“What gets measured gets managed”

Managing Member Alan Sobel set the stage perfectly for the SobelCo Annual Symposium that was held on January 13, 2021 by referencing this famous quote from Peter Drucker.

Focusing on how metrics can be leveraged to drive important decisions, a panel of experts shared their experiences both measuring and managing data across three key pillars – fundraising, marketing and financial and managerial operations.

The speakers, Terry Connolly (nourish.NJ), Gwenn DellaPelle (Cornerstone Family Programs and Morristown Neighborhood House) and Aurora Rosado Lazzaro (SobelCo), along with moderator Jeff Key (Nfinity Enterprises), offered distinctive insights and shared several common observations.

While Alan Sobel cautioned that all nonprofit leaders need to beware of getting caught up in analysis paralysis, he also noted that without data-driven decisions, it is almost impossible for any nonprofit to be consistently successful and create a lasting legacy. It is important therefore to maintain a solid balance between understanding data and being overwhelmed by it.

Each of the panelists agreed that data is essential, but to use it properly, nonprofit leaders must ask some fundamental questions:

  • What do we want to measure?
  • What do we need to ask?
  • What do we need to know?
  • How can we interpret the data most effectively to avoid bias?
  • What are the trends that are emerging from the data?
  • How can our organization adjust and change in response to the metrics?

Terry Connolly: Data can be used to support and shape the organization’s marketing message

In October 2019 Terry Connolly, the Executive Director of nourish.NJ, was proud of the successful re-branding of the nonprofit that had just been rolled out.Working together, the Board of Directors had agreed to participate in this major undertaking because they recognized that their name, Community Soup Kitchen of Morristown, no longer effectively described their mission to create lasting solutions to the problems of hunger, homelessness and poverty.To accomplish this goal, nourish.nj provides food, housing, work readiness, medical, social and educational services 365 days a year in a warm, safe and caring environment, free of charge, no questions asked. 

Because their long standing former name/brand conjured an image from earlier decades when people waited in line at “soup kitchens” for “handouts,” they took on the daunting task of repositioning the organization to reflect its current, more relevant, and broader vision. But just as they were finalizing the new name and newly designed website, COVID-19 struck, changing the landscape in a way no one could have foreseen.

As they found ways to reposition the organization – going from leveraging their 4,000 in-person volunteers to a virtual platform – they gathered and used data to make smart decisions regarding all of their marketing communications.

Email– they used email to distribute messages, not only to engage with their audience and to keep them informed, but even more importantly, to take action. With careful attention paid to both the subject line and the targeted content, they were able to get and keep the attention of their intended audience. In doing so they generated data that enabled them to look beyond the open rates and the click-throughs in order to measure other factors, such as the number and size of any donations and registrations that were generated by the email.

Website – Leveraging Google analytics, they looked at the website data, seeking details on conversion rates and specific outcomes. They could determine who visited the site, how much time was spent on each page and which pages were most popular. In this way they could make changes in response to their visitors’ expectations, encouraging longer stays and developing greater loyalty.

Social Media –The nourish.nj leaders initially focused on the social media data available to them to determine how many comments they were collecting to their posts, or how many likes they were getting. But over time they realized that they needed to focus instead on converting their followers to become supporters and volunteers and donors. The likes and comments were nice, but they were not enough. They needed to look at their social media responses through a different lens, asking just one question: what do we want from our followers?

They learned so much along the way!

After the name change, their new data strongly pointed to a swing in demographics among their supporters. The information gathered indicated that the new name, the new attitude, and the stronger mission statement was attracting a younger audience in addition to their traditional supporters. They were penetrating new audiences, gaining attention, and increasing loyalty and financial support. So they used this information to help reposition their conversation by making a purposeful shift in their marketing behaviors. Their younger audience preferred online conversations, rejected postal mail campaigns, were comfortable with short videos, and engaged more completely with informal contact, casual language and a lighter tone. Once the organization made these tweaks, adjusting every aspect of their messaging in emails, social media posts and web content, they enjoyed consistent growth within the younger generation, with solid results and high retention.

Reviewing the data and responding to the characteristics of their new audience was the first step to further segmenting their target list and creating specific messages that would resonate with each audience.

Terry’s final words of advice were:

  1. Do something – it is better than doing nothing and just accomplishing one thing will lead to further changes.
  2. Track the metrics – pick a few categories that will provide some insights for you, such as open rates, click-throughs or increasing donations and retention. Don’t bite off more than you can chew. Just measure and manage a few areas at first and add more as you go.
  3. Tie the data to financial results – remember that data that paints a picture for effective marketing also can have a significant impact on fundraising outcomes.

Gwenn DellaPelle: The right data can shape your fundraising efforts

Gwenn has spent many years helping nonprofit organizations with their development initiatives. As such, she has learned to rely on data to guide her decisions regarding both fund raising and cultivating meaningful relationships. Behind-the-scenes metrics speak volumes about what is going on in front of the curtain!Knowing the number of volunteers, the number of clients served, the number of programs offered, and the number of dollars raised, demonstrates the ability of the organization to achieve its mission and support its vision.

