AHP Connect Articles

4 Ways to Boost Performance with Benchmarking

The recently released AHP 2019 Report on Giving is full of industry stats, and we recommend you add it to your 2020 reading list. But don’t just flip through and then shelve it. The most successful philanthropy professionals benchmark their performance regularly throughout the year. Keep reading to learn how (and why) they do it.

Get Your Board on Board (and Your C Suite Too)

Benchmarking data can educate board, C suite partners, and others in the ecosystem on the importance of philanthropy and your commitment to continuous improvement. Data helps you validate potential investments to your board and show them how previous investments paid off. 

It can also be used to set their expectations. Philanthropy professionals know that revenues fluctuate during campaign cycles, but the perceived instability can spook board members and executives, especially when revenues are falling.

Showing industry benchmarks can help your board and C suite understand that short-term revenue ups and downs are nothing to worry about. We might staff up for a particular campaign and see high revenue, but when the campaign finishes we expect revenue to go down. Industry benchmarks reassure your key stakeholders that this is the norm across the industry, and that when you look at revenue over longer periods of time, those fluctuations even out.

Find the Next Big Thing

One of the most profitable uses of benchmarking data is for forward planning. Benchmarking your own performance against a range of key indicators will show you your biggest opportunity areas. Even if you can’t find truly comparable organizations to benchmark against (for example, if you represent a very small hospital), you can benchmark against yourself in prior months or years. 

Look at what the high performers are doing, and pinpoint the things they are doing differently from you. Use this assessment to guide where to invest your dollars to grow net fundraising revenue. For example, Jory Pritchard-Kerr, the executive director of the Collingwood General and Marine Hospital Foundation in Collingwood, Ontario, noticed that successful organizations put a larger emphasis on major and planned gifts than she did. She used benchmarking data and created a gap analysis to convince the board to pursue a shift from events and annual giving to major gifts and planned giving, allowing them to quadruple revenue in 10 years. 

Build Credibility with Donors

Discussing benchmarks with donors gives credibility and stature to your work with prospective major donors by allowing you to shift the conversation to return on investment. Sharing performance data from prior years gives donors an idea, on the cusp of a major campaign, of the return they can expect over the next few years. Foundations that share return on investment data with donors have found that the transparency builds significant trust that their donations will be well managed.

Create a Culture of Continuous Improvement

Benchmarking facilitates continuous improvement to raise more dollars and increase the impact that our efforts have, but it’s not a one-and-done undertaking. Truly data-driven organizations don’t just benchmark once, see where they rank, and move on. Instead, you should benchmark yourself regularly against your peers and your own previous performance, so you can revisit whether you have the right mix of activities, staffing levels, and investments to achieve your objectives.  

Some people are afraid to benchmark because they are afraid to uncover poor performance. But knowing where you stand now is the first step toward improvement.

As Pritchard-Kerr said during a recent AHP webinar on benchmarking, “You won’t know when you’ve succeeded unless you know your starting point.” 

For more information about how you can start benchmarking your own performance using AHP data, read about our benchmarking services.