Pointing at Chart
Editor's Note: This is the third in a seven-part series on how to build your advisory services for non-profit organizations. Here, Altruist Partners'Donald Summers shares eight battled tested practices used by innovative, high performing non-profits.
Time to tell the hard truth: Fewer than 1 percent of nonprofit development offices measure the right things. And their orgs are suffering serious opportunity costs as a result.
Why? One reason is this: Current "best practices" in the fundraising field are deeply flawed. Fundraising schools and "experts" teach development officers the wrong things.
They aren't bad people. In fact, they're lovely people. But they need to reach across the aisle and study the practices from the highest-growth, highest-impact organizations.
And they're overwhelmingly in the private sector. Let's dig in. Whenever we read articles about fundraising analytics, typically we see recommendations to measure things like:
- Donor attrition
- Second gift conversion
- Consecutive years of giving
- Lapsed donors
Guess what? If this was a private sector business, and the sales manager recommended this set of metrics to a competent CEO, she would be out of a job pretty quick. We’re not saying this to be rude.
It's the truth. Why? Because these are all weak measures. In the analytics world, the label for them is lagging indicators. This means that, by the time you've measured these things, the interaction with donors already is in the past.
These measures look backward. They provide fundraising teams with little to no data to guide and improve their daily interactions with donors. They don't look closely at the progression of the relationship with donors. And they use such large time frames, there is no feedback loop.
What is better? First, fundraising teams around the world need to sit down and read The Four Disciplines of Execution, and learn about leading indicators.
Leading indicators are measures of the actions people take now to get to a particular goal. And when it comes to raising money, there is only one leading indicator that really counts: The number of authentic, face-to-face conversations fundraisers have with donors over a given time period.
Fundraisers must have clear protocols for what constitutes face-to-face conversations, and focused, frequently updated scorecards that measure the number and quality of these conversations.
The scorecards should contain metrics from a sales pipeline such as acquisition rates and conversion rates from suspect to prospect and from prospect to donor.
Finally, it will build in robust metrics for stewardship to make sure that current donors see where their money goes.
When these scorecards are in place, fundraising teams – relationship officers, directors, CEOs and board members – get together every two weeks and read the numbers, both as a group and individually.
They ask focused questions:
- How many face-to-face conversations are happening?
- How many could be happening if we are working at full capacity?
- How are prospects progressing through the pipeline?
- What are our exact measurements regarding the identification, cultivation, solicitation, and stewardship of our donors?
- Is one fundraiser converting 30 percent and another 50 percent?
- What can we learn?
- What goals do we set for the next two weeks to move the numbers in a better direction?
Analytics don't stop there. The fundraising teams will only fulfill a fraction of their potential unless they have programmatic analytics as well. A culture and practice of concise, accurate, powerful analysis needs to rule – not just over the fundraising function, but over all the program and operational domains as well.
Many of the most beautiful people in the world lead and advocate for nonprofits. We want to see the true potential of these wonderful folks unleashed with the very best practices and tools.
We are terribly frustrated that there continues to be so much noise and misdirection out there, so please pardon us if we raise our voices a notch or two.
Donald Summers, founder and managing director of Altruist Partners LLC, is a speaker, author, social entrepreneur and management consultant with a long track record of catalyzing dramatic gains in impact, growth and performance. His clients influence state, federal and international laws and regulations, and are regularly featured in major media outlets such as The New York Times and "60 Minutes." In addition, his essays, articles and commentary have been published by the American Academy of Arts and Sciences, the Chronicle of Higher Education and Harvard Magazine.