Benchmarking – where to start?

White ladders leaning on to bull’s eye targets which are positioned at different levels on blue wall.

Sometimes it’s helpful to know how you’re doing against your peers in the sector. Having a sense of your relative fundraising performance can help in a number of ways:

  • Identifying growth areas – if others are raising money at scale or with good efficiencies maybe you can too?
  • Identifying problem areas – if others are struggling to achieve good ROIs in particular income streams or channels, maybe it’s a wider issue and you can reasonably ask the question, ‘should we stop doing this?’
  • Developing fundraising knowledge and capacity – depending on the nature of the benchmarking study you might find some interesting pointers in the data. For example, if you have completed a survey on supporter emails and find that your open rates are significantly lower than others in the study you can start to ask some questions about why that might be.
  • Managing knowledge internally – it probably shouldn’t be a key driver of benchmarking exercises, but we know that Trustees and Senior Management will take an interest in fundraising performance. Having some data that demonstrates how your programme stacks up against peers can be useful…

Things to be aware of!

It is almost impossible to entirely avoid comparing apples with oranges when participating in benchmarking studies. The organisers understand this and will generally do their best to draft the questions in a way which minimises this. Alternatively, they might write some narrative with the results to cover this; for example, a question that asks for the ROI of a major donor fundraising programme, might be supplemented by other questions which ask how long the programme is running, whether there is a capital element to the current fundraising efforts, how big the team is and how long team members have been in post. This deeper level of detail will help you understand that each organisation is likely to be at a different point in the journey. If this supplementary detail is absent from the study (and it does make the study quite a bit more complex to include this…) then you need to remember that you are not comparing identical programmes when you review the results.

Completing benchmarking surveys can take a bit of time. You may have to liaise with the finance team to get some of the information about salary costs for example, and you’ll certainly have to think about how to answer the questions from your organisation’s perspective. So, think about the value that the results will add to your fundraising planning and build this time into your schedule if you believe the knowledge gained is worth the input of effort.

So, what are the studies that might be useful to you?

Starting at the macro end of the scale, the NCVO almanac can help you to understand big sector trends around funding, workforce, composition of the sector etc. Those involved in conversations with government around support for the sector during the pandemic suggest that the almanac was a very valuable tool to inform and frame discussions. Whether it led to the level of support for voluntary organisations that might have been warranted is another question…

The Chartered Institute of Fundraising did some benchmarking in association with Blackbaud in 2019 on how fundraising across the sector was going after the introduction of GDPR – I suspect they may revisit this in future so worth checking back from time to time…

Starting to zero in on your fundraising programme level, Fundraising consultancy LarkOwl has produced a benchmarking study for the last three years which is a very welcome resource, filling the gap left by Fundratios, the study that was run until 2013 by the Centre for Interfirm Comparison. The LarkOwl study will help you benchmark your income streams by return on investment (ROI), which can be very valuable in helping you assess where you might have the potential for growth and which areas you are doing well in, comparative to others.

Drilling down still further, there’s a great study that Rally helped to coordinate in conjunction with M+R in the States about digital fundraising, campaigning and communication. So, if you want to know how others are doing in terms of website engagement, online advertising metrics, social media reach and so on, it’s a great resource. The study’s authors have applied the kind of thoughtful approach which helps keep the comparator data useful; grouping contributor organisations by size; using year on year data only when they can report on the same organisations (to allow for changes in contributors across years) and so on. Because M+R has data from the USA, we can compare UK performance to that arguably more mature market too. The news around digital fundraising growth in the 2021 report is pretty good too, with revenue up 35% (partly pandemic-driven, but partly improved practice-driven too I suspect).

Staying with digital and moving up a level from the Fundraising and Communications department to the whole organisation level, is Zoe Amar’s excellent Charity Digital Skills Report. Recognising the importance for charities of offering their services digitally, managing their communications and fundraising activities using digital platforms, and taking advantage of the efficiencies of digital across the infrastructure of their organisations, the annual Skills Report is essentially tracking the voluntary sector’s adoption of digital. The 2022 survey is live until the 29th April and you can win an unrestricted donation of £500 from The Clothworker’s Foundation if you take the survey before then and are one of three lucky prize draw winners. What’s not to love?

Those are the best free benchmarking surveys I’ve come across. There are some good legacy fundraising benchmark studies which are charged for by the agencies who provide them. Drop me a line if you’d like to know more about those.

I think we owe a debt of thanks to the agencies that manage benchmarking projects on behalf of charities – it’s not a small amount of data wrangling! – and also to the charities that participate. Knowing how you are doing relative to others can be an important part of the forward planning process – if you spend the time completing the surveys you should make sure you are thinking about what to do with the results too!

Let me know any good surveys I’ve missed, and I’ll add them to the resources page.

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