The Top 9 KPIs for Nonprofits to Track
As a nonprofit leader or executive, you’re likely always looking for ways to improve your organization’s performance. Tracking key metrics (KPIs) is a great way to do just that.
While there are many different types of metrics that could be tracked, we’ve compiled a list of the top 10 key performance indicators (KPIs) for non-profits. Whether your organization is just starting out or you’re looking to optimize your practices, monitoring these KPIs will give you a good understanding of how your nonprofit is performing.
And while you’re in the process of making improvements to your organization’s performance, consider a membership management software like MembershipWorks, which allows non-profits to track and collect memberships and donations on their website, publish an online member directory, host a job bank, sell event tickets and more.
What are KPIs for Nonprofits?
KPI stands for key performance indicator. In simple terms, KPIs are quantifiable metrics that help organizations evaluate their progress throughout the year (or set number of years) and assess how close they are to achieving their goals.
There are dozens of different KPIs you can track, from high-level KPIs that hone in on your non-profit’s general progress, to low-level KPIs that certain departments or even team members can set for themselves as a benchmark for their work.
For nonprofits, KPIs can generally be split into the following categories: fundraising KPIs, marketing and communications KPIs, program delivery KPIs, human resources KPIs, and financial KPIs.
Why do KPIs matter?
Well-defined KPIs can mean the difference between achieving one’s organizational goals and falling short of what you need to accomplish to become the kind of non-profit you want to be.
1. KPIs are like a roadmap to success
KPIs help non-profits monitor whether their organization is headed for the right going in the right direction. And if you aren’t, KPIs can serve as a guide for where you need to steer.
2. KPIs help non-profits adjust to internal and external changes
Change is inevitable, whether we’re talking about your timeline changes, new laws and regulations, board turnover, staff departures, or even unprecedented global events such as the COVID-19 pandemic. But with KPIs in place, you can tackle internal and external changes with less fanfare.
3. KPIs aid in decision-making
Tracking KPIs means you have a wellspring of data. And today, data drives decisions – especially now that we still face so much uncertainty thanks to COVID. According to Forbes, “Data-driven decisions went from being a priority goal to absolutely necessary in order to survive the unplanned and significant changes to the business environment.”
How to identify your non-profit’s KPIs
Every non-profit is different, so the process of coming up with the right KPIs will always be different. But in general, these steps should help you determine your non-profit’s KPIs:
Follow the SMART framework
When identifying your KPIs, use the SMART framework; that means setting:
- Relevant and
- Time-bound goals.
Specific goals are actionable goals. Review your organization’s objectives and mission. What is it that you want to accomplish as a non-profit? Your KPIs should help you attain those goals.
Measurable goals are quantifiable goals, such as your fundraising ROI for the year, the amount of money donated through an email campaign, your progress toward a capital campaign, or the number of sustaining members you brought in.
Assignable goals are goals that can be tasked to specific people who will act upon them and measure them. All your goals and KPIs must be assigned to a person or a group of people who can execute actions to accomplish your goals.
Relevant goals mean goals that are relevant both to you as an organization (What is your purpose? What is your why?) and to the times. Observe what other similar non-profits are doing and aiming for and see if they could be relevant to you.
Having time-bound goals and KPIs means setting a deadline for when you must meet your objectives. Once you have a deadline, you can build timelines and come up with a framework that fits into your schedule.
Take a look at your past and present performance
How have you progressed as a non-profit since you started? How are you faring now? Measuring your past and current performance can help you get a baseline of your performance as a whole, and provide you with a better sense of which aspects of your organization need to be improved.
Discuss your KPIs with your team
Remember, goals and KPIs must be assignable. Presidents or CEO of non-profits cannot be expected to take action on and monitor every single KPI. Go over each KPI with your team so you can set expectations with staff, your board or key volunteers. You can allow them to create actionable steps towards meeting the goals or build the task list together.
In summary, you want your KPIs to be specific, actionable, quantifiable, assignable, relevant and time-bound. You’ll want to review your past performance to understand which aspects of your organization need to be improved upon and which areas are your strong suits. And finally, you’ll want to loop everyone in to make sure that you and your team are all on the same page and have clear directives moving forward to attaining your goals.
How Often Should You Review Your KPIs?
While the rate at which a non-profit should review their KPIs is an individual choice, generally, most organizations will do their reviews every month or every quarter. It’s also important to set a year-end review.
How do You Make Sense of Your Data?
There is no point in setting KPIs if you don’t know how to effectively measure, track, and use them to your advantage. Here are some tips on monitoring and measuring your data:
Measuring and tracking KPIs
Measuring KPIs boils down to capturing relevant data and turning it into metrics that you can monitor, whether in a dashboard or some type of chart.
You can find tons of data tracking tools online, from the simple and readily-available Excel or Google Sheets to specific KPI dashboard software. Tools don’t always come free, but they can save you a lot of time and money from manual data entry. Your fundraising or membership software may have a dashboard where you can pull reports or quickly see information at a glance.
Utilizing your data
Beyond data collection, you’ll want to contextualize your metrics, comparing them to data from past performances or the progress of other similar organizations. This will help you get a better assessment of the amount and kinds of improvements that need to be made, as well as the specific areas that need to be further optimized or even eliminated. Places to turn to for gathering information on other nonprofits include:
- Your national organization if you are a chapter of a larger entity
- Sister organizations of yours in other locations
- ProPublica’s Nonprofit Explorer, which offers an online database where you can search and “…view summaries of 3 million tax returns from tax-exempt organizations and see financial details such as their executive compensation and revenue and expenses.”
