Every organization and really every individual has its most important numbers. You know you need these. I wanted to spend some time talking about this here since at Oneicity, we’re rolling into the season where we’re reviewing client results for 2012.
And here’s where I just have to admit to failing. I’ve been drafting on this post for a several days and at about the 1,500 word mark I’m realizing that there’s no way I can say what I want to say about metrics and measures in this blog. It’s just too big and/or I’m not good enough to explain such a complex topic to our diverse tribe.
So. First, I’ll just admit failing (if you’ve been reading the blog you’ve seen me fail before).
And then I’ll say this about metrics:
You have to measure. If you aren’t measuring key metrics you are failing. You have to choose your key metrics. You can’t watch everything.
Net income is always a great measure. Net income is one of the best single metrics you can monitor for your nonprofit or ministry.
Metrics are helpful only in context. You can watch your metrics month to month (January compared to February) but most importantly you must monitor your key metrics “year over year” — comparing this January to other Januaries; this 4th quarter to last year’s 4th quarter, etc.
You must measure Return on Investment (ROI) or response rates for impacts, events and development efforts.
And you have to have some kind of file health metric. This is where I got completely bogged down (I almost wrote “blogged down” Ha!) trying to explain. These are the crucial measures of what’s happening inside your organization in terms of donor behavior. And this is where complexity got me. We have such a diverse audience, I couldn’t explain it for everyone.
So, let me explain it this way. In addition to broader metrics or measures you have to have a granular look at what happening inside your donor file. You have to have some measures like “gifts per donor” and “income per donor” but reported by giving pattern not for your entire donor file.
Bottomline: You need to know how donors are responding based on their giving history. How are major donors doing this year compared to last year? How are donors who give at the $25 level responding compared to donors that have the same giving pattern last year? This kind of analysis gives you a picture of what’s happening inside your donor file . . . and more importantly, it gives you a view into how your donors are responding to your message.
Whew. That was tough. If you have questions about metrics, measuring and donor file analysis, ask ‘em. I’m happy to take a stab at answering a question since I couldn’t explain what I was thinking without writing War and Peace.
So give me your questions and I’ll do my best to answer. What do you think?
(photo credit: Franganillo)