You can bring greater effect to your fundraising effort through the adequate management of your fundraising team. In today’s podcast, Ellen Bristol from Bristol Strategy Group and Stephen Halasnik from Financing Solutions highlight the importance of leveraging actionable data to make informed decisions in managing the performance of the fundraising team. Using data and metrics helps nonprofits to build objective fundraising campaign-and compare progress against targets.
The Importance of Data and Metric Managing the Performance of the Fundraising Team
The success of every nonprofit is hinged on the performance of the fundraising team. Nonprofits should gravitate towards the efficient management of their fundraising teams to drive financial growth, consistency, and sustainability. Managing the performance of the nonprofit’s fundraising team involves leveraging data in the fundraising effort to make informed decisions. Plus, there should be a metric for measuring the team’s capacity to reach the nonprofit’s goals. Data helps you figure out what’s going wrong upstream.
It’s important to track data in the fundraising effort because not working with data is like being in a wilderness without a compass. Data is so crucial in every business that concerns raising money. In other words, data helps optimize the fundraising team’s performance by identifying more efficient ways of raising money. A nonprofit can use data to make better decisions and analyze donor trends and satisfactions in order to retain them. Measuring income growth and consistency helps nonprofits to actualize their fundraising goals.
Measuring the fundraising team’s performance
If you want to ensure the result of your fundraising team, have a measurement in place to understand their activities.
The management of the performance of the fundraising team should include having a specific and well-defined yardstick for measuring donor retention. Donors retention is measured by how many donors continue to fund your nonprofit mission after the first contribution. Unfortunately, experience has shown that the nonprofit industry has a deplorable retention rate of about 40%.
It is essential you gather actionable data to calculate your donor retention rate for each category of donors and make tactical improvements to donor retention. After all, the retention rate is an important step in your organization. So tell your fundraising team you’re measuring their abilities to retain donors.
Try to understand what your people are doing on an activities basis and then determine what the outcome will be. In that way, you will not be surprised if the expected result did or did not come through. Moreso, the act of measuring something brings attention to it. Measurement ensures your fundraising are kept on their toes in their fundraising efforts.
Tracking potential donors.
Every fundraising efforts have four phases, including the interest phase, development phase, commitment phase, and engagement phase. As a nonprofit, you should be able to keep tabs on potential donors from the interest to the engagement phase. The idea of tracking your potential donors in phases helps you determine what to do to move them forward down to the final phase.
The Interest Phase
Every fundraising campaign starts with identifying the potential donors interested in supporting your cause. Tracking the interest of potential donors is critical in the fundraising process. A critical question to consider at this stage is: how many new people (big donors) do you have in a queue in this phase.
The development phase
The next thing you should do is to cultivate and nurture the prospect for the potential solicitation. This step requires months of relationship-building before considering soliciting funding.
The commitment phase
At this phase of the fundraising campaign, you approach the prospective with a specific request for support. However, this is the most difficult part of the fundraising process and should be properly done by the fundraising team.
The engagement phase
This stage is so vital for the sustainability of your nonprofit’s effort. Engagement involves building goodwill and planting the seeds for future support. In other words, you should acknowledge donors’ gifts and carry them along in your project’s journey by regularly informing them of the progress you made and the results that were reached with their donations.
An effective fundraising effort should scale from the interest phase down to the engagement stage. And every available data during the process should be analyzed to understand what to do differently when the fundraising efforts fail to yield the target result.
The importance of data in managing the performance of the fundraising team cannot be overemphasized. It’s essential you follow the step of your process, document what works and what doesn’t work, and learn.
Furthermore, set up three key performance indicators by number. For example, how many new donors do you want to bring by some standard of giving? How many donors do you want to retain by percentage? The nonprofit industry standard is 40%. Then again, how many donors have you upgraded in the retention category? So, if you retain 45%, how many times have you gone back and said Mr. Smith, what about giving us $250 this year.
The bottom line: acquisition, retention, and upgrading of KPIs are what you should consider in managing the performance of your fundraising team.
Learn More About Our Guest
Ellen Bristol is a thought leader in managing the performance of the fundraising team, to drive financial growth and consistency. She designed the Leaky Bucket Fundraising Assessment, which measures the capacity of the fundraising team to reach desired results, and the methodology Fundraising the SMART Way, to plug the “leaks” that inevitably plague fundraising efforts. Ellen is a self-proclaimed geek for performance management and a nerd for data.
More About Stephen Halasnik
Stephen Halasnik is the host of the popular, The Nonprofit MBA Podcast. The Nonprofit MBA podcast’s purpose is to help nonprofit leaders and their teams. Stephen is the Co-founder and Managing Partner of Financing Solutions, a leading provider of loans for nonprofits in the form of a Line of Credit. Stephen is a best-selling Amazon author and is considered a leading authority on building great, purpose-driven businesses.
Stephen lives in New Jersey and his top life mission is to raise his two sons, Michael and Maxwell, to be good men.