Fundraisers routinely check their return on investment (ROI), but they don’t always take a close enough look at just what they are tracking or hoping to learn.
Speaking during the Association of Fundraising Professionals’ international conference, Bill O’Connor of the U. S. Naval Academy Foundation and Robert Rice of consultancy CCS said ROI is a simple calculation, a measure of outright and comparative efficiency used to evaluate the efficiency of an investment and to compare the efficiency of different investments.
ROI is one of many useful metrics that can be useful as a measure of performance, what can be called the inverse of cost to raise one dollar. Further, ROI should be used to:
- Measure return on institutional mission;
- Measure return on each individual funding need; and,
- Measure fundraising expenses and efficacy.
With all that in mind, they suggested the following benchmarking best practices:
- Think long-term consistency;
- Focus on quantitative data;
- Mark by consistency and method;
- Limit to only key qualitative questions;
- Collect raw data, not calculated figures; and,
- Be specific. Define everything.
As to what should be in a performance scorecard, O’Connor and Rice highlighted:
- Overall results;
- Corporate giving;
- Cause-related marketing;
- Cost of fundraising;
- Program growth;
- Foundation giving;
- Special events;
- Board giving;
- Individual major gifts;
- Online giving; and,
- Volunteer giving.