Jessie-Lee Wallace

Jessie-Lee Wallace

Fundraiser. Blue sky thinker. Whole hearted. Coffee drinker. Committed to charities that make our world better.

What I Wish I Knew Starting Out In Fundraising, Or: How To Analyze Direct Mail Results

January 23, 2017

When I first started working at a charity, Excel spreadsheets caused me to break out into a cold sweat. I will also say that math was not my favourite subject in school. However, I wanted to know how my efforts were helping my charity’s bottom line, especially while working in a small shop with limited resources. But at first, I was unsure even how to begin…

Here are a few things I would have loved to know then.

Before you get into the nitty gritty of data analysis, ask yourself this question (and even before that, yes you do have time for analysis!): What is my (and my charity’s) fundraising program’s goal?

Here are a few possible answers…

  • to stabilize the program growth (no more than 2-4 % increase)
  • to aggressively increase gross revenue
  • to acquire as many new donors as possible ( direct mail, online, monthly)
  • to increase retention rates of all donors

Depending on how you answer the above question, you will be looking for very different results to see if you are on track and your definition of success will be vastly different.

Stability

Perhaps your charity’s development program has taken some hard knocks recently. Overall revenue is down, or it has been in decline. Maybe there was a staff vacancy for a little while, or a lean budget year and not much money to invest in development. To keep the ship afloat, you need to plug the holes and focus on consistency!  When analyzing results, you would know if you are succeeding when you see a good return on investment (ROI), a reasonable Cost Per Dollar Raised, as well as a stable average gift, and a solid response rate.

Revenue growth

If you are looking to grow your gross revenue aggressively, you are in need of significant investment. To do this, your return on investment might decrease in the short term. Your number of solicitations (the number of donors you are sending to) would increase, and your overall gross revenue would increase however your costs would be much higher, and your ROI much lower. You would be looking at ways to increase your average gift size as well as the number of gifts.

Get more donors

In other words, house file growth.  If you are looking to get as many new donors as possible, your results may look a lot like you are shovelling money out the window — a sort of short term pain for long term gain! Acquiring new donors is very expensive but completely necessary. It often costs as much as 9 times more to get new donors, as opposed to just thanking, stewarding and then consistently soliciting existing donors.

Increase the number of donors you keep:

For these purposes, look at how many new donors you are acquiring but also how many long lapsed (2-3 years since the last gift) or near lapsing donors (18 months to 2 years since the last gift) you are reactivating (getting to give again). Keep in mind that every charity is different and one charity’s lapsed donor (18 months since the last gift) may be another charity’s current donor, depending on giving habits. The industry standard for donor retention (how many donors give again from year to year) is around 60% depending on your type of charity. If you are not sure what your retention rate is, put that at the top of your list to find out

 In fact, I highly recommend you look at the Association of Fundraising Professionals’ (AFP) Fundraising Effectiveness Project (FEP). All the tools and resources you need are available to see how healthy your development program is right now. Check it out right hereand it’s free!


Quick Calculations

How to calculate ROI

This calculation will tell you the effectiveness of every dollar you spent on a campaign.
The formula for calculate ROI on fundraising

How to calculate Cost per dollar expenses

This calculation will help to tell you how efficient your program is.
How to calculate Cost Per Dollar Raised


A couple of last things to consider

Data Pulls and Extraction

Whatever you decide to measure, be consistent. Document it! Ensure you are pulling reports and queries in the exact same way, each and every time. Sometimes, it is hard to analyze how donors are responding to your program if your appeal and campaign coding is inconsistent.

 Benchmarking

Don’t be afraid to pick up the phone and benchmark response rates, and other metrics with other like–sized and mission-based organizations. Sometimes that is more educational than any industry report.

One thought on “What I Wish I Knew Starting Out In Fundraising, Or: How To Analyze Direct Mail Results

  1. Well we’ve been in the fundraising industry and I can tell you first hand that the industry has changed as much more than any other industry.

    When we entered the business online donations and even sales were in their infancy.

    Now if you’re not raising money online you are done.

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