Understanding and evaluating the effectiveness of your fundraising efforts is crucial for maintaining transparency and accountability to your supporters and other ministry stakeholders. By systematically evaluating and sharing the impact of your fundraising activities, you can build stronger relationships with your supporters and continually improve your fundraising strategies.
Now, let’s get started on this activity to measure and enhance the impact of your fundraising efforts.
Measuring the impact of fundraising activities is crucial for being transparent and accountable to supporters and other ministry stakeholders.
A good starting point is to run the ROI report for every fundraising activity to learn what has worked and what hasn’t. You can begin to ask the ‘why’ questions too by talking to others involved in the activity and find room for improvement.
Once you have evaluated your fundraising activities share key findings with your team and your supporters. Be transparent about how the donors’ money was used.
Use your annual impact report to share successes, challenges, and the tangible impact of their gifts.
1. Return on Investment on all fundraising activities: Return on Investment or ROI as it is commonly known is calculated by using this formula:
ROI = Total Income/Total Expenses
(If your result is greater than one, it indicates that you have successfully managed to raise funds. The higher the number, the more successful you have been in your efforts.)
2. Return on Investment on specific fundraising activities: You can calculate the ROI’s of specific activities and initiatives using the ROI excel spreadsheet provided.
You can get insights on how supporters engaged with your appeals, how much they gave, what appeals, or other comms performed better than others, what are the average gift amounts per activity etc.
3. Donor Retention Rates: This is important to measure because it shows how many donors from the previous year gave again in the current year. You can calculate it using this formula:
(Donors returning on year 2/ Donors who gave in previous year) x 100 = Retention Rate
The higher the percentage of donors returning/ giving again the better.
4. New Donor Conversion Rates: This metric is great way to measure the success of donor acquisition efforts, particularly if you have tried out new fundraising tactics. It will give you a clearer picture of whether you have persuaded new people to join your cause. To calculate it use this formula:
(No. of new donors /No. of people you reached out to) x100 = Conversion Rate
Download the ROI template