Economic Analysis For Nonprofits

If I'm in charge of revenue at a large nonprofit, I can't ignore these realities 👇 -Donors giving below $100 are down ~9% (and have been trending down) -Donors giving below $500 are down 4% (and have been trending down) -Slower income growth & less disposable income for most -Middle-class households under economic pressure -The rapid decline of religion (that has giving as a core tenet) -Decline in institutional trust -Not only is charitable giving largely stagnant as a % of the GDP, but we also haven't been able to grow share of wallet -Donors giving $5k-$50k are up 1% -Donors giving $50k+ are up ~3% And if I look around at what other nonprofits are doing, I might see 👇 -Marketing getting louder -Frequency cranked to 11 -Tired tactics with little differentiation And if strategy is about how an organization applies strength against the most promising opportunity or the most critical challenge, I need to address the problem head on. Three ideas... 1) Instead of getting louder, get closer to donors. -Jeffersonian dinners -"Jobs To Be Done" interviews -Measuring donor satisfaction -Rating the donor experience -Cross train across the org on how to listen to donors -More thoughtful prioritization and segmentation -Do things that don't scale; you will likely not "scale" anyways (but you'll very likely grow!) 2) Focus more energy on the people who *can* give more. That doesn't mean you should ignore the $100 donor. Two things can be true at the same time: most of your limited human hours are best spent on people who can give >$10,000, AND, you can treat the $100 donor like they're an important part of the team (because they are). -Create tiered caseloads (A, B, C, D donors) -Develop a donor engagement plan for each tier -Treat mid-major donors like true partners: frequent report backs, project proposals, town halls, feedback loops, in-the-moment updates -Focus your work in the 'mass' file to identify the best prospects for a mid-major treatment, and work to move as many OTGs to recurring (monthly) or re-occuring revenue (quarterly, yearly, etc.) 3) Promote giving from assets across the donor file—and make it easy to do so Russell James taught me this. When people give from their assets, the gift is likely to be larger. And they are more likely to give again. Giving from assets (like stocks and shares, tax-savings accounts, retirement accounts, DAFs, gifts of life insurance, etc.) is often the smartest way for donors to give—no matter the size of gift. But many donors simply don't know it's an option. -- We're partnering with growth-minded nonprofits to implement all of these ideas, and more. If you think it's time you create a solid midlevel giving strategy (not just a standard appeal with an open ask), give me a shout.

High-net-worth donors are acting more like venture capitalists. Not in the sense of writing checks for the next unicorn but in how they evaluate nonprofits: The shift: A 2023 Bank of America study found that 85% of high-net-worth donors now “expect measurable results” from their giving, compared to just 47% a decade ago. Another Bridgespan survey showed that nearly 70% of major philanthropists look for scalable models and evidence of impact before committing funds, almost identical to the screening criteria VCs use with startups. In other words: your nonprofit is being “pitched” just like a startup. What this means for you: Donors are no longer satisfied with: • “We served X families this year.” They’re asking: • “What’s the cost per outcome? How do you scale? Who’s on your leadership team? What’s your theory of change?” These are due diligence questions straight out of a VC’s playbook. The playbook shift for nonprofits: 1. Metrics over anecdotes → Replace “heartwarming story only” with “story + unit economics of impact.” 2. Growth narrative → Share not just what you did last year, but your roadmap for 3–5 years. Think in terms of market expansion (communities served), not just annual fundraising goals. 3. Board = Advisors → Highlight how your board members function like startup advisors, unlocking networks, capital, and credibility. 4. Risk transparency → Just like startups disclose risks in their decks, nonprofits that are candid about challenges gain trust with major donors. Why this works: Data shows that storytelling + data posts on LinkedIn outperform by 27% in engagement compared to generic updates . The same applies in fundraising. Pair the emotional “why” with hard “how” metrics, and you’ll unlock six- and seven-figure checks. With purpose and impact, Mario

