Is Your Organization Healthy? 12 Vital Reasons to Track Key Performance Indicators
Updated: Jul 31
When I ask a nonprofit if they track Key Performance Indicators (KPIs), frequently I hear, “well, I think we track a few things …”
Many nonprofit executive directors wear so many hats that measuring KPIs falls to the bottom of their list, or they aren’t sure where to start.
Tracking KPIs is critical, however. Knowing your organization’s KPIs is like knowing your own vital signs for health. Do you know your height and weight? Blood pressure? Cholesterol? What if you didn't know? Surely you have a ballpark idea of what your own vital signs are, because that helps you make day-to-day healthy decisions.
Similarly, organizational KPIs help you make the best day-to-day decisions for your nonprofit. For instance, if they show poor donor retention, should you focus on a new donor acquisition mailing? Probably not; shore up your donor retention instead. If they show strong low-level giving and major giving, but there is a mid-level donor gap, then you know which population to show some love.
“I get that KPIs are important, but I still don’t have the time …”
Most donor databases make measuring KPIs easy; just set up a dashboard and you’re good to go. If you don’t have the right software, or you need something more customized, Benezet Advisors can help; just reach out.
Furthermore, you can’t afford not to do it. Measuring KPIs helps you:
Understand your organization’s impact
Benchmark progress against other similar organizations
Make data-driven decisions
Learn where gaps exist in programming and funding
Write winning grant proposals
Report back to grant makers
Report back to donors through the annual report or other means
Provide a common language among staff, board, and all stakeholders
Determine if the strategic plan goals are being met
Increase transparency and accountability
Select the program or funding initiative that will have the best return on investment
Know when to celebrate!
Not knowing your KPIs means that you might be wasting precious time and money on programming or fundraising tactics that are ineffective.
"What should I measure?"
You can measure anything that is relevant to your nonprofit operations. Collect data going back at least 5 years to get a true sense of trendlines.
For the purposes of fund development, here are a few basic measurements we recommend:
Total giving year over year. Segment households, corporations, foundations, churches, etc. to see their year over year giving as well
Average donation size of each segment of donors
Year over year retention rate (or lapse rate) of each segment of donors
Donor acquisition rate
Donor lifetime value
Number of donors who give at each level (i.e. $100,000+, $50,000-$99,999, etc.)
Cost per dollar raised
Percentage of major donors
Number of board members who give
KPIs can also be used to measure program effectiveness. You may wish to collect information such as:
Number of clients served year over year
Demographics of your clients
Geographic reach of your clients
“Graduation” or similar outcome of each client
Quality of life improvement for each client (can be captured through surveys)
Number of volunteers year over year
Volunteer satisfaction (can be captured through surveys)
Similarly, you may wish to collect KPIs on marketing effectiveness:
E-mails opened/read/clicked
Donor e-mail conversion rate
Social media engagement
Website traffic
Brand awareness
"Can you help us get started?"
Absolutely! Data tells a story. Do you know your organization’s story - truly? Benezet Advisors can set you up with an easy-to-use Key Performance Indicator dashboard that captures any data relevant to your nonprofit. The insights you will gain might surprise you.
For help with your nonprofit’s financial sustainability, contact us today!