There is one critically important factor for evaluating results from your fundraising. This single piece of information is often overlooked.
Response rate? Nope.
Gross Income? Not even close.
Return on Investment? A good guess and an important data point, but no.
Net Income? You knew that’s my favorite but it’s not most important.
Give up?
Here it is: Context.
Context? Yep. Context. Comparing results in context.
Here’s what I mean. If your last newsletter received a 5:1 ROI (you received 5 dollars for every dollar you spent) that’s a good thing, right? Maybe, but what if the same time month the previous year you had a 10:1 ROI, that 5 to 1 doesn’t look very good, does it?
Or an appeal that grossed $425,000 is good, right? Not if you spent $430,000 to get that $425,000. That’s not a good deal. Unless that is pure new donor acquisition, then that’s a good deal… right? Maybe.
50 new visitors a week to your website is terrific, right? Maybe, but what if before you did that terrific new web design, you were getting 100 new visitors a week?
Here’s where this post comes from. In the past week or so, I’ve encountered several different people using data in astoundingly bad ways. These are people who really ought to know better (and I have a sneaking suspicion that they do know better but think we don’t know better). And what lights me up is when their grand pronouncements are taken at face value without asking good questions.
For the sake of your organization and the people you serve, ask penetrating questions.
The key is always comparing data points in context.
Here are 4 simple rules for evaluating results in context. Start here and you’ll build a good foundation for evaluating your results.
1. Compare in historical context. Never look at results isolated from the previous impacts or periods. Projections are nice but projections are often fairy tales, either wishfully high or safely low. Improving on the same period from the previous year is the name of the game. Year over year improvements are the name of the game.
2. Compare the seasonal context. January is a incredibly different fundraising month than December. Comparing an impact to a previous month’s impact isn’t the way to go. The previous month’s results aren’t as important as the same month last year. More importantly, your Thanksgiving season compared year to year is better than isolating a single impact. We like to report results where we can see multiple years at a time. That gives you a better sense of the trend–are we improving or are we declining? Ideally, look at an individual impact and then look at a campaign.
3. Compare granularly. Compare by time and by impact but also compare by donor groups. How are your major donors doing compared to major donors? How is your monthly giving program doing compared to the previous year? If you don’t compare in small chunks, you’ll miss when a segment of your donor file is performing poorly. If you only examine result in big bites, what can happen is that a few large major donor gifts can mask a decline in the general file.
4. Compare more than income. So you’ve noticed that your income is down this month compared to this month last year. Check the number of gifts. More gifts or less gifts for the same period? What is happening with your average gift? One trend some organizations are seeing is a reduction in the size of gifts. Similar number of gifts with lower income totals translates into a lower average gift. Donors are giving, but for some reason they are giving fewer dollars when they give a gift.
We always enjoy conversations around data, analytics and strategy. What’s your big struggle in evaluating your fundraising efforts?
Steve Thomas
Partner, Oneicity
(photo credits: Ryan Holst)
