Adopting fundraising metrics for not-for-profit organizations

As donors and funders increase pressure on not-for-profit organizations to provide transparency and connect measures to outcomes, it can be hard to know where to start. If it's time for your organization to think about adopting fundraising metrics for not-for-profit organizations, it's important to identify supporting metrics that align with your strategic mission. When you focus on what and how to measure, you inform other aspects of your strategic planning, strengthening your stewardship and performance, and increasing your mission or ministry's impact.

Seek a balanced approach

The key is to balance financial- and performance-based outcome measures. Outcome metrics include all measures that reflect your organization's performance expressed as impact. These can include:

• Performance (e.g., program efficiency),
• Outcomes (e.g., meals served),
• Capacity (e.g., membership growth),
• Financial (e.g., budget to actual), or
• Sustainability (e.g., operating reliance).

If you report only your financial-based metrics, your potential funders won’t know whether you have been successful in your mission and in meeting your goals. Consider: Your programs and activities can grow and be hugely successful, but without organizational capacity and sustainability, the programs — and their impact — will come to an end.

Define key indicators across the spectrum to ensure that you are getting — and giving — a complete picture to key stakeholders, staff, and constituents. Your website is a great way to communicate that focus, and to ensure that both internal and external constituents have access to the information.

Set up a plan

It can be challenging to start. With your mission and a balanced approach firmly in mind — and with your leadership engaged — define the top three indicators that best reflect your progress and impact, and how you will measure and monitor them. Some of the metrics that many not-for-profit organizations have found helpful include:

Program efficiency

This metric may be the most important for many charity evaluators, board members, and donors because it shows how funds are used: For overhead, or for making progress. The basic formula …