fantastic benchmarks and where to find them

Benchmarks are important to most organizations. They allow us to compare our performance to our industry peers, inform us of industry best-practices, and give us insight into our strengths and weaknesses. Unfortunately, really good benchmarks are harder to find than a bowtruckle in the Forbidden Forest. Data can often be misleading; not understanding the limitations of your chosen benchmark, or using an inappropriate benchmark, may cause undue frustration over recent performance or faulty decision-making.

so, what makes a great benchmark?

One aspect that may seem obvious, but is often easy to overlook, is making sure your benchmark measures the metric you actually want information on. For example, if you want to check the success of a newly implemented mobile donation platform, it would be a mistake to measure this against a benchmark designed to measure online giving. You’ll end up falsely concluding that your initiative has been unsuccessful since online giving usually includes more than just mobile platforms.

consider the sample size of your benchmarks

Sample size refers to the number of organizations who submitted data for the survey or study. It’s often difficult to know when a sample size is large enough to safely draw conclusions from it, but consider this thought experiment: would you rather draw conclusions on email engagement rates from a study that surveyed 100 organizations within your city’s metro area, or from a study that surveyed 10,000 organizations across the country? How would this change if you knew that there were over 5,000 organizations in your city’s area that could have been surveyed? Is a 2% (100 ÷ 5,000) sample size enough for you to feel confident in your conclusions? The answer isn’t always obvious but should be considered before choosing to compare your organization’s performance against a benchmark.

be specific and purpose-driven

A benchmark should also be specific to your organization’s specialty or focus. You know what your organization does better than anyone else, so be sure the benchmark you choose aligns with the core purpose of your nonprofit or mission-driven organization. For example, you may be classified as a faith-based organization, but that doesn’t necessarily mean you should jump right to the faith-based benchmarks. Maybe your focus is more closely aligned with humanitarian or social services-based organizations. It may make more sense to look at the results for those sectors instead.

beware of biases

It’s also important to be aware of biases or limitations in a benchmark’s underlying data. Good surveys help eliminate some of these, like incorrectly calculating donor retention rates or email conversion rates. But surveys can still contain biases like self-selection bias or survivorship bias.

It’s possible that organizations that choose to participate in a survey may have some characteristics or similarities that make them more likely to report their results than others. This is called self-selection bias and can throw off the “randomness” in a survey and skew results. Survivorship bias can also occur when organizations who were not in existence long enough to be surveyed are left out of the data. Normally this bias ends up showing results that are better than what actually occurred during the observation period.

So, we know what makes a good benchmark, and we know the pitfalls and shortcomings benchmarks may contain. What now?

where can we find good benchmarks?

It’s unlikely you’ll ever find the perfect benchmark. Unless you’re willing to pay a marketing firm to conduct a study aimed specifically for your needs, you’ll have to settle with more generic benchmarks. However, these can still help guide your decisions. Keep in mind that generic insights from data may be more valuable than more specific comparisons.

With that in mind, good starting points may include:

  • Annual Giving Report by Blackbaud. This report has a large sample size but may be subject to self-reporting bias since all of the organizations surveyed utilize Blackbaud’s products.

  • 2019 Benchmarks Report by M+R. This report has a smaller sample size at 135 participants and almost ⅓ of participants are environment-related nonprofits. Be careful of using this if your nonprofit doesn’t focus on environmental efforts.

  • Nonprofit Standards by BDO Advisory Services. This report is also smaller in sample size (100), but takes a slightly different angle by examining the strategies and operations of nonprofits. It also separates respondents based on size (annual revenue), which can be valuable.

how are you measuring up?

If you’re concerned about your organization’s performance, contact us. We’d be happy to collaborate with you and help you boost your organization’s awareness and fundraising efforts!