Generosity - Learning to Analyze in a
As we have recently completed the giving season for most U.S. nonprofits, it is important to stop and look at the response from our donors. How did your donors support your cause this past September through December? Did you look only at total dollars given? Or just net income as compared to last year? One of the problems we have in development is we let other departments, finance, or board members evaluate our strategies and results. We in development must learn how to examine our strategies and relationships and teach our organizations how to look at development.
First, consider the gross dollar amounts of gifts given. You must look at the TOTAL dollars received as that is what your donors and partners have given, not the net. The net demonstrates how well we have managed the strategy. Many financial or businessminded board members will insist on reporting the net amount, as they interpret the impact on the bottom line. That is fine, but it is not the true measure of our donor's generosity. The gross gifts given reflect the total generosity of your donor base.
Then consider the number of gifts given. The number of gifts allows us to compare to the previous year. Are there more gifts and more dollars? Are there less numbers of gifts but greater dollars given? This shows you may have lost some donors. But it also shows the donors who are giving are more committed by giving larger gifts.
Next consider dollar amount of gifts given this year compared to last year. An increase in major donors can be a healthy growth statistic even in a year where total giving is down. Are you trying to even out your donor giving to not depend as heavily on impulse or grass roots giving? Find the details in specific segments as compared to the previous year.
Then compared dollars GIVEN to budget. Sometimes when our expense budget is increased and we come up short, we assume it was a bad year in giving. What if giving was up over the previous year by 4%, but your expense budget went up 8%? To the board and others it may seem you failed to reach your goals, but it is also true that development giving increased in a difficult year. Your donors are to be thanked rather than admonished for not reaching the budget.
Your analysis should also look at the ROI of development expenses compared to total gifts given. You must look at the total return on investment by the ratio of dollars spent to raise dollars as compared to total dollars given. Each individual strategy will have a different ROI. A direct mail gift is much MORE expensive to produce than a major donor gift. But when all strategies are combined, the overall ROI is a much better measurement than just measuring strategy to strategy.
Look at average gift by source compared to last year as well. Has your average gift for direct mail gone up, down, or stayed the same? What about your average gift at the banquet? Each strategy produces an average gift. These should be looked at separately as they can effect strategy adjustments for this year.
Finally, look at 35 year trends rather than just compared to a low year. Giving goes up and sometimes down. The longterm perspective is much healthier to consider than just one year of difficult cultural and economic trends. Help educate your leadership to see your cause and ministry as one that is here for the long haul. Work on your infrastructure and not just react to one down year.
Learning to analyze giving results is good for you to know as the leader of development. And it is important for your organization to trust you as you assess and adjust strategy from a base of knowledge, not just assumptions.
Have a great year,
Dr. John R. Frank, CFRE
Author, Teacher, Consultant