- The National Center for Charitable Statistics has reports such as one produced by Mastercard which “Includes information on donation index amount, number of donations, average donation size, year-to-year growth, and more for both the total nonprofit sector and sub-types.”
- A local nonprofit hub such as the United Way.
- An organization in your area similar to Mission Capital. In addition to data and best practice information, these types of groups often provide support, board training and foster connections between nonprofits.
- A university in your state that collects data about nonprofits to generate reports and studies.
Top 9 KPIs for Nonprofits
Now that you know what KPIs are and how to make use of them, let’s take a look at some of the most important KPIs that every non-profit organization should be tracking.
1. Donor and donation growth
The donation growth rate measures how much revenue you gain from donations year-over-year. Donor growth rate, on the other hand, measures how many donors you gain month-over-month. This data lets you see how effective your donor outreach and fundraising programs are working.
((# of the most recent year’s donors – # of prior year’s donors) / # of prior year’s donors) × 100 = Donor Growth Rate
(($ total of the most recent year’s donations – $ total of prior year’s donations) / $ total of prior year’s donations) × 100 = Donation Growth Rate
2. Fundraising ROI
Fundraising doesn’t come cheap, so you have to make sure you’re making back the money you’ve spent. By tracking your fundraising ROI, you can get a better understanding of which types of events or campaigns are costlier than others, which elements of your events can be slashed, and what other avenues you may consider pursuing in future efforts.
The calculation of fundraising ROI is simple — key data points are the income brought in from each fundraising effort and the amount of money that was spent to execute each event or campaign.
((Fundraiser income – fundraiser expense) / fundraiser expense ) x 100 = Fundraiser ROI
$100,000 (fundraising event income) – $60,000 (event expense) = $40,000
$40,000 / $60,000 = .667
.667 x 100 = 66.7% ROI
If you want to include staff time in the calculation, assign an hourly rate to each staff person (based upon the annual cost of their salary and benefits divided by the number of hours they work during a given year) and then multiply that rate times the number of hours each person spent on the effort. Coming up with the hours spent on a given project could involve actual time tracking by staff or simply asking staff to estimate hours or the number of days they spent working toward each fundraising activity. Staff time is important to consider as some of your bigger fundraising events may bring in a good amount of money, but it may take months of staff planning and preparation.
3. Donation conversions by channel
It’s important to know where your donations are coming from – whether through social media appeals, email campaigns, referrals, organic efforts, advertisements, etc. With this data, you can pinpoint which channels are more effective than others, whether you need to improve on your strategies and calls to action, and which channels your target markets respond the most with.
This metric can be measured by dividing the total number of donors who made a gift through a certain channel by the total number of donors reached by the call to action (CTA). Then multiply this number by 100.
4. Website page views
This reflects the number of times people visited a page on your site. The higher your page views, the higher the likelihood that people will click on a CTA. This is a marketing metric that tells you how effective your content marketing and social media efforts have been at making your site more visible.
5. Landing page conversion rate
Aside from tracking website page views, you should also be tracking the landing page conversion rate, or the rate at which site visitors click through on your CTA and actually make a donation. This metric will tell you whether the CTA is effective enough to get people to take action, as well as whether the process of making a donation is easy and intuitive. Measuring this requires two data points — the number of visits to the donation landing page and the number of hits on the success page a donor reaches after donating online. The latter number can also be found by simply checking for the number — not dollar amount — of donations collected through the donation form.
6. Beneficiary satisfaction rate
A KPI more commonly used by for-profit organizations, this metric helps non-profits assess their beneficiaries’ satisfaction. This is more a qualitative metric than a quantitative one, and can be gathered with surveys or questionnaires distributed at the end of programs.
7. Employee retention rate
This is a measure of how long an employee stays at a non-profit before they leave. This is measured in either months, quarters, or years. The employee retention rate can give you an idea of how satisfied your employees are with working for your non-profit.
Employee retention rate is important because high turnover rates can result in higher costs; recruitment can take up a lot of time and money.
8. Absenteeism rate
This is a measure of how often employees take time off, whether due to illness or personal business. This metric does not include paid vacation leaves.
This KPI is important because it is indicative of employee engagement. The more engaged and motivated an employee is, the less inclined they are to miss days of work.
9. Year-over-year growth
This is the measurement of your increase in revenue in one year in comparison to the previous year. Year-over-year growth is calculated in percentages.
With KPIs, you can identify how your nonprofit stacks up against the competition and see where there are opportunities for improvement. By identifying what metrics are most important to your organization, you will be able to better allocate time, money and resources in order to achieve success.
KPIs for Nonprofits FAQs
- How to calculate fundraising ROI?
Calculating for your fundraising ROI requires knowing your total costs and your total funds raised.((Fundraising income – fundraising expenses) / fundraising expenses ) x 100 = Fundraising ROI
- Why is it important to track nonprofit fundraising metrics?
Tracking fundraising metrics allows you to make data-driven decisions, resulting in fewer risks taken and less money wasted. Nonprofit boards of directors are also impressed by these types of statistics.
- How to calculate average gift size?
To calculate average gift size, you divide your donation revenue by the number of gifts you received.