In today's dynamic economic climate, donor retention and decreasing donor counts are concerns shared across many philanthropic industries. As a small team of data scientists and market research analysts at the Kansas State University Foundation (KSUF), we realized that maintaining the status quo wouldn't benefit forward momentum in a challenging environment. A fresh focus on key drivers for fundraising pipeline development is paramount to facing a potentially adverse market.

While it seems common for an organization to have a pipeline, the real question is: do they have a predictive pipeline? Despite possible economic fragility, our organization’s philanthropic goals seem to keep rising year over year. Every fiscal year needs a goal, and every goal needs a guide. This coming fiscal year, our team plans to implement and leverage new, sequential key performance indicators (KPIs) to proactively identify trends, optimize resource allocation and enhance donor retention and engagement.

Best Practices for KPI Planning

Implementing effective KPIs is essential for driving organizational success and achieving strategic goals. By setting clear, actionable and data-driven sequential KPIs, organizations can more accurately predict progress and funnel conditions. Providing insights that inform decisions will continuously improve each team’s performance and impact.

Below are some of the lessons learned as we plan our implementation:

• Set clear, sequential and specific KPIs: Keep it simple, but make it make sense. Ensure each KPI is clearly defined and related to your strategic goals.
• Utilize data analysis and technology: Leverage analytics tools and data systems to track, automate and analyze KPIs to provide real-time insights and identify trends that inform decision-making.
• Continuously evaluate and adjust: Regularly review and adjust KPIs to ensure they remain aligned with your organizational goals. KPIs are disposable — goals are not.
• Foster a data-driven culture: This can be a tough challenge, because you can’t apply new tech to old ways of thinking! Encourage a culture where data-driven decision-making is prioritized.
• Communicate and share results: Transparently communicate KPI results with your organization and do it often. Bring colleagues out of their silos and into the common place of shared insights.
• Focus on actionable insights: Ensure the KPIs you track provide actionable insights. Focus on metrics that can directly influence your strategies.

Planning KPIs for Each Layer

As a first step in building a predictive pipeline, we are conducting a comprehensive market analysis of our customer relationship management (CRM) platform to categorize each type of donor and determine the desired path for each category within the funnel. By visualizing the outcomes for each donor type, we can tailor our KPI strategies to predict acquisition and retention. These efforts will inform our development teams and marketing hubs about how their work is impacting funnel conditions, providing the organization with a clear over/under suite of metrics.

Acquired Donors

Our target market for this group includes non-donor constituents, segmented into contactable and non-contactable records to prioritize our approach. Clearly, the first step for non-contactable records is to acquire contact information, thus increasing our target market via phone, email, address, etc.

The overall goal for this group is to engage this elusive segment with compelling content that motivates them to make their first gift. We will challenge non-engagement by focusing on innovative strategies to capture their attention and drive initial contributions.

KPIs:

• Increase engagement rate (compare scores every quarter)
• Increase first-time donor conversion rate (compare last fiscal year rate to current)

Renewed Donors

Some year (SY) donors typically convert faster than non-donors, making them a crucial segment for reengagement. We are strategically approaching this group with targeted efforts to bring them back into the donor funnel, leveraging their previous commitment to accelerate conversion.

KPIs:

• Increase engagement rate
• Increase renewal rate
• Decrease time to second gift year over year

Retained Donors

Last year (LY) donors are a critical segment of the funnel due to their recent (and hopefully) ongoing engagement. Their fresh experience with our organization makes them more likely to continue their support, providing a strong foundation for sustained contributions and long-term loyalty.

KPIs:

• Increase year over year gift size
• Increase retention rate conversion (compared to previous years)
• Increase frequency of giving

Recurring Donors

Developing metrics to ensure our current, retained fiscal year donors remain engaged with KSUF is crucial to bringing this group deeper into the funnel and increasing their lifetime value. These measures will help us maintain their investment and support, fostering ongoing relationships and sustaining our initiatives.

KPIs:

• Recurring conversion rate (commit to multi-gift in the same fiscal year)
• Increase average gift size
• Increase overall lifetime giving

Major Donors

Major giving is a top priority for our organization and the university, as it is for many higher-education philanthropic entities. KSUF has already dedicated significant efforts to meticulously monitoring the KSUF major donor pipeline. As an additive, we simplified our frame of focus to better predict and secure the future health of this vital segment. The targets for this segment are highly engaged, highly viable prospects and previous major donors.

KPIs:

• New proposal rate (new proposals created)
• Delivered proposal rate (proposals delivered)
• Funded proposal rate (closed proposals)

Staying Proactive In Times of Uncertainty

In an uncertain economic climate, donor retention and growth are critical challenges. At KSUF, we recognized the need to move beyond business as usual and focus on building a predictive donor pipeline. By understanding the donor funnel and planning predictive, targeted KPIs for each segment, we aim to guide donor acquisition and retention demands.

Once this system of KPIs is fully adopted and established, we can begin to plan new strategies with more confidence in our outcomes. By strategically engaging each donor segment and continuously refining our approach, we anticipate building a more predictive donor pipeline that supports our mission and secures the future health of our institution.