You pushed hard this year-end season. Hopefully it paid off and you raised a lot of money. But, do you really know how to evaluate your year-end appeal? Or do you just count how much you raised and call it a day?
The amount of money you raised is important. But there are several other ways you should be evaluating your year-end fundraising push. Here are five key data points that you need to measure, if you are not already:
1. Online conversion rate.
As you know, digital-first strategies have taken center stage in the world of fundraising, especially with all those December 31 “last chance” emails. So, it’s more important than ever to make sure your donation page is working for you, not against you!
It’s easy to calculate your online conversion rate! You are using Google Analytics or another platform to monitor your web traffic, right?
If so, then you just need to follow this simple formula: Divide the number of online donations you received by the number of people who visit your online donation page during a given time period.
Example: If you brought 150 people to your online donation page, and secured 40 donations, your online conversion rate is 26.6 percent! Which is above the average 22 percent for nonprofitsccording to M+R Benchmarks. Good job hypothetical you!
2. Direct mail response rate.
It’s also important to understand how your non-digital communications are performing. And the response rate on your direct mail appeals can tell you a lot about how donors react to your mailings.
If your response rate has been lagging – your data may be the reason why.
Keeping good data hygiene is a common issue for nonprofits. And it’s hard to get an accurate picture of how your communications are performing when you don’t take time to clean up and remove inactive members of your audience from your mailing list!
Some of your contacts may have changed their address, passed away, or stopped giving for a number of reasons. Ultimately, you end up skewing results when sending mail to people that will never respond!
Cutting down your mailing list to only those who want to receive your mailings will give you a more accurate picture of your response rate. This also means that you can ditch direct mail and send digital communications for donors who specify they want to go green!
But what if your data is up to date and you’re still underperforming?
Have you considered how your messaging, layout, or the timing of your mailing could be impacting results? It might be time to assess your approach and try something new!
And remember, only experiment with one aspect of your mailing at a time so you can see how it affects your response rate.
3. Cost per donor.
Do you know how much it costs you to acquire a donor?
For many nonprofits, the answer is “kinda” or “not really”. Luckily, like your online conversion rate, all you need is a formula and a little data to figure it out!
Simply divide the number of new donors you acquire by the expenses related to donor acquisition for a given time period!
This will give you a better picture of what it costs your organization to acquire each new donor.
Compare this number to the average lifetime value of a donor and determine if there is room for improvement.
For example, you have some work ahead of you if it costs $50 to acquire a new donor and the average donor only makes a one-time gift of $25.
This is a bigger problem than most nonprofits think! In fact, it can cost 50 to 100 percent more to acquire a new donor that you will receive from their first gift, according to Bloomerang.
And only 19 percent of donors will give again after their first donation according to the Fundraising Effectiveness Project!
This leaves you with two ways to improve:
- Find ways to lower the cost of acquiring new donors
- Improve donor retention to maximize a donor’s lifetime value.
4. Average gift size.
What is the average size donation you receive and how has it changed over time?
This is an important metric for evaluating your year-end appeal. It can also tell you a lot about how your donor base is growing and if you are using effective personalized ask strings.
Pro tip: your average gift size should grow overtime!
But if it’s not, look at how your donors respond to your personalized asks. If they consistently choose the option at the low-end of your ask string, you many need to be less aggressive.
Let’s take a look at your current ask strategy.
A common ask string goes something like this:
- ASK 1 = Last Gift
- ASK 2 = 1.5x Last Gift
- ASK 3 – 2x Last Gift
This approach subtly encourages donors to give more than they did last time. However, if the donor’s last gift was 3 years ago, you might want to be softer. Or, if you find too many donors are choosing ASK 1 (or lower), use a less aggressive ask string such as:
- ASK 1 = Last Gift
- ASK 2 = 1.25x Last Gift
- ASK 3 = 1.5x Last Gift
Then, couple your ask string with messages about the impact a slight increase in gift size will have on your goals and keep track of how donors respond. You can return to a more aggressive approach later on for donors who chose to give at the high end of this ask string!
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5. Return on investment.
This final point encompasses everything we’ve discussed earlier in this blog post. After all, this is the key metric your organization’s leadership will have their eyes on. And while knowing all of the things that go into your ROI will help you improve, it’s important to have an understanding of the big picture as well.
For example, let’s say your campaign raises $30,000. That sounds great! But it is a lot less impressive if you spent $25,000 getting there. Most of the money your donors are giving goes right out the window! But if you spend that $25,000 and raise $50,000, your ROI is much stronger.
So, think of ROI like your report card. It won’t contain every detail, or highlight every positive or negative in your strategy, but it does paint a broad picture of how the money you spend is making an impact on your work.
Understanding your ROI is helpful for explaining how your fundraising outreach is performing to those who are less involved with the day-to-day of your development team, such as board members, executives, or sponsors.
But it is certainly not the end-all be-all! So be sure to analyze each of the data points we’ve discussed in this post when it comes time to evaluate your year-end appeal!