Unless you measure your nonprofit’s performance, it’s impossible to know where you are succeeding and where you need to focus future efforts. There is no one-size-fits-all approach to measuring performance, but every successful fundraising team should have the ability to assess and refine its data. The goal is then to turn those data insights into actionable tasks. 

If you are not sure which metrics are essential or how to convert your data into something stakeholders can grasp and absorb, start simply by setting clear goals. Then, guided by those goals, use effective data collection tools, measure outcomes, implement improvement strategies, and promote transparency. By applying these helpful ways to measure and optimize nonprofit performance, you can drive positive change for your organization.

Setting Clear Goals

Usually, the mission statement will reveal the overall goal for an organization, but are often overreaching by design, possibly broader than you need for setting data-driven goals and objectives. The goals that get you to your mission should be specific and measurable, but also be aligned with the organization’s values.

Ideally, all nonprofit goals should have numerical measurements that are referred to as key performance indicators (KPIs). Your team can decide which data points and KPIs matter most to your strategy and your mission.

  • Financial KPIs: Annual revenue, year-over-year growth, overhead costs, donation growth, fundraising return on investment (ROI), surplus/deficit
  • Marketing KPIs: Conversions, email click-through rates, social media engagement, time on website
  • Fundraiser KPIs: Donor retention rate, average gift size, recurring gift percentage, online gift percentage, fundraising ROI

Also include data-driven goals with performance reviews. Measuring and optimizing staff-related KPIs ensures employees are being rewarded and challenged, which ultimately drives the success of your organization. Some examples:

  • Employee retention rate
  • Absenteeism rate
  • Employee satisfaction, quantified on a questionnaire or survey
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Utilizing Effective Data Tools

Many nonprofits started out as a grassroots group with a dream and some bootstraps. This can be inspiring, but it is not always scalable and definitely not measurable. That’s where technology can make a real impact. Data analysis tools are helping organizations of all sizes to automate, streamline, and standardize processes so they can measure and optimize performance.

The fundraising team for the Grand Canyon Conservancy uses artificial intelligence and data analysis embedded in its fundraising software to make predictions, set goals, and share progress with stakeholders. This technology has helped Cassie Chilcutt, prospect research manager for the Conservancy, reduce major gift officer portfolios by more than one-third after removing low-likelihood prospects.

“(It) has helped me identify the correct constituents to place into gift officer portfolios,” she said. 

Data analytics can help nonprofits examine patterns of behavior among donor groups so the organization can craft a message and a fundraising strategy that will be most relevant. For instance, a well-connected, extroverted donor might like the opportunity to sponsor a lecture series or a group tour.

Donor segmentation helps you use insights about donor preferences to engage supporters more deeply with your organization. Each donor action in response to your outreach produces additional data to inform your next interaction. 

Learn more: Using Data to Make Annual Giving Work for You

Measuring Outcomes

Outcome metrics are powerful, necessary tools for demonstrating transparency and accountability. They measure non-financial or financial criteria that reflect the efficacy of an organization, program, or initiative. Quantifying the impact and success of services and programs can be challenging, but it’s essential. Without a clear understanding and representation of your outcomes, it can be hard to secure funding or make improvements to better serve your community.

There are three “results” categories producing data points that can be measured.

  • Inputs: The resources—financial and non-financial, human, and material—used to conduct an activity. This category could include volunteer time, equipment, how many books were provided by a corporate partner, etc.
  • Outputs: The products, goods, or services which result from an activity. This measurement signifies how much was done: number of students enrolled, number of concerts performed, number of sea turtles rescued.
  • Outcomes: The effect of an activity on your mission. There are short-term outcomes (cleaner beaches, better access to childcare); intermediate outcomes (boosting awareness, changing policies); and long-term outcomes (preserving the environment, improving society).

“Outcomes” is often used interchangeably with impact, but it’s most helpful to think of outcomes as a change in skill, knowledge, attitude, behavior, condition, or status. 

Metrics for outcomes should include all measures that reflect organizational performance. This is how you show what success looks like. Outcomes are becoming increasingly important when seeking grant funding, so it pays to fine-tune the details. Define specific indicators to make sure that you are providing a complete picture to key stakeholders, constituents, and staff.  

How do you present nonprofit outcomes?

  • Quantitative data: Reports that use numbers, such as how many people were helped per dollar you spent
  • Qualitative data: Reports that use language, such as impact stories or survey results

Many organizations showcase their outcomes in their annual report. It’s also important to have your website up to date to communicate your successes and identify areas for improvement. Your goal is transparency. Sharing this information publicly provides access to both internal and external constituents.

Improving Strategies

Despite the benefits strategic planning delivers, many nonprofits fail to approach it as part of an integrated, enterprise-wide process. Strategic planning helps your organization meet challenges effectively while also taking advantage of new opportunities. As part of your strategic plan, conduct a SWOT analysis with input from across the organization including finance, volunteers, board members, and fundraisers.

A SWOT analysis is a framework of four factors to help you to prioritize your strategy:

  • Strengths: What are you getting right?
  • Weaknesses: What or who or where are your challenges?
  • Opportunities: What or where are your potential sources of growth?
  • Threats: What are the potential roadblocks to fulfilling your mission?

After you use the SWOT analysis to develop your strategic plan, revisit the plan regularly. You might need to modify or adapt as circumstances such as economic trends and policies change.

Utilizing the right tools, data, and performance metrics is vital in helping nonprofit leaders show progress to their funders and other constituents. And holding your organization accountable to its strategic plan will help you increase your capacity and improve your return on investments.

The post Helpful Ways to Measure and Optimize Your Nonprofit’s Performance first appeared on The ENGAGE Blog.