Soon my fellow Good Workers and I will be releasing this year’s Canadian Direct Mail Benchmarks Report. As I was looking a draft of the report, two questions came to mind:
- Why are benchmarks important in the first place?
- Do fundraisers like you and me use benchmarks as much as we could (and should)?
Today, professionals of all types rely heavily on benchmarks to do their work as well as possible.
How would my doctor monitor my health if he wasn’t regularly measuring and keeping track of my blood pressure reading, cholesterol count, and blood glucose level? How would my mechanic fix my car – or even know what to fix – without taking certain readings and measurements (which I’ll admit I can’t even start to understand). Isn’t a weather forecast more meaningful when the weather reporter tells you the temperature – and then tells you what the normal temperature is for this date.
You see, these readings themselves are of little or no value. But when they’re compared to the ideal – or to an average reading for the entire population – the value is added. It’s when the comparison happens between my blood pressure reading of 122/82 is compared to the ideal benchmark of 120/80 that my doctor can say that I’m good on that front.
I use benchmarks every time I lift weights at my gym. I know that my usual weight for a bench press is a certain amount – and my usual weight for a Romanian deadlift is another amount (these are both my benchmark numbers). As I’m able to lift more weight I can measure my progress (key performance indicators or KPIs) against my benchmarks and know that I’m progressing, maintaining, or losing body strength.
Can skilful use of benchmarks help you as a fundraiser to connect more meaningfully with your donors and raise more money? You bet your life they can!
Without going totally math nerd on you, let’s use a simple direct mail donor investment calculation to illustrate:
- Your charity invests $60 on average to bring each first-time donor onto your file.
- Your direct mail program’s conversion (the percentage of first-time donors who make a second gift) rate is 35%.
Based on this information, we can calculate your program’s investment for a new repeat donor is ($60/.35) $171.43. This is your investment in a donor who will hopefully generate lots of net revenue for you in the months and years to come.
And briefly, you can calculate the payoff from your new donor investment by multiplying average gift size x gift frequency (average number of gifts per donor per year) x life expectancy (which can be calculated from your donor renewal rate). In this example, we’ll say that $85 x 1.4 x 5.5 years, resulting in a gross return of $654.50.
Now all this is well and good, but should you be satisfied with them? You will know this only once you’ve compared your own figures to some sort of standardized benchmarks for the sector. For example, if your cost of a new repeat donor is $171.23 and the sector average is $223.23, you know that you’re doing better than the sector benchmark by $52.
So, the idea of benchmarking is this: When you measure and record important facets of your direct mail program’s performance and compare them to sector benchmarks, you can see trends that will help you make strategic and tactical decisions going forward.
For the fourth consecutive year, Good Works is about to release our Canadian Direct Mail Benchmarks Report for charitable sector benchmarks. With this report, you can see how your program is performing compared to the average benchmarks of the sector as a whole. We’re able to do this because dozens of Canadian charities have shared their data with us and we’ve crunched the numbers. This report can become (if it isn’t already!) an invaluable tool in your belt and make you a better fundraiser.
Take a bit of time. Get into your data. Figure out your key performance indicators (all those numbers I’ve talked about above). And compare your program to the charitable sector benchmarks. You’ll find out where you’re outperforming your peers, where you’re in the middle of the pack and where you’re falling behind.
And after all, aren’t we all curious to know how we compare to everyone else? I think most of us are. So, get your numbers lined up and take your direct mail program for its annual checkup using this report. I promise, your program will be stronger for it!
Isn’t it time you became a part of this report? We’ll soon be starting up the next one. If you would like to participate, you’ll be doing a service to the sector – and you’ll get an individualized report from Good Works that does all the comparisons for you! It’s like your very own individualized report card that serves as a tool you’ll use for better fundraising at your organization.
If you have any questions about participating in next year’s study, please get in touch with Lindsay Thibault at firstname.lastname@example.org. She’ll be happy to help you out!