Metrics and Evaluation Towards a New Paradigm of Success Perry T. Hammock, CFRE copyright 2012

John Kotter Said it “Every institution is uniquely structured for the results it is experiencing.”  You are here to change results  How do you sort through all the possible choices to make positive change?  How do you know if those changes work?

How Do You Measure Success?  Audience participation

Traditional Measures  Dollars raised, year to year  Number of donors  Increase Endowment  Investment returns  Cost to raise a dollar

Ours – Take One  Increase contributions 20% per year  Double Assets  Increase # donors 15% per year  Build Endowment to $12 million  Investment returns in top 20% of foundations  Pretty corporate in style and flavor

The Problems with – Take One  Increase contributions 20% per year  Rewards Slackers – encourages small gifts – discourages cultivation, planned giving  Double Assets  Rewards Hoarding  Increase # donors 15% per year  To what end? – discourages stewardship  Build Endowment to $12 million  Investments vs contributions – changing needs  Investment returns in top 20% of foundations  Varied portfolios and needs make comparisons hollow

Take Two  Dollars raised by product line with different annual expectations for each  Major gifts – up 20 %  Annual Gifts – Up 15%  Planned Gifts – up 20%  Events – up 10%  Investment returns based on dollar averaging  Grants – 10%  Add 400 major gift prospects

And ROI measure Cost to Raise a Dollar Fundraising Activity/MethodCost to Raise $1.00 Direct Mail Acquisition $1.00 to $1.25 Direct Mail Renewal $0.20 Benefit Events$0.50 Capital Campaign/Major Gifts $0.05 to $0.10 Planned Gifts$0.25 Corporation and Foundation Grants $0.20 Greenfield, James; Fund-Raising: Evaluating and Managing the Fund Development Process (1999)

Problems with Take Two  Burnout – trying to increase too much at once  Competing priorities – major gift and PG lose out  Tyranny of the urgent

Towards a New Paradigm Eikenberry and Kulver in Public Administration Review coined 3 things we need to measure  Financial Return on Investment  Social Return on Investment  Emotional Return on Investment Donors want to know that their gift is invested wisely to meet community needs and in a way that makes them feel good for participating

Fast Company Magazine Social Capitalist Awards  Social Impact and ongoing analysis  Entrepreneurship – vision compelling enough to attract investment and product important enough to leverage this investment  Innovation – lead follow or get out of the way  Sustainability – Repeat Business based on a sound business plan

Givens for New Measures  Complex enough to stand up to our charges and timelines  Relatively easy to measure and explain and also robust over time Let’s explore some categorical measurement yardsticks:

Outcome Measures  Dollars and number of gifts per year  Donors by Category – with separate expectations by category  Throughput – how long do expendable dollars stay in the system before spending. Major stewardship issue.  ROI – cost per dollar raised trending down. A sign of maturity & strength

Process Measures  Number of meetings with faculty to develop fundable proposals  Prospective funding dossiers prepared  Cultivation moves – individually & events  Solicitation calls – and average ask  Recognition events – numbers and attendance  % of time on task – what is an FTE in development?

Strategic Measures  VISION  # of fundable projects  Size of fundable proposals  Average size of first gifts  Conversion rates – calls or submissions per gift

 INSTITUTIONAL COMMITMENT  % of funds generated – restricted to big 5 projects  Donor Satisfaction Measures – surveys, phone calls, visits  Staffing per fundable proposal/ROI  Vitality  Donor Retention  # and trends in threshhold donors ( giving levels )

 Efficiency  Turnaround time – Tys, reports, checks  Admin expenses – downward trend line  Reporting – accurate, clear, concise, timely. Measure by survey, board review  ROI by category trends as investment increases

 Effectiveness  # of compelling stories to tell  Compelling evidence of lives changed  Business and community testimonials  Growth in volunteer hours and FR calls  Growth institutionally in scope, vision staffing and dollars

The Product Cycle Latency period before repeating  Short for events, annual fund  Medium long for grants  Long for major gifts  Really long for planned gifts  Put numbers on each and then measure shortening of the cycle

Bottom Line  Study what % of time your staff really devote to FR ( cultivation, solicitation, stewardship)  Develop reasonable expectations for these  Then divide time between product lines  Plug volunteers, staff, faculty into equation  Then measure success by product line by time measure  Can you report by donor type?  You cannot make a prospect give, but you can measure activity and see what increases results

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