3 Measurements Nonprofit Leaders Can Use to Determine if They Have an Unrestricted Revenue Problem

As a nonprofit leader, almost nothing makes you happier than “unrestricted surplus revenue,” right?

Whether through unrestricted gifts, membership, corporate gifts, corporate sponsorship, or earned revenue, this excess revenue is what fuels your organization and relieves a great deal of your stress.

It makes the difference between soaring or scraping by.

Expansive thinking or thinking everything is expensive.

Realizing—or minimizing—your vision.

Now here we are with six weeks left of 2023. Are you on track?

Whether you’re rounding the corner of your fiscal or calendar year, how do you know if you’ll have a surplus, breakeven, or a deficit?

What are the metrics you should be watching?

Obviously meeting your revenue goals to date is one key indicator.

The problem with only relying on this metric, however, is that if your team hasn’t met the goal, it’s too late to course correct.

Therefore, better predictors of future revenue come along much earlier in the cycle. Here are three.

Campaign conversions.

Your organization is likely planning a variety of Giving Tuesday and year-end solicitations. Keep a close eye on conversion rates—along with the factors that will influence success, such as the marketing strategy, the messaging, storytelling, the design, the user experience, and what happens before, during, and after the gift is made.

This type of marketing is one part art and one part science. 

However, if your team is exhausted, overloaded, and stressed, and simply slapping emails together, and moving on, and no one is watching out for the conversion metrics, you’ll never know what works and what doesn’t.

When I work with organizations and advise leaders, I teach them how be more thoughtful and strategic, to slow down and learn to recognize the critical ingredients of successful campaign and other tactics.

Numbers of conversations.

As leaders, we may be looking at the results. But ask yourself: are you looking at what gets your team to the result? 

Nothing is more important than having conversations with whoever buys what you have to sell—let’s take sponsorship and membership decision makers, for example.

Do you have a handle on how many conversations your team is having with new decision makers? And what happens next?

Is your marketing team collaborating with the business development team to make sure the conversations are with the right people?

Most of us did not grow up learning how to sell nor how to manage others who are selling. However, here you are, and you have to discern what works.

Effective use of time.

Do you know how your team invests its time, both day-to-day, week-to-week time plus longer term projects? 

In the short term, is your team focused on high value activities, in other words, activities that will generate significant results? Or are they wasting time on low level activities?

You also have to pay attention to longer-term usage of time. Several years ago, I advised a team and provided accountability coaching, starting in January of that year. In our first meeting, the head of the team informed me that in the next four months, the organization had three major events scheduled.

And they had done nothing to plan the events, develop the marketing strategy, or begin approaching sponsors. 

Fortunately, when I brought this to the CEO's attention, she pulled the plug on a couple things, and with my guidance, she allowed her team to focus on the right activities. 

These last few years have been a marathon, and your staff is probably ready for some time off. I get it.

That’s why you need to be clear about the right metrics for your organization’s business model so that you can lead your team to the results—unrestricted surplus revenue—that you want. 
 
If strengthening your operations and expanding your unrestricted surplus revenue are among your goals in 2024, I'm happy to share a few more tips. Please email me to schedule a call so that we can get acquainted.