Stand-In Metrics

Stand in Metrics

I hear it everywhere in fundraising.  “What are the metrics?”  “How are we performing against the metrics?”

Measurement is good.  Even essential.

The trick is to measure the RIGHT things.

What is “right”?

I’ll take that as the measuring stick that says your fundraising is growing from year to year and is coming from sustainable sources.

Let’s look at that that excludes, First, cash received in the last reporting period.  That tells you where you’ve been.  It’s important to those who must pay the bills.  It says NOTHING about where you’re going.

Second is the level of activity.  Calls, visits, letters, solicitations, events.  This one is a bit trickier.  Because activity is necessary to get results—any results.  But still, measuring activity, tells you nothing about productivity.

Third is the amount you’re spending.  The conventional wisdom is to spend the least possible.  That’s wrong-headed because it assumes that spending on your fundraising program is an expense.  It’s not.  It’s an investment.

So what ARE the Right things?

Think donor retention, average gift size growth and gift upgrade rates.  Drill down on return on investment (ROI) realizing that the direct face-to-face solicitations to renew donors cost on average 20 cents on the dollar versus the blowout event that everyone loves which costs 75 cents on the dollar.

It doesn’t take much to realize that a fundraising program which costs $10,000 per year but has a cost of 20 cents on the dollar gives you $50,000 useable funds whereas the program that you spend $5,000 on with a cost of 50 cents on the dollar nets you $10,000.  Think spending the extra five grand is worth it?

Yes, use metrics.  They’re essential.  But choose the ones that matter, not the stand-ins.

Principle 8 of The Eight Principles™ is Invest, Integrate & Evaluate™.  Invest wisely, invest enough, coordinate your efforts and always be looking to improve.

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