Did you read the phrase “nonprofit metrics” in that title and groan a little inside? You’re not alone! Measuring performance can feel overwhelming, especially if you’ve never done it before.
Some people love spreadsheets and dashboards. Others (including this author) feel a deep sense of dread every time they’re asked to “pull some numbers.”
But, love it or hate it, measuring the right nonprofit metrics can transform the way your organization works. In this article, we’re going to cover why, what to measure, and how to use your metrics to be more effective.
Why Measuring the Right Nonprofit Metrics Matters
Tracking your performance consistently over time is really important for a few reasons.
One reason is that it will help you spot issues before they grow into real problems. Your metrics can give you insight into which of your strategies work and which need to be adjusted.
Want an example? Say you track your donor retention rate every month, and you notice that it’s been down for the last two months. You can choose to review your new-donor welcome email series, revisit how frequently you’re communicating impact, or prioritize reaching out to recently lapsed givers.
The right metrics can also help you make informed decisions and try new tactics with less stress. Should you focus on including community stories in your next capital campaign appeal, or should you share a behind-the-scenes look at your new facility? Your response rates to past appeals can give you insight into the kind of messaging that your supporters find compelling.
Your metrics can be really handy. That said, not every number is worth your attention… and what you do measure should be approached carefully.
The Importance of Nuance in Nonprofit Metrics
Even the most common nonprofit metrics can become unhelpful (even harmful!) if you’re not careful with how you approach them. A trend or pattern that’s helpful in one context might be misleading in another.
Average donation amount is a great example. It’s a standard key performance indicator (KPI) that lots of fundraisers track. If you look at it right, it can help you understand how much your typical donor gives, how effective your appeals are, and even how to improve your online donation forms.
But if you focus on it too much, it can have some negative consequences. If you’re fixated on increasing your average gift size, for example, you may inadvertently find yourself chasing larger gifts from major donors instead of focusing on building a larger community of everyday donors.
Need an example? Say you raised $6,000 in your most recent campaign. If you got that money from three donors, your average donation amount is $2,000. But, if you got that money from 300 donors, your average donation amount is “only” $20. You’ve still raised the same amount of money, but only one scenario includes you engaging your broader community. Neither scenario is good nor bad, but both have different implications.
Metrics are tools. They’re not always targets! Choose metrics that will help you answer real questions about your work, and always make sure you’re considering the nuance behind the numbers.
3 Nonprofit Metrics You Should Consider Tracking
While the “right” metrics will vary depending on your goals, programs, and community, here are three things you may want to track while you build a healthy, resilient nonprofit.
1. Supporter Retention Rate
Your retention rate is the number of supporters who get involved one year and come back the next. Fundraisers measure donor retention rates, but you can use this for all kinds of supporters! Tracking retention rates for members, volunteers, or event participants can be really helpful.
Measuring your retention rate is important because generosity grows over time. People who stay connected to your work are more likely to increase their giving, join recurring donor programs, or support you in new ways. This metric will help you understand how well you’re keeping your community engaged and help you identify opportunities to do even better.
You can get really creative here! If you dig into your data, you can learn all kinds of fascinating details about your community. Are some types of supporters more likely to return than others? Do people who donate to specific campaigns or channels tend to stay involved longer? Are your stewardship efforts actually improving your retention rate? Do volunteers for a particular campaign stay engaged at higher rates?
These are the kinds of questions you can start answering with your retention data, and that can inform your strategy in tons of different ways.
2. Supporter Acquisition Rate
You want to retain your supporters. And you want to acquire new ones, too! That’s why you might want to start tracking your supporter acquisition rate.
This is the percentage of your supporters who are brand new, and tracking it can help you understand how well your outreach strategies are working. If you’re running a peer-to-peer fundraising event, trying a new direct mail campaign, or investing in new marketing activities, this metric can show you whether you’re reaching new audiences and inspiring them to get involved.
Measuring this regularly will also help you detect potential problems. If your acquisition rate drops over time, you need to do some troubleshooting. Did your messaging change? It might be time to try some different channels. Did acquisition from social media platforms slow down? Review and adjust your tactics.
You can use information to evaluate which campaigns, appeals, or platforms are bringing in new supporters. You can even break it down by audience type: Are you acquiring lots of volunteers but few new donors? Is your acquisition rate for one-time donors going up, but going down for recurring donors?
Those insights can help you refine your strategies, identify and fix potential problems, and decide if you want to try new tactics.
3. Appeal Response Rate
Your appeal response rate tells you how many people took action after receiving a specific appeal. This is a really important tool for understanding the kinds of messaging, stories, and appeals that motivate your community to get involved.
When people respond to your outreach, they’re telling you something moved them. This is true for donors, members, volunteers, event registrants, and everyone in between. When you track this metric over time, you’ll start learning the types of messaging, timing, and even design elements that inspire your community to act.
Pay attention to patterns. Do certain themes or stories consistently drive higher response rates to your fundraising appeals? Are people more responsive when they receive an appeal at a specific time of year? What happens when you experiment with different visuals, layouts, or calls to action?
Understanding your response rate will help you craft more effective, emotionally intelligent appeals. Over time, it helps you build stronger relationships with the people you’re trying to reach.
Tips for Tracking Nonprofit Metrics Without Getting Overwhelmed
Even the most seasoned fundraisers can be intimidated by identifying important metrics, tracking them, and interpreting them. If you hate measuring your progress, here are four tips for making it more bearable.
- Limit what you measure. Choose three to five metrics that relate directly to your goals. You can always add more later.
- Measure consistently. Track your metrics at the same time each week or month. Repetition can be calming! You’ll get better at running the numbers, you’ll spot trends and correlations more easily, and you’ll stop getting that pit in your stomach that materializes every time someone asks for an update.
- Write down your process. Save yourself time and stress by documenting how you calculate each metric and where you pull your data. If you can, build a simple spreadsheet or dashboard that does the math for you. (Psst: If you’re a Neon One user, try adding a widget to your dashboard so you see your progress every time you log in!)
- Choose progress over perfection. Your data won’t always be perfect. You’re going to have to adjust your goals. You’re going to make mistakes. And that’s okay! You’ll smooth it all out the more comfortable you get with the process.
If you don’t regularly track your progress metrics, starting the process is going to be overwhelming. Just stay consistent. When you know what to measure and when, reporting will be less scary and more useful.
Take the Next Step
You don’t need to be an expert to measure your nonprofit’s metrics, and you don’t need to track every little data point. Just choose a handful of metrics that are important to you and get good at interpreting what they mean.
If you’re ready to get started, this free worksheet is for you! It walks you through some common nonprofit metrics and how to use them. It even includes formulas you can use and tips on how to find the data you need!
