Here’s the story of how a small nonprofit organization began to use data and do a simple kind of measurement. The same process, more or less, is what any organization is likely to go through when it starts from scratch to do measurement.
I was once on the board of a small but rapidly-growing local nonprofit. Each year we sponsored a handful of fundraising events, including an auction, a cocktail party, dinners-with-board-members, and others. We knew these generated income and helped us gain recognition in our community, but had no organized procedure to evaluate or compare their effectiveness.
So one day I asked the board, “Why are we doing these? What do we get out of them? How can we decide which ones to continue doing and which ones to drop?”
At that time our board was sharp and motivated, but inexperienced in running a nonprofit. We had just one employee, a part-time administrative assistant. It would be a couple years yet before we hired a savvy executive director.
So it took us a while to come to the understanding that our fundraising events were about more than just money. After discussion and some education, we began to realize that new members were valuable, new volunteers were even more valuable, and new potential board members and major donors were especially valuable. In addition, we came to understand the concept of lifetime membership, and to think of members as not just one-time donors, but a potential source of income and support long into the future.
But there were problems when it came to putting actual numbers into play. Our organization kept membership and donation records, of course. But it was not yet in the habit of using those records for analysis and decision-making.
In fact, when I tried to get summary stats, there was a bit of resistance. Our records were not set up for easy access or analysis. Our administrative assistant had never been asked to provide anything but event income and annual revenue. In fact, he really didn’t think it was part of his job to look carefully at the membership data; he was busy enough sending out thank you notes and getting the newsletter ready. Some board members even wondered if “doing statistics” should be a proper use of his time.
Again, our organization was made up of smart energetic people, but we just weren’t used to thinking in terms of data.
Eventually we got some basic numbers together, like average annual donations, and number of new members per year. From similar nearby organizations, we got estimates of the average lifetime of a new member, and the chance that a new member would become a volunteer or board member.
So, with a little arithmetic, we determined some useful stats. For instance, we calculated that if event X brought in Y new members, then the estimated lifetime value of those members was Z. And we could estimate the number of new volunteers we would get if such-and-such a number of new people came to one of our events.
Moreover, we considered the value of the promotion and publicity that occurred before and after each event. We came to realize that our promotional efforts for each event—emails and postcards and letters to the editor in the local paper—reached many people, and delivered valuable messages to a wide audience, even though only a fraction of those people would actually attend the event. Similarly, post-event thank you notes and letters to the editor also reached a valuable audience, one much larger than just those who attended the event. As a result we expanded our promotional efforts to reach the widest audiences possible.
For most events we did our best to engage partnerships with local businesses and other organizations. For catering, for instance. Or as an educational component offered through the schools or local adult ed programs. We came to recognize that these partnerships were a valuable extension of our reach. Also, that the generosity and frequency of these partnerships was an indication of the recognition we were getting in our community.
And so our fund-raisers were acknowledged as friend-raisers and member-raisers as well. And we began to keep track of events in terms of new memberships and partnerships and the extent of community contacts.
We began to express the success of events in terms of the value of the new memberships that they generated. One attendee to a cocktail party would generate, say, $50 as a one-time donation. But if that person became a member, then their lifetime value was likely to be in the thousands of dollars. Once we realized this we began to alter our events to encourage new memberships.
And with this the organization came to realize that record keeping was important, and that the numbers that were gathered could be used to compare events to each other. In one way, our newly data-aware organization saved time by making the components of decisions clearer. (Getting our records into Excel helped a lot, too.) Yet in another way, the new use of data to understand the purpose and success of our events took up more time, because it opened up new areas of discussion and debate.
The point here is not the level of functioning that our board attained. In fact, all of this member-value tracking is one of the most basic of nonprofit management skills. The important point is that we were an organization that went from zero use of data to one that carefully collected it and stored it and now has regular procedures to use it to make decisions.
And so this is the story of how our board began to do simple measurement. Soon after we began to gather and analyze data on our events, we began to do an annual survey of our membership. We became an organization that understood the value of data, and understood that collecting, tending, and analyzing that data was a priority.
Image courtesy of monikabaechler on Pixabay.
Latest posts by Bill Paarlberg (see all)
- Sarab Kochhar Interview: The Passion that Drives Her, How She Measures Her Own Success, and Bollywood Classics - May 9, 2017
- On the Occasion of His Retirement: 5 Questions for Measurement Legend Don Stacks - May 8, 2017
- 3 Qualities That Make a Great Communications Measurement Professional - May 8, 2017