KPIs Not-for-Profits Should Track for Efficiency and Growth

KPIs Not-for-Profits Should Track for Efficiency and Growth

Not-for-profit organizations strive to make a positive impact, but measuring their success in today's data-driven world can be challenging. Fortunately, there is a solution: key performance indicators (KPIs). These metrics not only help track the baseline of operations but also guide organizations toward the achievement of their goals and the impact of their programs.

Setting measurable targets is key to an organization’s long-term success. Regularly evaluating progress through KPIs allows not-for-profit leaders to identify areas for improvement and empowers them with valuable data for informed decision making. This transparency also fosters accountability for both the organization and its board while also enabling agility in adapting to a changing environment.

How to Identify the Right KPIs

By selecting the right KPIs, not-for-profits can assess their effectiveness and ensure their efforts align with their mission.

Here's a breakdown of how to choose impactful KPIs:

  • Aligning with Mission and Goals: KPIs should reflect the organization's reach and the positive change it brings. This could involve tracking the number of individuals served, the quantity of resources distributed or the improvement in a specific social issue the organization addresses. Define clear calculation methods for each KPI and maintain them over time.
  • Setting SMART Objectives and Tracking Progress: Consider utilizing the SMART criteria to establish focused and achievable goals. These are:
    • Specific: Clearly define success for each goal.
    • Measurable: Ensure data is readily available to track progress.
    • Actionable: KPIs should guide concrete steps for improvement.
    • Relevant: Align KPIs with the organization's mission and strategic objectives.
    • Time-bound: Set deadlines or timeframes for achieving each goal.
  • Setting annual and monthly targets: Break down yearly goals into smaller monthly targets for focused monitoring and progress tracking. This allows for timely course correction if needed.

Important KPIs to Track

While specific KPIs will vary depending on an individual not-for-profit's mission and operations, some key metrics hold value for most organizations. Here are the top five KPIs all not-for-profits should strongly consider tracking:

1.Fundraising ROI

It’s important to track your organization’s fundraising return on investment (ROI) to understand how proficiently you are using its resources to generate donations. This metric helps you analyze which activities yield the most income compared to their expenses, helps identify aspects of your campaign that can be optimized or reduced in cost and gain insights into potentially fruitful fundraising avenues for future endeavors.

Calculating ROI is straightforward:

2.Program Efficiency Ratio

Tracking program impact gauges the effectiveness of your initiatives in addressing community needs and fostering positive change. This can be measured through a program efficiency ratio, calculated as program expenses divided by total expenses multiplied by 100.

A low ratio indicates a need to optimize program management, such as reducing overhead expenses.

3.Donor Retention Rate

This KPI measures the loyalty of your donor base. Higher retention rates are often associated with more sustainable fundraising efforts, as retaining existing donors is generally less expensive than acquiring new ones. You can calculate this by dividing the number of repeat donors in a year by the total number of donors from the previous year and multiplying by 100.

A low donor retention rate suggests your communication might not be inspiring continued giving.

4.Donor Growth Rate

Monitoring your donor base is critical to measuring your organization’s health. The best way to do this is by tracking the donor growth rate, which reflects the year-over-year change in the number of individuals giving to your organization.

Here's the formula: ((Number of donors this year - Number of donors last year) / Number of donors last year) x 100

A low or stagnant rate suggests a potential issue with your donor acquisition strategies.

5.Social Media Engagement

Engagement rates on social media platforms can indicate the organization's ability to raise awareness and build a community around its cause. It's a direct line to understanding how compelling and relevant your message is to the general public.

Social media engagement can be measured through metrics such as likes, shares, comments and new followers. Tools like Google Analytics, Facebook Insights or Twitter Analytics can provide these metrics. Additional metrics to consider in this area might encompass the increase in subscriptions to the organization's communications and email open rates.

While measuring goals, tracking metrics and analyzing numbers are valuable tools, it's also important not to forget the underlying purpose of your "why." Ensure your donors are satisfied and constituents feel valued by engaging in personal conversations and actively listening to their responses.

Connect With Us

Identifying and calculating your organization's KPIs is just the first step. Regularly monitoring these metrics over time is crucial for leveraging the insights they provide to enhance your organization. Leaders committed to this practice can empower their organization to make the strategic adjustments necessary for improving performance and impact. For more guidance on measuring your organizational goals and effectively using data, please connect with us.

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KPIs Not-for-Profits Should Track for Efficiency and Growth organizations strive to make a positive impact, but measuring their success in today's data-driven world can be challenging. 2024-03-25T17:00:00-05:00

Not-for-profit organizations strive to make a positive impact, but measuring their success in today's data-driven world can be challenging. 

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