It’s the end of the year as you know it: Make your reporting fine

Part of my job at MarketSmart’s Fundraising Report Card is getting on the phone and talking with nonprofit professionals. Now that I think about it, most of my job is actually doing that.

In talking with a variety of development directors, gift officers, board members, and everyone in between, I’ve developed a clearer perspective of how our industry functions. Regardless of size or savvy, most organizations struggle with a few common things:

  • Not having enough time
  • Not having enough resources
  • Not feeling confident working with data

Those are the three themes that I come across most frequently. Sure, my perspective is a bit biased — as Director of Fundraising Report Card, most all of my conversations ultimately relate to fundraising metrics and data analytics. Even so, these three complaints ring true no matter the size, sophistication, or stature of an organization.

I’ve written in the past about ways to alleviate each of these three issues — covering simple fundraising metrics, the mindset for fundraising success, and how to be a data-driven nonprofit. Let’s look at building confidence around data reporting as it relates to end-of-year reporting.

How do I report end-of-the-year figures?

By now your end-of-year fundraising plan is most likely ramping up. If your organization is anything like the hundreds that I’ve talked to in the past weeks, that means you’re swamped. It also means your leadership (or board) are more interested than ever in your performance — aka, your fundraising metrics. Nearly everyone I talk to tells me a story about their one board member who is a “data nerd” and requires them to make pivot tables in Excel reporting on lapsed donor renewal rates in the second quarter of FY 16.

This is undoubtedly a hard task, especially when you aren’t particularly comfortable with data to begin with. Combined, spreadsheet functions, pressure from a board member, and not feeling confident don’t mix well are like eating a grape right after brushing your teeth: The thought leaves a bad taste in your mouth.

So how can we persevere in this situation? We can follow these simple steps:

  1. Identify your key performance indicators (KPIs)
  2. Use technology (Excel, Fundraising Report Card, etc.) to help with some of the calculations
  3. Prepare your presentation in a compelling and meaningful way

Ready? Let’s go.

What are our KPIs?

Fundraising KPIs will vary by organization. If you work at a humane society, one of your KPIs may be the percentage of adopters that became donors; you set annual goals to increase that percentage. This KPI makes sense for a humane society, but it won’t work for a research institution.

Domain specific KPIs aside, there are a few high level — and more general — fundraising performance indicators that your board will be excited to see. Let’s cover two.

  • Donation frequency
  • Average donation amount

Donation frequency may be a metric you have never heard of, and with relatively good reason, it’s a bit difficult to calculate by hand. It is a measure of how many contributions your donors make on average to your organization over the course of a given period of time.

 

Let’s get a little more concrete: In Fundraising Report Card, we calculate donation frequency on a 12-month (one year) basis. Each year you can see your donation frequency plotted on a line chart.

Why is this useful and what purpose does it serve? Donation frequency tells a story (as do all metrics). Considering the trends in giving that our industry is experiencing, it’s a particularly compelling one. Imagine for a moment if your organization only received one donation from all of your donors during the course of a year. Your donation frequency would be one. The average donor makes one donation during the year.

Now, imagine you’ve implemented a monthly giving program. Half of your donors now make 12 donations during the year, the other half still make one. Your donation frequency (irrelevant of dollar amount) has increased from one to six, a 600% increase.

When paired with our other key fundraising metric of average donation amount, we begin to piece together the growth of our organization (and some of the potential underlying trends for why it is growing or contracting).

Donation frequency and average donation amount

Let’s expand on our monthly giving example from above. If your average donation amount has decreased from $50 to $15, you may initially be disappointed. But, when paired with the fact that donation frequency has increased to six times during the year, you start to see the bright side of monthly giving.

Six $15 gifts totals $90. One $50 gift equals, well, $50. $90 is greater than $50. Your board will be ecstatic.

Obviously, your numbers will not look identical to the example above (you may not have implemented a monthly giving program), but the exercise of looking at and reporting these metrics will highlight natural trends in your donors’ behaviors. These trends may not have been on your radar, and this could spark a compelling conversation internally. Plus, these two metrics — donation frequency and average donation amount — are two of the three metrics needed to calculate donor lifetime value, one of the most important fundraising metrics we can get our hands on.

Getting comfortable with donation frequency and average donation amount will pay off dividends in the long run in terms of getting comfortable with lifetime value. This will also provide an interesting context for strategy and planning right now. With these two metrics we are getting a bit deeper than “total donor count,” and “total dollars raised”: We’re showing the board that we’re a bit more sophisticated and “data-driven,” which is a great thing.

Okay, at this point you must be thinking, “this sounds great, but it also sounds like a bunch of new work that I don’t have time to do.” Which leads us to…

What tools can I use to do this?

The last thing I want to do is create more work for you during the busiest (and most hectic) time of the fundraising calendar. That would just be mean. Instead, let me refer you to a few tools that you have at your disposal.

  • Excel: Old faithful (is Excel faithful? Sometimes I think it is out to make my life miserable, you be the judge). You can calculate donation frequency and average donation amount in Excel; you’ll simply need an export of all donation transactions from your database or CRM. Follow these instructions for the equations for donation frequency and average donation amount.
  • Fundraising Report Card. New faithful? Fundraising Report Card is a new-school analytics and visualization tool at your fingertips. Create an account with an email address and password (you’ll need a Pro account for donation frequency), then upload anonymous donor data from your database or CRM and go to the Key Performance Indicator page. You’ll see donation frequency and average donation amount. There’s not much more to it. Drag and drop and you’re done. Check it out.
  • Your Existing CRM: How could we forget that your existing CRM or database may already have these metrics calculated for you? Call up tech support (if they have a number) and ask. It doesn’t hurt since you’re already invested in the software. Fingers crossed that they do.

Let’s say at this point we have our two metrics calculated. What next?

How to share and present your KPI metrics

Visual. Keep it simple. Interactive. No tables. Okay, some tables, but not just tables. People like visuals.

If you have five minutes to present your fundraising metrics to the board keep these two thoughts in mind:

  • Don’t make them think
  • Keep it simple

When presenting data, or more likely data visualization (a line chart) to anyone, you should strive to help them make the connection you are trying to present as quickly and easily as possible. What do I mean by that? Your chart should be obvious. Is donation frequency going up and to the right? Yes, got it. Our donors are donating more times during the year. Don’t plot donation frequency as a tree map with multiple colors and child nodes. That would confuse everyone.

How can you accomplish this? Use Fundraising Report Card and simply save images of your KPI metrics. Or, if you don’t want to use the Report Card, use Excel charts and just promise you’ll keep them simple.

Finally, when you do present these metrics, make sure you are ready to help shape the story you’re trying to tell. Data and data visualization are conversation starters, they help our brains interpret information more easily and effectively. With that in mind, be prepared to answer questions and guide a conversation relating to how these metrics work together (remember the monthly giving example from above) and how you can measure them in the future to gauge progress and success.

Applying this at your shop

If you’ve made it this far, it’s my hope you’ve learned a thing or two. Data shouldn’t be difficult or intimidating, and it won’t be hard to appease your one or two board members who want to look “under the hood.”

The end of the year is busy and hectic, but with new tools and a better understanding of two key fundraising metrics, you now have a plan for making this end-of-year a bit different. You can even make it a little, should we say, data-driven.

Good luck!

Zach Shefska is an entrepreneur and data analytics nerd from Annapolis, Maryland. As Director of the Fundraising Report Card, he helps nonprofits harness the power of their data to better carry out their mission. You can connect with him on Twitter or on Shefska.com