LAPA's Annual ROI Report Card
ROI (Return on Investment)
ROI? Boring, right? I usually avoid jargon, but these three letters, well, I just love ‘em. And you should too!
Think about it, the best non-profits, those with innovative programs who serve tons of people and have stable funding, they all focus on high performance. And a key way to understand performance is through ROI.
By examining the ROI of your development program, you discover what works best. Specifically, you discover what your return is for each dollar you spend.
LAPA Client ROIs
Every January we look back at the past year and review the ROI for our clients. This exercise lets us know if the strategies we're using are raising enough money. Once we have the results, we refocus on the things that are working, and revise those that are not.
A snapshot of the 2012 ROI for LAPA clients is displayed on the right. We are celebrating with our clients and are proud to report that we meet or outpace the industry benchmark of an ROI of "three to one” for every client that’s been with us for more than 12 months.
To our knowledge, LAPA is the only fundraising firm that tracks and publicly reports our ROI for each client. We do this because we know you trust our fundraising counsel, and we want you to see how powerful an ROI analysis can be when put into action!
Process Improvements Help ROI
In addition to the ROI bottom line, process improvements to your fundraising program must be considered. Your ROI calculation should not just be a mathematical exercise but should also document the improvements to your fundraising processes-- improvements that you make now that will bear fruit later-on.
To illustrate this point: one of LAPA's clients spent a year reinvigorating their Community Council, it cost them $35,000 and didn’t bring in any money. If we had just looked at direct return, and not process, the Council may have been abandoned. But we knew this work was about the future. One year later, that Community Council had spearheaded and supported a $1 million public grant from their State Government, an ROI of $28.57 to $1.
When you look at your ROI, don't forget those activities that will affect your bottom line in the future. Did you start a planned giving program this year? Begin meeting with more major donors? Those programs will bear fruit if you keep at them, so don't be scared to invest in them today.
For first-hand testimony about her evolving experience with ROI, read Sara Kirkwood's story
Here's to another great fundraising year, and, as always, we welcome your feedback. Please post your comments directly onto the blog.