As a worthy organization seeking to make the lives of others better, you’re laser focused on delivering your mission.
This year.
Next year.
The year after.
And that’s as it should be.
Regardless of what you do or who you do it for, one thing remains constant for ALL nonprofit organizations.
Never forget that to be successful in the delivery of that mission—long term successful—you MUST have a growing, sustained cash flow.
So how do you achieve this? Let’s look at the matter of metrics.
Being focused on the right fundraising metrics is essential to know the actual health of you program. Without that you have no way of knowing where you’re headed—until it’s too late.
One of the most common, and perhaps the most meaningless, metrics in gauging your fundraising “success” is cash raised in a given time period.
How many of you have sat through a board or staff meeting when the question was asked of the fundraiser—”how much cash did we raise in the last quarter?” Or “What did we raise at the (gala, fete, auction, etc.)?”
That number is totally worthless as a fundraising predictor.
Not that raising cash is bad.
It’s just in no way predictive. It’s an accounting number, preferably included in the CFO’s report. After they’re the one that actually counts the money.
What’s the adage: “Past performance is in no way a predictor of future performance”?
Let’s look at a metric that does predict. Your first-year renewal rate.
That’s the percentage of first-time donors who make another gift to you next year. Spoiler alert: We’re talking donor-initiated gifts not monthly giving programs.
Your first-year renewal rate is perhaps the most telling of all fundraising metrics.
Without a healthy first year renewal rate, you’re churning donors who are giving entry-level—even token gifts—while burning precious fundraising program dollars.
When you have a healthy rate (think north of 60%) your cost to raise a dollar goes down even as your actual revenue goes up. Way up. Think three and four times up.
To grow your ability to serve those you serve You must grow your income. You must raise your renewal rate.
Without growing cash, all the good intentions in the world won’t make a twit of difference.
Do you know what yours is?
If it’s south of 45%, you’re in serious churning country. And here’s the real kicker—although there is MORE than enough money to fuel your mission, there are a limited number of donors who will support you. Once you’ve churned those, you’ve consigned yourself to flat returns—or less.
Far too many well-motivated leaders are simply running in place even as the treadmill ever increases its speed.
How do you fix this? By building a program of strategic relational fundraising which brings your investors closer to your organization emotionally. We call that The Eight Principles Way™.
Let us show you how to create the path for donors that yields truly transformational giving. Set up a time to chat today. We’ll listen.
Once in place, you’ll see your renewal rate and your income grow each year. Your donors will love you for it.
If you’d like us to help you create a winning fundraising culture, let me know. I’ll point you in the right direction.
