Measuring Success: How to Track KPIs for Nonprofits
As a nonprofit professional, you work hard to keep building and growing your nonprofit. But how can you measure your nonprofit’s growth over time? Or, more importantly, how do you use your nonprofit data to make more progress faster?
What successful fundraising campaigns should you run again? How much should you ask your donors for? What social media platforms engage your prospects well enough? Where are your donations really coming from?
By identifying and tracking your nonprofit’s key performance indicators (KPIs), you can get answers to these questions and much more.
So how do you get started? What is a KPI, and how can you use them to grow your nonprofit? In this article, we’ll unpack everything you need to know to know about nonprofit KPIs.
Table of Contents
- What is a Key Performance Indicator (KPI)?
- 13 Important KPIs for Nonprofits (And How to Calculate Them)
- How to Use Your Nonprofit KPIs
- How to Make Strategic Decisions using KPIs
- How to Track Nonprofit KPIs with Keela
What is a Key Performance Indicator (KPI)?
A Key Performance Indicator (KPI) is a metric that measures one particular aspect of your organization. It is used to assess the health and growth of your nonprofit organization over time.
There are 13 specific nonprofit KPIs that are considered standard reporting metrics, i.e., numbers and data you should always keep track of. These metrics are essential because they help you understand how well your organization is performing. You can use them to communicate your progress to your board members, co-workers, supporters, or other stakeholders.
What are the 13 Important Key Performance Indicators for Nonprofits?
A strong case exists for nonprofits behaving a little more like for-profit businesses when it comes to learning to claim more of the pie. But nonprofits differ from many businesses because their primary mission is usually not to increase revenue. The irony is revenue is a critical factor in achieving your mission and furthering your impact, and as such, it’s worth measuring.
You could use hundreds of KPIs to measure any and every part of your organization, from fundraising metrics to email marketing metrics to event performance metrics. The world is your data-filled oyster.
However, having too many KPIs is just as dangerous as having no KPIs, so take some time to identify the KPIs that are best suited for your organization and track them consistently. I would recommend monitoring at least 5 KPIs and not more than 20.
Here are the most important nonprofit KPIs you should be tracking:
1. Donor Retention Rate
Donor retention rate is the percentage of donors who give to your organization one year and then give the following year again. Considering the high cost of donor acquisition, it’s important to make sure you aren’t losing anyone.
How to Calculate Donor Retention Rate
- Take the number of new donors you acquired last year: A
- Count how many of those donors (A) also gave this year: B
- Then divide this year’s number (B) by last year’s (A) and multiply by 100: (A/B) x 100
2. Donor Lifetime Value
Donor lifetime value refers to how much revenue a single donor is likely to generate from the moment they first donate to the time they lapse. It’s not a precise science, but learn more about how to calculate your donor LTV here.
How to Calculate Donor Lifetime Value
- Take the length of time a donor remains an active donor: A
- Multiply (A) by the average donation of that donor: B
- Now, multiply (B) by how often that donor donates.
3. Average Gift Size
Average Gift Size simply refers to the average size or amount of donations you receive from your donors.
How to Calculate Average Gift Size
To calculate it manually, add up all of your “gifts” or donations and find the average for that period.
Average Gift Size = The sum of all gifts or donations divided by the number of gifts or donations received.
4. Donation Growth Rate
The donation growth rate is a measure of donation revenue raised year over year. It shows you how effective you are at growing donations annually and is an important consideration for your board of directors.
How to Calculate Donation Growth Rate
You will need to know the Average Gift Size (AGS) to calculate your donation growth.
Take the total amount of donations from this year and subtract your total donations from last year. Then divide your outcome by your total donation amount from last year. Now multiply what you can by 100.
To make it easier to calculate, use this equation:
[(2021 average gift size – 2020 average gift size) ÷ 2020 average gift size] x 100.
5. Recurring Gift Percentage
Recurring gift percentage is the rate at which donors repeatedly and predictably give to your organization over time.
How to Calculate Recurring Gift Percentage
Take the number of recurring gifts you receive monthly, divide it by your total number of gifts received, and multiply it by 100.
6. Fundraising ROI
Fundraising ROI is very important as it lets you know if your fundraising efforts are working. With this metric, you can easily check whether your fundraising campaigns bring in the returns you need or not.
How to Calculate Fundraising ROI
Use this equation: [(Funds raised by the campaign – Total cost of the campaign) ÷ Total Cost of Campaign] x 100
For example, if your campaign cost $10,000 and you raised $15,000, your ROI is: (15,000 – 10,000)/10,000 = 0.50
0.50 x 100 = 50%
Estimate Your Nonprofit Revenue with the Fundraising Forecasting Tool
Use this tool to accurately forecast gift sizes, grant funding from foundations, government, and corporations, individual and recurring donations, and much more!
7. Online Gift Percentage
Over the past year, the average nonprofit revenue received from online donations increased by 19%. With that in mind, it is crucial to track your online gift percentage. Online gift percentage is the proportion of your total donations that comes through your digital solicitation efforts.
How to Calculate Online Gift Percentage
The total amount of online donations received ÷ the total amount of donations received x 100.
8. Email Open Rate
Your nonprofit’s email open rate is the percentage of email recipients who opened a given email. It tells you if your audience is engaged, reading your emails, and thus likely to donate. It is an important leading indicator, so don’t ignore it!
How to Calculate Email Open Rate
Take the total number of fundraising emails opened and divide it by the total number of fundraising emails delivered, then multiply it by 100.
