Measuring your fundraising effectiveness

By Kirsten Bullock

Have you ever told someone you were a fundraising professional and they said, ‘oh, you’re a professional beggar then’. It makes me cringe just to type those words. If you’ve been in the field for a while, you know that nothing could be further than the truth. Arm twisting, begging and other ways to manipulate a gift out of someone might work once, but it’s not a way to build long-term, sustainable relationships with those people who will join with you to accomplish your organisation’s goals.

At its best, fundraising is about building long-term partnerships on behalf of the organisation. At its worst, it’s about a transactional approach that results in a one-time gift. Unfortunately, too often it falls into the latter category. And too often, the only measurement we look at is how much money has come in. While that’s certainly a good indicator to track, it’s definitely not the only one that should be followed.

Now the Association of Fundraising Professionals in the USA (AFP) have introduced growth in giving (GiG) reports, based on results from their fundraising effectiveness project (FEP). Just in case you’re not familiar with the fundraising effectiveness project, here’s the summary from AFP’s website:

The goal of the fundraising effectiveness project (FEP) is to help grow philanthropy’s share of the GDP. It pursues this goal by providing nonprofits with tools for tracking and evaluating their annual growth in giving. Growth in giving is the net of gains in giving minus losses in giving. Nonprofits raise more money by investing more money in growth-oriented fundraising strategies that both increase gains and reduce losses. The FEP is focused on ‘effectiveness’ (maximising growth in giving) rather than ‘efficiency’ (minimising costs). It conducts an annual survey and publishes gain/loss statistics in a yearly report through a partnership between AFP, the Urban Institute and AFP’s donor software workgroup.

That definition seems a little wordy to me, so my understanding of the project is that it helps people better measure their fundraising success. It provides a format so that you can compare your year-over-year results and look at indicators for long-term success, rather than just money.

While putting together the report can be a little complicated, the numbers it measures are fairly easy to explain. Gathering the numbers usually requires a good donor management software programme. The good news is that the members of the AFP donor software workgroup (who are partners in this ongoing study) have said that they would build in a report to give you this information.

First, it looks at new donations that are coming in. This could be in the form of new donors, returning donors (those who had stopped giving previously) and donors who gave higher gifts than in the previous year.

Then it compares those numbers to areas of loss in donations. This includes donors who gave less this year than last year, those new donors who gave last year but not this year and those donors (who had given for two or more years) but did not give this year.

AFP, at www.afpnet.org/FEP, has provided tools to help you develop these charts for your organisation. They are available as a service to the community, so you are not required to be a member to access them. Here’s a direct link to the page that provides a template for the report.

All that is well and good, but the most important thing is what the information helps you to accomplish. First, it provides a format for a report you can take to your board to help them understand what the total amount raised means. Next, it can help you measure how you’re doing against other participants in the study. Third, it helps you identify those areas you’re struggling most in – and address them appropriately. And finally, my personal favourite, it will provide validation regarding where you’ve done well – and gives you a reason to celebrate.

The 2010 fundraising effectiveness survey report found that, from 2008 to 2009, respondents reported gains of 45 per cent in new funds coming in. Unfortunately, this was offset by losses of 61.1 per cent, resulting in an overall loss of 8.1 per cent in gifts. The report, in PDF format and available here provides a detailed breakdown (just in case you’re as addicted to data as I am).

Are there similar projects in your part of the world? I’d love to hear about them.