This time of year can get busy for fundraisers. There is so much to do in terms of administration, planning and auditing, preparing for the new year can get hectic. So once the craziness of holidays is over, the new year is a perfect time to perform a fundraising audit to check in with your strategies.
It offers an excellent benchmark for the rest of the year and can be done individually or with your team! Fundraising audits don't need to be time-consuming or cost money. You should mark an annual fundraising review in your calendar to measure your success metrics over the past year and set your upcoming yearly goals.
What Is A Fundraising Audit?
A fundraising audit is used to comprehensively assess your current fundraising efforts to identify strengths and weaknesses within your strategy. It should be used as a tool to determine what worked well in the past year and see where you can improve.
The goal is to take a good look at your fundraising programs and ask yourself if your time and budget are used in the most effective way possible. This is a great activity to do at the beginning of the year to help access your progress and set your annual goals.
Benefits Of A Fundraising Audit
No matter the size of your organization, performing a fundraising audit can provide great insight on
- Weaknesses or gaps in revenue generation and sustainability
- New goals and objectives that can help guide your organization toward greater sustainability and fundraising success
- Your organization's financial management, as well as the board and staff's role in raising funds
- Finding new information regarding revenue potential and strategy
How to Perform A Fundraising Audit
To start, create a spreadsheet with basic information about each fundraising activity including:
- Name of the fundraiser (Holiday Giving Blast, Summer Walk-A-Thon, #GivingTuesday Instagram campaign)
- Purpose of the fundraiser (capture new donors from Facebook, activate lapsed donors), including the strategic goals you met/planned to meet.
- Date/time range of fundraiser, including the time for planning and follow-up
- Intended audience (social media followers, current donors, major donors)
- The net income. Subtract the cost to run (staff time, marketing expenses, etc.) from the total raised
When performing your audit it's important that you pay attention to your approach. Alexandra Mannerings joined us on the Fundraising Superheroes podcast to give her advice on making data-driven decisions, and she explained that as humans we will always have a natural bias when it comes to analyzing our data. In our interview, she shares how to approach your data fairly and make fair and reflective decisions of the data you collected.
Include Donor Data & Other Analytics
In order to properly perform an audit, you need to look at your data! As experts in data collection, we have seen our clients use their analytics to make smarter more informed decisions that help them connect with their donors on a deeper level. The truth is in the numbers, and the don't lie.
Review your data to find the following information and add it to your ongoing audit spreadsheet.
- Donor Information (name, contact info, demographics)
- Total number of donors
- Returning donors (donors that gave without an extended lapse)
- Recaptured donors (donors that did not give for a period of time but returned)
- New donors
- Average gift amount
- Number of major gifts and average gift amount
This is especially easy to do if you have donor management software. With our customizable dashboard, you can use Driven to pull up all the information you need in a flash.
What To Look Out For In A Nonprofit Fundraising Audit
You have to focus on three things:
- Where are we now
- Where do we want to be
- How do we get there
You can address these questions by first looking at your fundraising results from the previous year, along with any internal and external factors. It would be beneficial to proforma a SWOT analysis of these different areas to understand what you are up against when building a new fundraising plan.
SWOT or strengths, weaknesses, opportunities and threats looks at everything that could affect your performance in the following year.
Strengths: positive internal factors that improve success. Like a great group of fundraisers, a well-stock studio or powerful donor management software.
Weaknesses: Internal factors that need some work. Maybe you are low on funding, have outdated equipment or don't have the resources you need to grow.
Opportunities: External factors that contribute to your success. Like a community in need of your services, government grants available to you, or a business in need of a nonprofit partner.
Threats: External factors that hurt your organization like COVID-19, budget cuts or an unengaged community.
Fundraising Audit Checklist
Begin by reviewing your metrics
- Overall growth in total dollars and donors
- Donor Lifetime Value (five years or more)
- New donors acquired and lapsed donors
- Average donation amounts
- Donor and donation retention rates
Do some benchmarking to see where you stand
- With your donors
- With your audience
Reflect on what worked and what didn't work
- Ask yourself why it didn't work? What could have been changed?
- What worked well and how can you continue to work on that?
Set your strategies for success in the coming year
- What are your KPIs (Key Performance Indicators)?
- What specific SMART goals would you like to achieve?
- Do you need to adjust your budget or time to make it work?
At the end of your audit, you should clearly understand where you are, where you want to be, and how you plan to get there. It really can, and should be that simple and we have all of the dashboard analysis covered for you here at Driven.
Conclusion
Organizations perform a fundraising audit to pinpoint areas of improvement in your nonprofit's fundraising strategy.
In addition to performing an annual internal audit, you should be regularly monitoring your data and your fundraising metrics. Having a donor management system with a customizable dashboard allows for instant monitoring of your fundraising progress.
As an expert in data management, our team would love to show you how to monitor and manage your database. Reach out to us to learn more about Donor Driven and its ability to streamline your fundraising.