Selling Non-Monetary Metrics to Your Board "We raised $10 million this year!" Your board members' eyes light up. But what if that number doesn't tell the whole story? Focusing solely on dollars raised is like judging a book by its cover. It might seem attractive but the real substance is inside. So how do we get our boards to see the bigger picture? Let's dive into the art of selling non-monetary metrics: 1. Donor Loyalty: The Gift That Keeps Giving Show your board how a 5% increase in donor retention can lead to a double-digit increase in lifetime giving. Suddenly, keeping donors happy becomes a top priority. 2. Quality Over Quantity: The Engagement Game Demonstrate how deeper engagement (more volunteer hours, event attendance, etc.) correlates with larger gifts over time. It's not just about how many donors you have, but how invested they are. 3. Mission-Aligned Magic Illustrate how attracting donors who truly "get" your mission leads to more passionate advocates and potentially larger, long-term gifts. It's about building a community, not just a donor base. 4. The Long Game: Monthly Gifts and Commitments Yes, that big one-time gift looks great on paper. But show your board how a smaller monthly gift can outperform it over time. Predictable revenue is the secret sauce of sustainable nonprofits. 5. The Ripple Effect: Beyond Direct Donations Highlight how engaged donors become your best recruiters, bringing in new supporters at a fraction of the cost of traditional acquisition methods. The Key: Data Storytelling Don't just throw numbers at your board. Weave these metrics into compelling stories. Show the journey of a donor from first-time giver to passionate advocate. Illustrate how investing in donor relationships now pays dividends for years to come. Our job is to build a sustainable, mission-driven community of support. And that deserves more nuanced metrics than just a dollar sign.

5 Metrics Every Nonprofit Board Director Should Master As a nonprofit CEO, I’ve witnessed how powerful a well-informed board can be. To lead with purpose, every director must go beyond governance—they must own the numbers that shape mission, trust, and momentum. |• These five metrics aren’t just indicators—they’re leadership in action. { 1. Fundraising Efficiency . Measures how cost-effectively your nonprofit raises money. A gold standard is $0.20 or less per $1 raised. . Why does it matter? Because every dollar saved is a dollar redirected to impact. - I’ve helped boards recalibrate their strategies using this metric, building donor confidence and financial integrity. { 2. Program Expense Ratio . Reflects the proportion of funds invested directly in mission work—aim for 70%+. . This is more than optics; it’s a signal of alignment between your values and your budget. - Boards that internalize this ratio steer the organization with purpose and precision. { 3. Donor Retention Rate . Tracks how many supporters return year after year. . A rate above 60% indicates trust and a compelling mission narrative. - I’ve seen firsthand how boards that prioritize relational stewardship cultivate reliable, long-term revenue. { 4. Cash Reserves . Measure how long your organization could operate without new income. . The ideal is 3–6 months. . This buffer empowers bold decisions and ensures resilience during disruptions. - A strong reserve isn’t excess—it’s strategic foresight. { 5. Volunteer Engagement . Reveals how time, not just money, fuels your mission. . Track hours and impact—10+ hours per volunteer annually signals a thriving ecosystem of shared purpose. - Boards that elevate this metric unlock new capacity and deeper community roots. | These aren’t vanity metrics—they’re a leadership compass. - Fundraising and Program ratios show stewardship. - Retention and Reserves reflect trust and foresight. - Volunteer data reveals your human capital engine. Master these, and you lead with clarity, credibility, and courage. 𝐈𝐧 𝐭𝐡𝐞 𝐧𝐨𝐧𝐩𝐫𝐨𝐟𝐢𝐭 𝐬𝐩𝐚𝐜𝐞, 𝐢𝐧𝐟𝐥𝐮𝐞𝐧𝐜𝐞 —and these five metrics are where transformation begins. Thinkers360 #NonprofitLeadership #InspiringTheBusinessWorld #Leadership #ThoughtLeadership