Raw data must be interpreted to be meaningful. Not only is it important to look at statistics, but it is important to compare the statistics to other time periods in order to develop benchmarks that add value.Analyzing the data enables the leaders of the nonprofit to see the big picture and to respond and react accordingly.It is vital to consider how to handle repeat donors and supporters, lapsed donors (who stopped supporting the group - and learning why), and of course, new donors and sponsors who can be nurtured over many years going forward.

It’s all about the numbers and the picture they paint

As Gwenn noted, the answer to how you measure fundraising success goes theamount raised to include several metrics that can give the organization a concise snap shot picture of the overall health of its fundraising efforts.  Dissecting the data helps identify the strengths and weaknesses of the nonprofit’s efforts while also pointing out where the greatest opportunities lie. To dig deeper and have access to a broader, more useful, perspective, Gwenn relies on several indicators that support her ability to track donations and donor activity, such as:

  • Cost per Dollar Raised or Return on Investment (ROI)
  • Growth Rate
  • Retention Rate
  • Average Gift Amount
  • Average Fundraising Amounts for Events
  • Conversion Rate
  • Return on Mission

The data produced by looking critically at these key categories provides the key to unlocking the secret of consistently successful fundraising and donor development. In each instance, specific pro-active steps can be taken to improve the results and thus increase the success of the fund raising initiatives.

The impact of COVID could not be ignored

Reliable data usually points the way to good decision making.But the pandemic presented an unprecedented challenge for nonprofits, most especially in their fundraising strategies. In-person galas disappeared overnight, and in their place came other opportunities. As Gwenn explained, knowing what supporters most appreciate helped her team when they were considering what new events to offer. Creativity and flexibility were at the core of new, virtual programs. From an online auction to a drive-in movie night, numbers told the story. Reviewing the number of participants, the number of funds generated, and the number of successful fundraisers held in 2020 all contributed to a successful year for the organization. As a result they were able to continue serving their clients and delivering the programs that are so crucial to their survival.

Gwenn’s final words of advicewere:

  1. Always set goals.
  2. Decide what you need to know – determine what information will enlighten the organization and help it become more effective in capturing the minds, hearts and wallets of an ever growing audience of supporters.
  3. Whatever data you dissect, the important thing is to take the time needed to do it effectively. If it is measured and examined strategically, the data can help youidentify your strongest path forward.

Aurora Rosado Lazzaro: Analyze the data, observe the evolving trends and be prepared to pivot

Aurora shared keen insights on how leveraging financial information can help nonprofits be more successful and efficient in their operations, infrastructure, and programming.While marketing and fundraising are growing ever more reliant on data to be most effective, reviewing and dissecting data is also integral to developing a reliable financial picture.

There are seven ratios that are at the core of any nonprofit’s metrics

F - Fundraising efficiency – To determine this metric you divide the total contributions (other than government grants) by fundraising expenses.A ratio of less than one means it costs you more than you are making!

O - Operating reserve – This reflects net assets without restrictions less fixed assets, less debt related to fixed assets,divided by the organization’s annual expenses less depreciation and amortization.The calculation determines how long an organization can continue its operations without generating any revenue to fund them. The ratio should not be less than 25%, which indicates the organization could manage for three months without driving revenue.

C - Current ratio – This ratio is determined by dividing current assets bycurrent liabilities. The ratio should be greater than two to ensure that all expenses can be paid within one year with a level of comfort.

C - Change in net assets – If there was a decreases in net assets, the organization must ask itself if it lived within its diminished means during the year.

U - Understanding operating reliance – This is the program revenue divided by total expenses. When determining this facet of operations, the nonprofit should gain an understanding of how much it is able to pay for total expenses solely from program revenues – without becoming too reliant on donations.

S - Savings Indicator ratio – This ratio looks at net revenues that are retained by the organization as a percentage of expenses.

P - Program efficiency ratio – By dividing program service expenses by the organization’s total expenses) it can determine how efficient it is at fulfilling its mission. 

Referencing the acronym FOCCUS-P above, Aurora demonstrated clearly how specific financial metrics can provide any organization with the information it most needs to maintain ongoing operations. Whether focusing on programs or - during the pandemic - focusing on pivoting, it is key to maintain a strong FOCUS!

Aurora’s final words of advice were:

  1. Know what data is most significant for your organization’s future sustainability.
  2. Ask the tough questions.
  3. Be ready to implement changes quickly and efficiently.

Jeff Key: Let me tell you a story

With these six simple words, Jeff Key, who served as the panel moderator, reminded us all of the basic role that data plays in the nonprofit community.

The first imperative is to have a story to share with supporters and followers, but the second imperative is to have the data to back up the narrative and highlight the positive outcomes.

When Jeff was summarizing the panelists’ comments, he noted that while these two imperatives have always been the foundation of any nonprofit’s successful outreach, it is even more obvious during COVID-19 than ever before.

Jeff’s final words of advice were:

  1. Nonprofit leaders must be able to clearly articulate their mission and vision.
  2. The organization’s story and the outcome must integrate into one cohesive narrative.

To be successful, the leadership of a nonprofit must be able to draw on meaningful metrics-knowing which data is most relevant, collecting the right data, analyzing and interpreting the data, and then ultimately using the data to make the changes that will improve and enhance all its initiatives.