Wednesday, February 1, 2017

Measuring Fundraising Effectiveness

Last week, BoardSource, Guidestar, the BBB Wise Giving Alliance and AFP announced a new framework for evaluating fundraising effectiveness — one that provides a balanced approach that emphasizes how important it is to invest in strong and sustainable fundraising programs.

I encourage you to read more about the new project, Measuring Fundraising Effectiveness, and download the free toolkits and resources that go with it, but it’s important to understand what the framework is (and isn’t) meant to be.

Measuring Fundraising Effectiveness isn’t a detailed primer on what does and doesn’t count as a fundraising cost. And it’s not like the Fundraising Effectiveness Project, another AFP collaborative project which seeks to help charities understand where they need to improve their fundraising efforts  (typically through donor retention). 

Rather, it’s a holistic way to look at fundraising costs and introduces a way to start conversations with board, staff, donors and others about your fundraising—and more importantly, explain WHY you raise funds for your organization in the way you do.

Too often, conversations about fundraising costs end up focused on what your fundraising costs are and if they are “good” or “bad.” Measuring Fundraising Effectiveness stresses that your organization’s fundraising approach is going to be unique and different from any other charity’s, based on many factors, including mission, values, history, donor base and others. It’s an important idea that builds upon something AFP has been championing for many years—that any sort of fundraising cost “line in the sand” doesn’t make any sense given the hundreds of factors that can affect fundraising from year to year.

Even more compelling to the framework is a discussion of the different types of fundraising and what they are designed to do. The purpose of a direct mail program is of course far different than the mission of a major gifts program. Measuring Fundraising Effectiveness illuminates these differences in a clear and easy way for non-fundraisers, along with other key points about how some types of fundraising take longer to find success and how different fundraising vehicles rely on each other to be most effective. 

And that’s really the most critical part of this new framework—how we reach out to boards, staffs, donors and others about fundraising costs.  That’s where the education has to begin about fundraising costs, making sure that our leaders, our presidents, our CEOs, our major donors and others understand why fundraising is important, the balance between fundraising costs and efficiency, and how the fundraising choices we make affect our organization.

There are some great tools and resources for helping you start conversations about these very important issues. Please download Measuring Fundraising Effectiveness and let me know what you think.

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