The Nonprofit KPIs That Actually Predict Fundraising Success
“Did we hit our revenue goal?”
When it comes to fundraising, most organizations are measuring the wrong KPIs (key performance indicators) to determine success. That, or they’re setting unrealistic expectations for what success should look like for a fundraising department or an individual fundraiser.
I see this in fundraising job descriptions all the time.
“This position will be expected to 1.5x revenue in the first 18 months.” When a position leads with the revenue expectation, you know that’s the only thing that matters for that organization.
I was at an event last year when someone said to me, “If I hire a fundraiser, I expect them to raise their salary and then some within the first six months.”
It's a perspective I hear more than I wish I did. And it tells you everything about how that organization understands fundraising — and why fundraising staff retention is currently hovering around 14 months, down from 16-18 months just last year. (Philanthropy.com)
I was the Director of Development at an organization where I quadrupled year-end giving after a long, proactive lapsed donor reengagement strategy. Donor retention increased by 20 percentage points in less than a year, and hundreds of previously lapsed donors were now reengaged. But when it came to year-end, we hadn’t hit the ambitious revenue goal that had been set without my input, so none of that work mattered. It wasn’t celebrated. It was seen as a failure.
I gave my notice two weeks into January.
When revenue is the only metric that matters, organizations aren’t just missing the picture — they’re actively driving away the people building it. Sustainable fundraising isn't measured in dollars raised this year. It's built on a set of indicators that work together to grow revenue over time. Organizations that miss that are the ones starting from zero every January, unable to think beyond this quarter, let alone three years out.
How to Measure Fundraising Success
The problem with measuring fundraising performance on revenue alone is that dollars raised is actually a lagging indicator, especially when 30% of all charitable giving happens in December. (NP Source)
So, where does it come from? Why do so many organizations fixate on revenue above all else?
Foundations and charity watchdogs are fixated on how much money an organization spends on administrative expenses, especially fundraising. In the US, the IRS Form 990 specifically asks how much an organization spends on fundraising every year. Many foundations will not fund organizations that spend more than a certain percentage of their revenue on fundraising.
There’s also the influence of the private sector on nonprofit Boards. Most nonprofit Board Members come from the private sector, and that often creates a culture where private sector practices are considered the norm for nonprofits, which isn’t usually the case.
The result? Organizations overly focused on the ROI of their fundraising and keeping their fundraising costs down.
Here’s why that’s problematic. It signals to organizations – and donors – that fundraising shouldn’t be an expense, which leads them to devalue fundraising.
And when organizations devalue fundraising, they overload a job description with four positions in one, because keeping fundraising costs low matters more than setting a fundraiser up to succeed. And when the only measure of success is revenue, burnout isn't a risk — it's inevitable.
Why Salary Has Nothing to Do with Fundraising Performance
The idea that a fundraiser should raise their salary back and then some, within a given timeframe isn't just unrealistic. It reflects a fundamental misunderstanding of how fundraising actually works.
When fundraisers are given a revenue goal as the only benchmark of their performance, they’re focused on raising that number to keep their job – not to build relationships with donors and connect them to the mission, to raise the bottom line. This inherently creates transactional fundraising.
Donors become a means to an end. Their donations are a number to hit, not a relationship to build. And when donors feel like they’re being asked, rather than engaged, they don’t come back. Retention suffers and a pipeline is never fully realized.
This transactional focused fundraising shows up in a lot of places, but one place I’m increasingly seeing it is in compensation.
No, You Can’t Pay Fundraisers on Commission
First, a hard stop: commission-based compensation for fundraisers is prohibited by the AFP Code of Ethics, which most professional fundraisers operate under. It's not a gray area.
The reason it's prohibited matters more than the rule itself. Commission structures incentivize exactly the wrong behaviors — transactional asks, short-term relationship management, prioritizing easy wins over long-term donor cultivation.
I’ve seen a lot of positions posted recently for fundraisers and grant writers that are commission-based with no base salary and I have to adamantly reject that.
Paying fundraisers on commission doesn’t build donor relationships. It undermines them. And it favors those who either have the financial flexibility to work for months without pay.
Pay your fundraisers.
The same logic applies to any version of "raise your salary back." When you reduce fundraising performance to a single number, you're incentivizing the same shortcuts. You're also ignoring everything that makes fundraising sustainable.
How Much Should a Fundraiser Raise Compared to their Salary
Here's the honest answer: that’s the wrong question.
What actually determines a fundraiser's performance in a given year has very little to do with how much money they can raise in a short period. It has everything to do with what they walked into. Namely:
What they inherited. A fundraiser stepping into a warm, well-documented portfolio is in a completely different position than someone building a major gifts program from scratch.
Organizational maturity. A development office at a 15-year-old organization with established donor relationships is not the same as one at a three-year-old org still establishing credibility with funders.
Ramp time. Relationship-based fundraising takes time. Expecting significant revenue growth in the first six months assumes donors are ready to give the moment a new person introduces themselves. They're not.
