How DO You Know You’ve Been Successful This Year?
PS: Board Member Opinions Don’t Count.
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Leaders, managers and directors of nonprofit organizations need to know how successful they’ve been at the end of the year so they can plan wisely for next year. Yet our research shows:
- Only 65.5% of nonprofits track total income compared to goal.
- Only 49.5% of nonprofits track income by funding stream to goal for that stream.
- And 83.6% FAIL to have documented ideal-donor profiles including giving motivations.
Even though the data stem from pre-pandemic research, they still tell an alarming story. They suggest too many nonprofits base decision-making on gut feel and anecdotes, rather than data.
You can assess your organization’s ability to manage fundraising using appropriate data, practices, and reporting tools with our new Leaky Bucket Professional Edition.
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Failure to track progress against plan regularly means leadership doesn’t know the “brutal facts,” and can’t correct course when results are undesirable.
Lack of ideal-donor, ideal-corporate sponsor, ideal-grant-maker, even ideal-board-member profiles leave the fundraising team (and the nominating committee) shooting in the dark. There are other risks as well.
Relying on anecdotes and amount of money in the door (a trailing indicator) will leave you and your team unclear about how you did last year – and even more important, how you’re doing right now. How? By establishing key performance indicators and tracking performance against them regularly.
There’s no question in my mind that a great nonprofit organization achieves measurable impact. To do so, you also need disciplines that keep your team accountable – to the overall mission, and to raising sufficient money to keep things moving in the right direction.
So how do you know if you’ve been successful this year? Leaders who lack such metrics and guidelines risk losing significant income, and might not even know it.
One of our clients, the director of a mid-sized development team, put it this way. “When we stand before the governing board, we can only share anecdotes about our progress. Invariably, this turns a positive conversation into a negative one.” No leader wants an angry, dissatisfied board.
The CEO of a major organization, with 350 people in the fundraising team to raise their multi-billion dollar income, told us this: “We track our progress relentlessly throughout the year, emphasizing metrics about things we need to do early in the cycle, the leading indicators. We’re dedicated to our mission, and we always know where we stand, so our staff AND our board are eager advocates.”
Regardless of your nonprofit’s size, sector or mission, the risk to the organization’s sustainability, even its survival, relies on leadership’s ability to know what’s happening now, not just what happened last year. In other words, accurate, meaningful reports comparing progress to goal, and the ability to interpret those reports, suggest improvement initiatives, or correct course where needed.
Here’s the challenge. Raising money is all about numbers – so many numbers that it’s all too easy to collect data by the bucketful. But is it the right data? Does it tell you what you really need to know? And can you get that data easily, regularly, and in formats that actually tell you something?
Raising enough money to achieve impact, pay staff a competitive wage, keep a healthy level of cash reserves, and so on is not a matter of luck. It’s a matter of great management.
Assess the effectiveness of your fundraising management to see how well you succeeded last year. Your subscription will let you track your improvements throughout the year.
Learn more about the Leaky Bucket Fundraising Management Assessment, Professional Edition by clicking below.
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