"Last year, we raised $1.2 million." That's the number most nonprofit leaders walk into board meetings with. It's the number on the annual report. It's the number the ED uses to exhale and say, "We had a good year." But here's what that number doesn't tell you: $400,000 of it came from one donor who just turned 83. Another $200,000 was a one-time grant that isn't renewable. And 70% of the first-time donors who gave last year? They're already gone. Strip away the one-time windfalls and the unrepeatable gifts, and that $1.2 million might really be $500,000 in sustainable revenue. I've worked with hundreds of nonprofits, and the ones that get blindsided almost always have the same story. They hit their number, so nobody asked hard questions. Then one major donor moves on, one grant cycle shifts, and suddenly there's a crisis that was hiding in plain sight for years. 𝗟𝗮𝘀𝘁 𝘆𝗲𝗮𝗿'𝘀 𝘁𝗼𝘁𝗮𝗹 𝗶𝘀 𝗮 𝗿𝗲𝗮𝗿𝘃𝗶𝗲𝘄 𝗺𝗶𝗿𝗿𝗼𝗿. It tells you where you were. It tells you almost nothing about where you're going. The numbers that actually predict your fundraising future are different. They're less dramatic, but far more useful: 𝗗𝗼𝗻𝗼𝗿 𝗿𝗲𝘁𝗲𝗻𝘁𝗶𝗼𝗻 𝗿𝗮𝘁𝗲. What percentage of last year's donors gave again? If it's below 50%, you're replacing half your donor base every single year. 𝗥𝗲𝘃𝗲𝗻𝘂𝗲 𝗰𝗼𝗻𝗰𝗲𝗻𝘁𝗿𝗮𝘁𝗶𝗼𝗻. What percentage of your total comes from your top 5 donors? If it's above 40%, you don't have a fundraising program. You have a handful of relationships. 𝗡𝗲𝘄 𝗱𝗼𝗻𝗼𝗿 𝘂𝗽𝗴𝗿𝗮𝗱𝗲 𝗿𝗮𝘁𝗲. How many first-time donors made a second gift within 12 months? This is the leading indicator of long-term growth. 𝗔𝘃𝗲𝗿𝗮𝗴𝗲 𝗴𝗶𝗳𝘁 𝘁𝗿𝗲𝗻𝗱 𝗼𝘃𝗲𝗿 𝟯 𝘆𝗲𝗮𝗿𝘀. Is your average gift growing, flat, or shrinking? A shrinking average gift with a rising total means you're running faster just to stay in place. Your board doesn't need to celebrate last year's total. They need to understand whether that total is built on rock or sand. Pull your numbers this week. Calculate your retention rate, your revenue concentration, and your new donor upgrade rate. If you don't like what you see, that's not bad news. That's the information you needed six months ago. What's the one metric that surprised you most when you actually looked at your data?

After helping over 1,000 nonprofits raise more than a billion dollars, I can tell you exactly what separates the organizations that are thriving from the ones stuck in survival mode. And it's not what most people think. Here are the five shifts that actually work: 1. They don't celebrate gross revenue: I cannot tell you how many times I've watched leadership teams high-five over hitting their revenue goal while completely missing that they spent 70-85 cents to raise every dollar. This is especially true for organizations that are event-heavy in their fundraising, or that have large premium-based direct marketing programs. Start tracking donor retention rates, lifetime value per donor, and NET revenue instead. What gets measured gets managed. And those that are thriving all measure the right things. 2. They don't rely on last gift to determine opportunity I once analyzed 40 donor files and found that 15-30% of donors held millions in assets but were giving $25-$150 gifts. Because the organizations they supported were stuck on the direct mail hamster wheel and only ever asked for small gifts. Giving request strategy was built on the donor's last gift (which was given because the org asked only for inconsequential gifts). Your next major donor is already in your database. You just haven't looked hard enough. Stop assuming that someone who's given you $50 for seven years is a "$50 donor." They might be a $50,000 donor who you've accidentally trained to give small amounts. 3. Ask for assets, not just cash Here's a stat that should keep you up at night: 91% of wealth is held in assets like donor advised funds, IRAs, appreciated stock, estate gifts. Yet most nonprofits only ask for credit card gifts and checks. One of our clients sent a major gift activation campaign expecting to raise $250,000. They raised $421,000 instead, and 90% came through DAFs. That's not luck. That's intentionality. 4. Build relationships at scale Millennials and Gen Z expect major-donor treatment even when they're giving smaller gifts. They want access to leadership, transparency about impact, real reporting. If you can't deliver this to thousands of donors (not just hundreds), you're already behind. The infrastructure you built for your top 100 donors? You need that for everyone now. 5. Invest in people, not just postage Moving beyond nominal transactional gifts requires proximity. You have to connect with supporters in meaningful ways that go far beyond what is possible when you focus exclusively on direct response channels. The absolute best direct response fundraising campaigns can only scratch the surface on the level of revenue that can be generated through relationship-based asks. The organizations making these shifts are increasing donor retention rates, accelerating revenue per donor growth, and maximizing net revenue well beyond those that are not.

