It is important to have realistic expectations about what a start-up development office can achieve and to express these expectations as key performance indicators (KPIs) so that progress toward achieving them can be monitored.
It is also important to begin with an understanding, from the institution’s leader, of any operational ground rules you must follow (e.g., an agreement around how the development office makes best use of the vice-chancellor or principal’s time – by providing ‘just in time’ briefings, by giving as much notice as possible of events, etc.).
Key Performance Indicators
While an office is establishing itself, the emphasis of monitoring should be focused on levels of activity rather than on income.
A fledging office is unlikely to have sufficient mature relationships with prospects to draw in significant levels of income. However, staff in the new office can respond to targets such as:
The number of people they are in contact with,
How often they contact people,
How often they meet with prospects and
The number of asks they make.
There might also be some very specific KPIs relating to the particular circumstances of each individual office, such as:
The volume of data ‘cleaned’,
The number of lost alumni ‘recovered’,
The number of staff recruited and inducted,
The number of internal engagement meetings held,
Progress toward articulating the case for support,
Progress toward establishing systems, processes and policies and
Setting a strategy for the development office.
KPIs should reflect the individual circumstances and goals of each development office. They should be agreed upon with the institution’s leader and regularly reviewed to ensure that they continue to be appropriate.
As an office matures, financial KPIs become more prominent but these should not only relate to the value of gifts but to their future sustainability. For example:
Total gift income (split into single gifts and regular gifts),
Total pledged income (i.e., future gifts),
Total number of gifts,
Total number of donors (subdivided relating to the amount they gave) and
Pipeline of donors.
You may have circumstances where you have a fantastic total gift amount but it comprises three one-off gifts from three donors who are unlikely to give again. Looking at where the gifts come from as well as their value is a better indicator of the success and the future outlook of the office.
You might also want to split your financial reporting into ‘sources’ – annual fund, major gifts from individuals, corporate gifts, income from trusts and income from legacies. By doing this, you should be able to work out (at least roughly) the return on investment for each method of fundraising that will help inform your future investment strategies.
Any KPIs you decide upon should also be used as the basis for targets/goals for development staff, but these targets should be realistic. For example, as a newly appointed development director, you may be unlikely to fit in 200 donor visits in the first year while you are establishing the office and unlikely to have sufficient known prospects to visit. Fifty visits might be more realistic in the first year.
Talking to other development offices and looking at benchmarking data from comparable institutions should help you set targets and KPIs that are realistic and achievable.
When defining your relationship, roles and responsibilities with the institution’s leader, make sure expectations are put into concrete KPIs that are appropriate for the stage of your office, mirror your fundraising efforts and development office priorities and are agreeable to both parties.
Determine ground rules to establish good working practices between the intuitional leader and the development director, as well as between the development office and other institutional staff.
What you measure and report largely depends on the stage of your development office.
Start-up and early stage offices will probably place more emphasis on measuring activity levels; mature offices might put greater emphasis on income. At either stage, what you choose to report will also depend on whom you are reporting to, as different audiences may require different information.
You can measure activity in a number of ways:
How many prospects/alumni you are in touch with?
How often you are in touch with them?
How many ‘asks’ have you made?
How many repeat donors do you have?
How many new donors have been recruited?
How many one-off gifts have you received?
During the set-up and early stages, you can also look at progress against milestones such as:
Annual fund launched,
Legacy programme launched and
Online giving in place.
It is important when measuring income to decide what exactly you will measure. You need to define what your institution considers to be ‘philanthropic’ income. Do you include other forms of external funding, such as special government funds, research income derived from charities or industry and even investments made by the institution themselves in special projects?
Bear in mind that not all of this income may come via the development office. A good place to start is the Ross-CASE survey, where there is a standard set of rules for what to report in higher education fundraising.
There are two common measurements:
Income received and
Projected income (based on pledges, regular giving income and the anticipation of legacies or prospects).
Projected income is naturally less accurate than income already received. It should be treated with caution, especially when reporting to external audiences. You may want to discount projected income to reflect the likelihood that it will be received based on previous experience (e.g., represent pledged amounts at 90 percent of the anticipated income to reflect the strong likelihood that they will be received, discount regular gifts/prospects to 60 percent and discount speculative legacies or prospects at 10 percent).
Projected income and discounting are helpful as internal indicators for institutions to measure their current fundraising position or use when forward planning. However, projected income should never be widely reported or communicated to external audiences, as it can raise unsubstantiated expectations.
How to Report What You Are Measuring
It is risky to report monitoring figures without some explanation. Your audiences need to understand the implications of the numbers you are showing them.
For example, if your gift income in the reporting year is less than in the previous year, you need to explain this and point to its hidden value. The difference may be due to less cash income now but derived from a significantly increased number of individual donors who have subscribed to regular giving over several years. The figure represents steady income rather than a cash injection.
To Whom to Report
Internally, you will have some reporting obligations to your senior management. You may also have to present an annual report to your board of governors or trustees and may want to share stories of your success with other internal colleagues and stakeholders.
Externally, governing tax authorities typically require a formal account of your financial income. Some of your major donors, such as trusts, foundations and even corporations, will often require a report from the projects they support.
It is good to celebrate and share some level of success with all of your donors and prospects as well – to encourage future contributions and confidence in the institution.
When to Report
You will have multiple reporting deadlines throughout the year.
The majority of these deadlines will not have flexible dates (e.g., your institution’s board, major donors). Keep a calendar of these deadlines (note: most databases have a calendaring function) and plan ahead, since most reports require data from the development and finance offices, as well as stories of success.
If there is flexibility (most commonly with smaller individual donors and internal stakeholders), try to cluster those reports or communications (e.g., a quarterly email of success) to coincide with the non-flexible deadlines so that you are gathering data and information less frequently.
During your start-up phase (and then each annual planning cycle), determine what activities and income you will measure and report.
Keep a reporting calendar, noting key audiences and donors that should receive reports, when each report is due and what the report should include.
Please note that the term advancement is often used when talking about fundraising in an educational context. As defined by CASE, the term encompasses alumni relations, communications, fundraising, marketing and allied areas.
Whilst this resource touches on all areas of advancement, its primary focus is on fundraising, or development. The terms development office and development director have been adopted to reflect this approach.
Many institutions have broad-based advancement offices, and the CASE website provides in-depth guidance on the wider aspects of advancement, including alumni relations, communications and marketing.