Nonprofit boards are often handed a single number to gauge fundraising success: total dollars raised. While that figure matters, it doesn’t tell the whole story, and it can even be misleading. Smart boards want to understand whether the organization’s fundraising engine is healthy, sustainable, and aligned with the mission. To do that, leaders must go beyond surface-level metrics and look at return on investment (ROI) and indicators of long-term donor engagement.
Why “Dollars Raised” Alone Falls Short
- It ignores cost: A campaign that brings in $1 million but costs $800,000 isn’t as effective as one that nets $400,000 on $100,000 spent.
- It hides risk: Events and galas can inflate revenue in one year but leave the organization dependent on an unpredictable income stream.
- It misses donor loyalty: A one-time gift spike may look impressive but doesn’t mean you’re building a sustainable base.
Metrics Boards Should Pay Attention To
Boards should track key indicators that reflect efficiency, sustainability, and donor engagement:
- Net Revenue & ROI: Net revenue = Total dollars raised – total fundraising expenses. ROI = Net revenue ÷ total fundraising expenses. Understand how much net money each fundraising stream generates and how efficiently each dollar is spent.
- Donor Retention & Lifetime Value (LTV): Track the percentage of donors giving again and the average total amount over their relationship with the organization. High retention signals sustainability.
- Cost to Acquire a Donor (CAD): Total cost of campaign ÷ number of new donors acquired. Low CAD indicates efficient acquisition tactics; pair with retention data for context.
- Revenue Diversity: Monitor the mix of revenue from individual gifts, grants, events, sponsorships, and earned income to reduce risk.
- Upgrade & Downgrade Rates: Track donor giving changes year over year to evaluate stewardship and engagement.
- Fundraising Staff & System Investment: Monitor staff capacity and technology use (CRM adoption, major gift officer caseloads) to ensure infrastructure supports growth.
Vanity Metrics to De-Emphasize
Total followers, event attendance without net revenue context, one-time viral giving spikes, or gross event revenue may look impressive but don’t indicate long-term fundraising health.
How to Present This Data to the Board
Boards need clear, actionable insights, not data overload:
- Use dashboards with key indicators and multi-year trends.
- Provide context by comparing ROI to benchmarks or past campaigns.
- Link metrics to mission outcomes to show impact.
Bottom Line
Great fundraising isn’t just about the top-line number—it’s about smart growth, donor loyalty, and long-term financial health. By shifting conversations from vanity metrics toward ROI and sustainability indicators, nonprofit leaders can make better decisions and provide confident oversight.