Not a big reveal: no museum director complains about a blockbuster show or a record attendance year. But attendance alone doesn't tell a board much about long-term health. Tsugumi Maki's recent post on how nonprofits count audiences makes a strong case for something else: understanding returning visitors. So what should count? Here are five numbers museums could track instead of raw attendance: 1. First-time, new visitor, and repeat visitor rate — depth and growth both matter for a museum's future 2. Endowment-to-operating-cost ratio — covering at least one-third of operating costs from endowment creates financial health and room for more creative risks 3. Staff retention, salary and healthcare competitiveness, and job satisfaction — an indicator of your ability to attract and keep the best talent 4. Number of partnerships — especially sustained ones that build community, grow audience, and share cost 5. Ongoing visitor feedback and satisfaction scores — not just exit surveys, but annual data checks across the museum visitor lifecycle Aligned with a clear mission, the right metrics keep everyone — from staff to boards — focused on what matters most, and push organizations toward long-term health, innovation, and excellence instead of short-term wins. #MuseumLeadership #NonprofitStrategy #ArtsAndCulture #Endowments #Development Photo: Dmitry Kostyukov for The New York Times

Your 90-day reserve is not financial health. At $100M institutions, it's the minimum survival floor. This confusion costs you money. The 90-day reserve answers one question: will this organization survive three months with zero revenue? It's a triage threshold. A worst-case survival check. It was never built to tell you if you have the financial architecture to absorb a real shock. A grant termination. A reimbursement dispute. A federal program change. A leadership transition. Three months of payroll in the bank tells you none of this. 49% of nonprofits sit below the 90-day floor right now (Nonprofit Finance Fund, June 2026). The sector has normalized a survival posture and calls it baseline health. The 51% who clear the floor? They're using a triage metric as a substitute for real financial analysis. Four questions your board should ask instead: 1. What is our revenue concentration? If one grant is 40% of revenue, your 90-day number is compromised the moment the funder sends a letter. 2. What is our cash conversion cycle against grant reimbursement timelines? Federal grants under the new 2 CFR rules sit 60 to 90 days in reimbursement. Your 90-day reserve in this environment is not a 90-day reserve. 3. What is our risk-adjusted reserve target? Not a flat number. A function of revenue volatility, expense concentration, and leadership transition probability. A $3M children's services org with two federal grants is not safe at the same reserve level as a $3M arts org with diversified individual giving. 4. What would a 15% revenue shock look like in our cash flow model? Not a thought experiment. A line-by-line scenario the CFO walks the board through. Boards manage to the metric they understand. When the only number on the cover page is the 90-day reserve, it becomes the finish line. The work is to give boards better questions. If your finance committee report still leads with the 90-day number, swap it. Lead with revenue concentration. The conversation changes in one meeting. What does your board use to evaluate financial health? I want to see what we're collectively measuring.