Infrastructure. Does your CRM have clean data? Is there a stewardship plan? Are board members engaged in fundraising? A fundraiser is only as effective as the systems around them.
I've seen talented, experienced fundraisers underperform on paper in their first year because they spent that year cleaning up a neglected database, reengaging lapsed donors, and rebuilding trust with a board that had checked out.
I’ve been that fundraiser.
That's not a failure of the fundraiser. That's an investment into your organization.
That work – the database cleanup, the pipeline building – often goes unnoticed and ignored. But good fundraisers take time to build infrastructure, and the results of that work don’t usually show up in year one. They show up in year three, with an engaged, active pipeline that’s ready to give.
The Nonprofit Fundraising KPIs You Should Be Tracking
So how do you measure the success of your organization’s fundraising efforts?
It’s a valid question.
Revenue is one data point. Here are the fundraising KPIs that actually tell you whether your fundraising program is healthy.
Donor Retention Rate: If you're only tracking how much money came in, you're missing the most important number in your fundraising program. Donor retention tells you how many donors who gave last year gave again this year. The sector average hovers around 40-45%, which means most organizations are losing more than half their donors every year. Acquisition is expensive. So many organizations say that they need more donors, but they can’t even tell you what their donor retention rate or first-time to second-gift conversion is. Retention is where sustainability lives.
I worked at an organization with a 19% donor retention rate. That means that 81% of their donors were leaving every single year. Most organizations can’t afford that kind of turnover, but they aren’t investing in what makes donors stick around.
First-Time to Second-Gift Conversion: Acquiring a first-time donor is the beginning of the relationship. Whether that donor gives again is one of the strongest indicators of fundraising sustainability. This metric isn’t just about the individual donor, it’s about your organizations’ approach to stewardship. If your first-to-second conversion rate is low, you have a stewardship problem — not an acquisition problem. The sector average is 23%. If you don’t know what that number is for your organization or have never paid attention to it, set 23% as you baseline and work from there.
Pipeline Planning: How many prospects are actively being cultivated? A healthy fundraising program has donors at every stage — identified, cultivated, solicited, stewarded – and a clear understanding of who in your organization is responsible for which donors at which stage. A pipeline isn’t a list of every donor who has given a certain amount, it’s a qualified list of donors you know you can move through the pipeline.
Average Gift Growth: Are your donors giving more over time? Flat or declining average gifts signal that donors aren't deepening their relationship with your organization. Growing average gifts signal trust and engagement. Not every donor will increase their gift, but donors who shift from one-time donors to repeat donors, or recurring donors, signals strong engagement and connection between your donors and your organization.
Stewardship Touchpoints
If your donors only hear from you between Giving Tuesday and December 31 each year with a year-end appeal, you don’t have donors, you have a list of customers. See donor retention above. How often are you communicating with your donors about your organization with updates, personalized notes, phone calls just to say thank you? Those touchpoints matter. And they get sidelined more than any other fundraising task.
You want to know the fastest way to restore your connection to you organization? Talking to a donor who has the same passion for the organization and tells you why.
Revenue Raised by Funding Stream: While revenue shouldn’t be the primary metric raised, it is valuable to understand how much revenue is raised from each of your different revenue streams and whether those streams are growing, stagnating, or shrinking year over year. This can help with future staffing planning.
Staff Tenure in the Development Office: This one doesn't show up on most nonprofit KPI lists. It should. Fundraiser turnover is one of the most expensive and underacknowledged threats to fundraising sustainability. If you can't keep fundraising staff, you can't build the relationships that drive revenue.
The average cost to replace a fundraiser is estimated at 50-200% of their salary when you factor in recruitment, onboarding, stalled campaigns, and lost institutional knowledge. And we've already established that the average fundraiser tenure is around 14 months.
When I left that organization in January, they didn't just lose a pipeline. They lost years of institutional knowledge — a fundraiser who understood their donors, their programs, and their gaps.
Organizations that can't retain fundraising staff don't just lose good people. They lose momentum. And momentum, once lost, is very hard to recover.
Staff tenure isn't an HR metric. It's a fundraising metric.
So, did we hit our revenue goal?
Maybe. Maybe not. But if that's still the only question you're asking at the end of your fiscal year, you're missing the fuller picture of what a healthy, sustainable fundraising program actually looks like.
Donor retention. First-to-second gift conversion. Pipeline depth. Staff tenure. These are the numbers that tell you whether your fundraising program is built to last — or whether you'll be starting from zero again next January.
The organizations that get this right aren't just measuring differently. They're thinking differently about what fundraising actually is and what it takes to do it well.
That starts with asking better questions.
If you read this post and are starting to think differently about how you measure fundraising success, the next step is making sure your organization is set up to support the fundraisers doing that work.
My free hiring guide covers how to set realistic expectations, how to support fundraising staff once they're on board, and how to honestly assess your organization's culture of philanthropy.
And if you need more support in figuring this out, you can book a 90-minute Strategy Session to talk through exactly what you’re struggling with and get the support you need. Click here to reach out.