With all the advancements in donor engagement strategies, fundraising techniques, and retention efforts, it’s nice to have reports like the Fundraising Effectiveness Project (FEP) to help break down the facts and to provide a thorough look into our data-heavy industry.
To be honest, I get giddy every time I know the latest quarterly installment and annual FEP is due out. But it’s not because I’m eager to hear about the latest retention numbers (well, maybe a little!) What I love about this report is that it provides detailed findings alongside concrete fundraising solutions just about every nonprofit can use, regardless of size or mission.
I see this survey as a free tool we can all use to analyze our results and then improve in the key areas. And since the 2018 FEP report was recently released, there’s no better time than the present to use it as a guideline to shape the rest of your fundraising activities for 2018.
2018 Fundraising Effectiveness Survey Report: A Summary
First, let’s break down the report. The Fundraising Effectiveness Project is sponsored by the Association of Fundraising Professionals and the Center for Nonprofits and Philanthropy at the Urban Institute, and the goal of this survey is to provide nonprofits like yours the data you need to increase giving rates.
Data from the 2016-2017 fundraising efforts of 13,601 nonprofits using five different software programs was used to produce the 2018 report. Critical data points include total dollars raised, number of donors, gains and losses by donor category (new, lapsed, etc.), rate of growth, and donor and gift retention.
4 Fundraising Strategies That Will Grow Your Funding
Instead of looking at the numbers (which you can find here), let’s take a look at the suggested strategies presented in the report and talk about concrete ways to put them into action.
1. Have The Right Systems In Place
“If your donor tracking and accounting systems do not currently report fundraising investment and results by gain/loss category, you should take steps to ensure that they do so in the future.”
Before you’re able to monitor your data, you have to track it. Naturally, donation tracking and management are topics we cover a lot here at CauseVox, and for good reason. They’re vital if you want to retain your current donors and expand your donor base.
What’s the right system to use? That’s the million dollar question.
There are numerous high-quality donor management systems out there, ranging in capability and price. Consider the key data points you need to track, such as donor information, gift amounts, frequency, source, payment method, and incentives received. Then, find a system that has this functionality, plus other extras, including software integrations, customer support, reporting options, and room for expansion.
And, following the FEP’s advice, ensure your system can accommodate these gain/loss categories: new, recaptured, upgraded (increased gift), newly lapsed, repeat lapsed, and downgraded.
2. Calculate Your Data & Compare
“To make the most use of this macro data, fundraisers and charities must be able to compare it to their own data and identify in which categories of donors they need to invest.”
“Nonprofit organizations should compare their results category-by-category with those of the FEP not only to see how they stack up but also to see where they should invest budgets and effort to maximize their fundraising net gain.”
When it all comes down to it, fundraising is about boosting your revenue and decreasing attrition. So yes, the FEP is perfect if you’re looking to understand how the fundraising industry is doing as a whole. But you need to go further than that in order to put YOUR data to good use.
Use the FEP results and compare it to your own. Look at the areas you’re gaining donors and why you’re losing some. Do your results stack up against similar nonprofits with the same focus, age, and geographic location?
If not, dive deeper into your data. Investigate commonalities between your retained donors, as well as your lapsed ones, and then use it to improve your fundraising and marketing strategies moving forward.
- How To Conduct an EOY Fundraising Review & Audit
- How to Actually Calculate Donor Retention (The Right Way) + 8 Essential Tips for Donor Retention
3. Ensure Your Fundraising Budget Matches Expectations
“Budgeting for fundraising that is cost effective, goal-oriented and growth-oriented requires that, year-after-year, organizations: 1. Make significant, incremental increases in their budgets, by categories of fundraising effort. 2. Measure the corresponding incremental return on those investments (ROI), by gain/loss categories. 3. Make additional incremental increased investments in fundraising effort, category by category, based on the performance (ROI) of previous fundraising activities.”
I’d put my money on the fact that fundraising budgets aren’t your favorite or most comfortable topic of conversation. Yes, even though Dan Pallotta’s TED Talk showed up on every fundraiser’s Facebook page for a few years doesn’t mean many outside of our nonprofit world have come to terms with the idea that it takes money to raise money.
But the FEP makes a straightforward and very real point: organizations must make investments in fundraising.
As you work with your team and board to develop a budget for the upcoming fiscal year, keep the true cost of “doing business” in mind. Calculate the average return on investment for each gift (how much it costs to raise $X), look at the areas where you’re spending the most, and compare that to your gains and losses.
Sometimes, it takes another staff member to elevate your fundraising efforts. Other times, all it takes is a deep look at your current data.
Helpful Resource: Fundraising Planning Guide, Calendar, + Goals Template
4. Ramp Up Annual Giving Efforts Through Data
“Nonprofits can use the following table for setting overall performance goals for doubling annual giving within a specific number of years.”
If you have plans to enhance or expand your organization’s programming, then you’re going to need to start working on increasing donor giving as soon as possible.
Thankfully, the 2018 FEP includes a handy chart to help guide your gift doubling efforts. Keep in mind that the average rate of growth for the average nonprofit is 7.6%.
Although the idea of “doubling” sounds daunting, it’s completely possible– even with limited resources. The key is to keep tracking your data and adjusting your efforts to maximize your efforts. For example, if you find that you’re losing monthly donors, then refresh and promote your monthly giving program.
Helpful Resource: 11 Ways to Segment Your Donors to Improve Your Fundraising
To sum it all up in a neat and tidy package:
- Data is great! Look at the FEP to learn about industry-wide data and then compare it with your own.
- You need a donation management system that tracks the RIGHT data
- Your fundraising budget should match your fundraising expectations
- Be realistic and plan ahead to increase your annual giving
Before you start planning your next year of fundraising activities, look at the data you’re collecting and then base your actions on the areas you want to improve on. It never hurts to be aware of how you’re stacking up compared to others in the nonprofit world.
CauseVox loves data. To learn more about how our online fundraising and donation management tools can help improve your bottom line, set up a free one-on-one demo with a member of our team.