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The Value of Benchmarking

thevalueofbenchmarking

Benchmarking your charity’s fundraising performance against peer organisations can tell you a lot about how you (and your competitors) are doing, as well as pointing up potential opportunities. Whether you are seeking to compare your total fundraising results or just one income stream, it is a simple exercise that is well worth the time and effort.

Fundamentally, benchmarking helps answer the question “How are we doing?” and is often something we are asked to include in a review of a charity’s fundraising operation. It provides a degree of objectivity to compare your own results with.

How to Benchmark Fundraising performance

So how do you go about benchmarking your performance against that of other organisations? There are basically two ways to do this.

The first is to speak directly to similar organisations and agree to share your results, so that each can get a better idea of their comparable performance. This, however, is not always easy, especially as to get the most accurate results, you really need to be comparing your performance to that of your direct competitors. There is little point, for example, in an arts charity comparing its results with an environmental campaign or with a disability charity, as they will all have different donors profiles and fundraising strategies. Getting permission to share with competitors may not always be possible for you or for them either, although where it does happen, it can be very useful.

The more common approach is to carry out desk research to find everything in the public domain about other charities’ activities and results. So here you are looking at their annual reports and accounts, their websites, their social media presence and keeping an eye out for any publicity in the general media or charity publications about their performance. You may be following them on social media and signing up for their newsletter. You may even make a donation and learn about how they try to develop your support. If you do this thoroughly, it will give you a pretty good picture of how they operate and what sort of results they are getting. Chances are, you will also learn some useful ideas that can enhance your own practice. In doing so, you may also find that there is a gap in your fundraising or an area that you have not fully developed, so you can use benchmarking to see what others are up to and what you can learn from them.

Tracking Results Over Time

What becomes especially interesting, and potentially more useful, is to track a cohort of fundraising charities over time. This gives you a better idea of how your performance is stacking up, rather than just a one-off snapshot. You can then see whether the actions you are taking are enabling you to keep ahead or to catch up in specific areas.

Beware Of False Comparisons

But remember only to compare like with like if you want to get a fair and realistic picture. We recently conducted some benchmarking for a client, where there were very different views internally about fundraising performance.

Some people felt the organisation was greatly underperforming and one trustee had even done some of their own benchmarking, which appeared to show the organisation was doing badly. Both the overall income and the percentage of voluntary income were well below the other organisations chosen as comparators.

During our assignment, however, we also did some benchmarking against a different set of competitors – ones which in our view gave a truer comparison. This actually showed that the client was in fact doing quite well (and much better than some of those we looked at). We still identified some growth opportunities, but these were evidence-based and did not rely on false comparators.

So in summary, benchmarking fundraising performance is a useful exercise that can teach you a lot and help you to spot gaps and opportunities in your income generation. You can either do it in-house or ask a firm like ours to do it for you.

Free Chat About Fundraising Strategy

If you would like to discuss benchmarking or any other aspect of your fundraising strategy, please ring for a free chat on 01903 723519 or email info@wgconsulting.co.uk


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