In Part 7 of our Barriers to Growth series, I noted that the inability or unwillingness to take a hard and realistic look at an organization’s fundraising potential represents a significant barrier to meaningful growth.

Why? Because it’s simply too easy to make excuses and simply say “we’re using best practices” and “we’re doing as well, or even better than everyone else”.

Contributing to the problem is a shortage of rigorously and empirically analyzed ‘best practices’, and of benchmarking tools and comparative indexes that truly shed light on revenue potential so as to provide helpful insight and guidance.

Apart from private benchmarking data maintained by some consulting firms and not generally available, there are only four universally available tools:

• Blackbaud’s Index of Charitable Giving, a monthly report available online that reflects year-over-year comparisons drawn from actual giving to 4,000+ nonprofits.
• Blackbaud’s Index of National Fundraising Performance, compiled from the performance of nearly 80 large national organizations. It’s especially helpful for direct response fundraisers, because it deals with fundamentally important information like acquisition and retention rates, and average gifts on a sector by sector basis. (Blackbaud recently introduced a similar index for Higher Education that reflects giving to 5% of higher ed institutes and 10% of all colleges and universities.)

• Giving USA is the granddaddy of the benchmarkers. It reports amounts and trends of charitable giving 18 months after the fact. And even those delayed estimates are based on IRS Form 990 filings, which run two years behind. In June Giving USA released 2013’s numbers and you can download a free summary here.
  

All of the benchmarks above deal with the past. Not that they’re not helpful, but sometimes you want to steer the car through the windshield instead of the rear-view mirror.

If you’d like to do both, I suggest you check out this next one:

•  The Atlas of Giving is radically different from Giving USA. Not only does it report US giving as it actually occurs monthly, The Atlas also provides an updated monthly forecast for the year ahead. Its fundraising results are published in real time and giving is broken down by sector, source of gift and geographically by state.

Another feature of The Atlas of Giving is you can tailor it for individual organizations. Their process has proven uncannily accurate. You can download their free 2013 Report and 2014 Forecast here.

Why, you ask, is all this important in my busy life? Having precise and factual information is essential if you and your organization are really interested in growth and figuring your way to the truly best practices.

Let me give you one example. The Atlas of Giving reports overall giving grew by 13.3% in 2013 to $417.8 billion. That’s substantially more than Giving USA’s estimate of 4.4% and $335.17 billion in 2013.

Here’s why the difference matters:

• If you’re making a case for a raise and your numbers fall short of Atlas’ report, but exceed Giving USA’s, you can brag to the CEO and board.

• Same with consultants who want to impress their clients. (Remember, Giving USA is funded in large part by fundraising consultants.)

• BUT … if you’re really interested in the growth and financial effectiveness of your organization you’ll set your sights higher and shoot for the higher benchmark.

Of course, this difference has resulted in what Forbes called a “philanthropy food fight”. The old-timer, Giving USA, attacking the upstart, Atlas of Giving. You can get a flavor of this in an interview by Tony Martignetti with Atlas founder Rob Mitchell, Gregg Carlson, Chair of Giving USA, and Una Osilli Director of Research at Indiana’s Lily Family School of Philanthropy.

This is much more than a “food fight”. The standards and benchmarks we live and work by are essential for growth. Too low or too late or too inaccurate = stagnation or slow growth. Too high or too inaccurate  = misplaced expectations.

What benchmarks do you use, and how do you use them to help your organization grow?

Roger

P.S. To those Agitator readers who are celebrating their 2013 fundraising results because they are so much better than the Giving USA benchmark, congratulations. But it may be that “the yard stick you’re using is really only about a foot long”.

Download the memo from Atlas of Giving Founder Rob Mitchell to The Agitator explaining why.