Some nonprofits obsess over the wrong numbers. Open rates. Social likes. Event RSVPs. And then wonder why 𝘳𝘦𝘷𝘦𝘯𝘶𝘦 𝘪𝘴 𝘧𝘭𝘢𝘵 and donors are disappearing. Here’s the truth: 𝗡𝗼𝘁 𝗮𝗹𝗹 𝗺𝗲𝘁𝗿𝗶𝗰𝘀 𝗮𝗿𝗲 𝗺𝗼𝗺𝗲𝗻𝘁𝘂𝗺. I call them 𝘃𝗮𝗻𝗶𝘁𝘆 𝗺𝗲𝘁𝗿𝗶𝗰𝘀 𝗶𝗻 𝗺𝗶𝘀𝘀𝗶𝗼𝗻 𝗰𝗹𝗼𝘁𝗵𝗲𝘀. They look good in a dashboard. But they don’t move the mission. Here’s what high-performing organizations track instead: 𝗗𝗼𝗻𝗼𝗿 𝗿𝗲𝘁𝗲𝗻𝘁𝗶𝗼𝗻 Because keeping a donor is cheaper—and more powerful—than chasing a new one. 𝗦𝗲𝗰𝗼𝗻𝗱 𝗴𝗶𝗳𝘁 𝗿𝗮𝘁𝗲 Because a second gift turns interest into belief. 𝗟𝗶𝗳𝗲𝘁𝗶𝗺𝗲 𝘃𝗮𝗹𝘂𝗲 Because impact multiplies when donors stay, grow, and refer. 𝗖𝗼𝘀𝘁 𝗽𝗲𝗿 𝗱𝗼𝗹𝗹𝗮𝗿 𝗿𝗮𝗶𝘀𝗲𝗱 Because sustainability matters more than the hype of “big numbers.” 𝗗𝗼𝗻𝗼𝗿 𝗲𝗻𝗴𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝗱𝗲𝗽𝘁𝗵 Not how many saw it. How many felt it. Shared it. Acted on it. Data should serve decisions, not just presentations. The best fundraisers don’t just measure what’s easy. They measure what 𝘮𝘢𝘵𝘵𝘦𝘳𝘴. 𝗪𝗵𝗮𝘁 𝗺𝗲𝘁𝗿𝗶𝗰𝘀 𝗱𝗼 𝘆𝗼𝘂 𝘁𝗿𝗮𝗰𝗸 𝘁𝗵𝗮𝘁 𝗺𝗼𝘃𝗲 𝘆𝗼𝘂𝗿 𝗻𝗼𝗻𝗽𝗿𝗼𝗳𝗶𝘁 𝗳𝗼𝗿𝘄𝗮𝗿𝗱?

7% of new donors stayed last year. Do you know why the rest left? Most fundraising directors track the wrong metrics. They obsess over dollars raised while missing the signals that predict whether those dollars keep coming. Here are 7 metrics worth checking every week: 𝟭. 𝗗𝗼𝗻𝗼𝗿 𝗥𝗲𝘁𝗲𝗻𝘁𝗶𝗼𝗻 𝗥𝗮𝘁𝗲 Q1 2025 data shows overall retention at 18%. New donor retention is even worse: 7%. If you're not tracking this weekly, you're flying blind on the metric that matters most. 𝟮. 𝗔𝘀𝗸-𝘁𝗼-𝗚𝗶𝗳𝘁 𝗖𝗼𝗻𝘃𝗲𝗿𝘀𝗶𝗼𝗻 How many asks are you making? How many convert? Even 3 to 5 quality asks per week can shift your quarter. 𝟯. 𝗥𝗲𝘃𝗲𝗻𝘂𝗲 𝗣𝗲𝗿 𝟭,𝟬𝟬𝟬 𝗘𝗺𝗮𝗶𝗹𝘀 Open rates are unreliable since Apple's Mail Privacy Protection inflated them. In 2024, nonprofits raised $58 for every 1,000 fundraising emails. Know your number. 𝟰. 𝗗𝗼𝗻𝗼𝗿 𝗔𝗰𝗾𝘂𝗶𝘀𝗶𝘁𝗶𝗼𝗻 𝗖𝗼𝘀𝘁 What does it cost to bring in a new donor? This tells you which channels are working and which are bleeding money. 𝟱. 𝗔𝘃𝗲𝗿𝗮𝗴𝗲 𝗗𝗼𝗻𝗼𝗿 𝗟𝗶𝗳𝗲𝘀𝗽𝗮𝗻 The longer donors stay connected, the more they contribute through gifts, volunteering, peer fundraising, and advocacy. Measure it. Extend it. 𝟲. 𝗖𝗼𝘀𝘁 𝗣𝗲𝗿 𝗗𝗼𝗹𝗹𝗮𝗿 𝗥𝗮𝗶𝘀𝗲𝗱 A result of 1 means you broke even. More than 1 means you made money. Simple math. Critical insight. 𝟳. 𝗗𝗼𝗻𝗼𝗿 𝗚𝗿𝗼𝘄𝘁𝗵 𝗥𝗮𝘁𝗲 Small-gift donor participation dropped over 10% recently. Are you growing or shrinking? Year-over-year comparison tells the truth. Total dollars raised grew 3.7% in 2025. But donor count keeps fluctuating. Revenue without retention is a treadmill. Which of these are you tracking weekly?