Measuring Fundraising Effectiveness

May 15, 2018

by Andy Davis, Director of Education, BoardSource

Last month, the Association of Fundraising Professionals (AFP) held its annual international conference in New Orleans. If you have never been to the AFP conference before, I can tell you that it’s quite something. There were close to 100 individual sessions on just about every topic related to nonprofit fundraising for 3,500 attendees ranging from those with literally no fundraising experience (the author of this blog post, for one) to those with lifetimes of experience and expertise.

BoardSource attends the conference—and encourages others nonprofit leaders to do so the same —  because we know organizations desperately need well-educated fundraisers to move their missions forward, and we are committed to supporting AFP’s efforts to educate board leaders about fundraising. For that reason, BoardSource President and CEO Anne Wallestad and I co-presented a session at the conference with AFP Chief Advocacy and Strategy Officer and General Counsel Jason Lee on a topic that we feel can be very helpful for professional fundraisers—the Measuring Fundraising Effectiveness framework.

When BoardSource—along with our partners at AFP, BBB Wisegiving, and Guidestar—developed this framework, our goal was to assist nonprofits with a problem all of us have been struggling with for far too long: how to measure our fundraising “success” and determine if we are making effective decisions as they relate to our fundraising efforts.

Traditionally, when you read about fundraising costs for nonprofits, one of two positions emerges: (1) Nonprofits should be free of restriction and allowed to spend at will to raise money, or (2) fundraising costs are too high and the percentage of dollars going “toward the mission” is the only metric that really matters. BoardSource and its partners believe that neither of these positions is wholly accurate and that there should be more nuance to the discussion.

We think the Measuring Fundraising Effectiveness framework is a responsible and reasonable way of thinking about fundraising effectiveness. It emphasizes three essential measures of fundraising performance:

• Are our fundraising efforts delivering a strong return on investment?
• Do we understand the risks or weaknesses of our fundraising strategy, and are we appropriately managing those risks?
• Are we resourcing our fundraising program in a way that invests in our long-term growth and sustainability?

Instead of thinking about fundraising holistically, nonprofits have become trapped by our own language that is meant to communicate success but instead undermines our sustainability. Measuring Fundraising Effectiveness provides fundraisers with a new framework that allows them to educate leaders and stakeholders on the risks associated with focusing solely on the cost of fundraising and not on a long-term strategy that will ensure the organization is able to serve its mission for years to come, as well as today and tomorrow.

As noted above, I’m not a fundraiser and I don’t pretend to understand how a great fundraiser thinks, but I learned last week that the Measuring Fundraising Effectiveness framework is something that fundraisers want and need. I know because they told us. In a room of more than 400 people, we heard over and over—before, during, and after our session—that nonprofit leaders want to be donor-centric and serve the wishes of those who literally keep their organizations doors’ open, but they need a better way to tout fundraising success that does not discourage investment in sustainability.

Now, we would love to hear from you. Download the Measuring Fundraising Effectiveness framework toolkit and discussion guide. Have a conversation with your board and other organizational leaders, not just about how to measure your fundraising success but how to communicate that success and your confidence in your organization’s long-term sustainability.

Once you’ve had that conversation, send me an email and tell me how it went. BoardSource wants to hear your success stories with the framework—and if there are challenges, tell us that too. We’ve seen the appetite the sector has for this tool; now we need to see how it is implemented and how boards are using it. Your stories will help change the conversation from one focused on the cost of fundraising and overhead to one focused on how to keep our organizations and our missions strong—today and the many more todays to come.

*Learn more about Measuring Fundraising Effectiveness through a free webinar presented by Anne Wallestad, BoardSource president & CEO.  During “The Conversation You are Not Having – and Should Be Having – about Measuring Your Fundraising Effectiveness,” Wallestad will explain the set of three measures that nonprofits can use to present a more complete picture of their fundraising health than the cost of fundraising alone.

(AFP Note: There are two important, complementary projects addressing fundraising effectiveness. BoardSource, in partnership with the Association of Fundraising Professionals, the BBB Wise Giving Alliance and Guidestar, has developed Measuring Fundraising Effectiveness, which is a great tool for educating board members, donors, volunteers and staff about how to view, understand and think holistically about fundraising costs and investments. The Fundraising Effectiveness Project, a partnership between AFP, the Center on Nonprofits and Philanthropy at the Urban Institute, numerous other nonprofit organizations, and several donor software companies, takes detailed giving data from thousands of charitable gifts to develop hundreds of fundraising performance metrics to help charities make better-informed, growth-oriented budget decisions to boost donor revenue.)