually be quite simple. Choose your key metrics, measure them once a month or every quarter and then have discussions about what patterns or trends you find, and what that means for your future efforts.
Avoid daily reports and distractions, and instead leverage your data when the time is right. If you do that you’re certainly headed in the right direction.
“Avoid daily reports and distractions, and instead leverage your data when the time is right.” tweet this
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