9. Email Click Rate
Your nonprofit’s email click rate is the percentage of recipients who clicked a link in your email out of those who opened it. This metric gives you insight into just how engaged your readers are. If they open your email but don’t click on any links in the email, it’s an indication that your call to action isn’t working.
How to Calculate Email Click Rate
Take the number of unique clicks in an email, divide it by the total number of emails delivered, and then multiply it by 100.
10. Social Media Engagement
If you use social media to communicate and engage with your nonprofit’s donors, prospects, and supporters, you should keep track of the rates at which your supporters are:
- Amplifying your message (sharing, retweeting, etc.)
- Giving you applause (through likes and follows)
- Engaging in conversation (commenting and responding)
Hootsuite outlined 19 social media engagement metrics that matter. Go over that article, and use the metrics listed to gauge your social media marketing efforts.
11. Donor Lifecycle Migration/Conversion
This metric examines your donor funnel. Your donor funnel refers to the stages of your donor engagement and stewardship efforts. It illustrates how your donor goes from learning about your organization to becoming a recurring or major gift donor. There are many versions of the donor funnel, but they all revolve around these same basic stages:
- Supporter or Engaged Individual
- Recurring Donor
- Lifelong Fundraiser
- Major gift donor
Your job is to steward donors along this path (or down this funnel) and encourage engaged individuals to become major gift donors eventually.
How to Calculate Donor Lifecycle Migration/Conversion
To calculate this KPI, you simply calculate how many prospects or donors move from one stage of the funnel to the next in a period.
For example, if 45% of your donors became recurring donors last year, your donor lifecycle migration or conversion rate for this part of your funnel is 45%.
12. Donor Churn
Donor Churn is a measure of how many donors you lose each year.
13. Pledge Fulfilment Percentage
Ah fulfilled promises – is there anything better?
How to Calculate Pledge Fulfilment Percentage
Calculate the number of donors who keep their promises with this equation:
(Number of pledges fulfilled ÷ total number of pledges) x 100.
How to Use Your Nonprofit KPIs
Now that you know the most important KPIs to keep track of, you should decide which metrics are worth measuring for your nonprofit organization. Your choice of KPIs may depend on your organization’s size, fundraising campaign types, and goals.
Keep in mind that these KPIs may change over time as your nonprofit grows. For example, Average Gift Size is an important metric that measures the average size of the donations in each period (month, year) or campaign. As your fundraising campaigns become more sophisticated, you may see this KPI change.
You may run a hugely engaging campaign and bring in hundreds of new donors, but when you look at the numbers, you see Average Gift Size (AGS) has gone down significantly. Your gifts are getting smaller. So what do you do?
In this case, you should think about the aspects of the campaign that helped attract donors. You should also consider adjusting your “ask” to raise the average gift size.
There are Nonprofit CRMs (software) that can track your KPIs for you so you can see how they evolve. Keela, of course, does this automatically, and we go a step further by suggesting the optimal dollar amount to ask for from each donor to maximize your AGS.
How to Make Strategic Decisions using KPIs
Remember a key performance indicator on its own is almost worthless.
Is an Average Gift Size (AGS) of $200 good? If your AGS was $350 last month, then it sure isn’t. But if $50 has been your AGS for years, then a jump to $200 is amazing! The point is you need to measure these KPIs over time to know if you are getting better or worse. So, where do you start?
Luckily, the internet provides us with nonprofit benchmarks, data on other nonprofits that may be similar to yours, so you can see how you observe trends and compare. Benchmark data is vital so you and your board can assess your team’s performance compared to other organizations with a similar size or cause.
So if you find out the benchmark AGS for organizations like yours is $275, and yours is $200. What do you do? You need to understand why.
By looking at a series of KPIs and becoming familiar with how they shift each month, you can begin to understand how your actions cause these shifts. You can test out specific fundraising initiatives to see what effects they have.
You can watch your KPIs and make some notes on what was going on externally (in the community) or internally (your team’s efforts) to cause the shifts you’re observing. Over time, you will understand how your actions affect your KPIs and, consequently, your organization’s performance.
Take reporting to the next level with the complete Nonprofit KPIs Guide
This guide will help you understand how to choose the right KPIs for your organization, how to create a KPI dashboard, and how to use metrics to tell a story.
How to Track Nonprofit KPIs with Keela
Keela’s mission is to help nonprofit organizations create efficient strategies and have more impact. Our suite of intelligent reporting insights allows customers to have increased visibility into their organization’s financial health and have a detailed understanding of where they stand compared to similar organizations.
Using Keela, organizations can:
- Visually track their performance over time
- Compare their progress and impact to similar organizations in terms of size and impact area.
- Download complete performance reports showing an analysis of their KPIs over time
- Trigger actions based on real data
If you’re using spreadsheets, that’s a great place to start for now. But if tracking and reporting your KPIs become too onerous for you, you should know that Keela CRM can easily display, track, and report your organization’s KPIs and benchmarks.
To learn more about how Keela can do all the KPI heavy lifting for you, speak with a Keela team member. Or, check out Keela’s Fundraising Report. It’s got everything you need to know in one report, generated automatically for your organization.
About the author:
Tasi Gottschlag, COO at Keela
A lover of learning… Tasi takes MIT courses, in her spare time…for fun. Want to get her attention, tell her she gets to compete by playing a game, it’s that simple. Tasi has an MBA from SFU. She built and sold her first SAAS tech start up in 2018.
A true geek she is a passionate builder of businesses, loving all the moving pieces, intricate dynamics, and systems that produce the results we see. In her free time, she loves to race sailboats, read inspiring business books, and has two amazing daughters who ensure free time is kept to a minimum. She adores Keela and the bold vision that drives the team.