It's Time for FEP & RFM
As many not-for-profits are nearing the end of the fiscal year, we are all wondering:
“How well did we do this year?”
“What do we look at?”
“What do we measure?”
“How do we report to our Board and Advancement Committee?”
Obviously, we want to report on Donors & Dollars. But, is that all that we should be looking at? How do we take our performance, report it in reasonable metrics, and use what we learned to move into a positive direction for the upcoming year?
Two tools we use with all our clients are:
The Fundraising Effectiveness Program (FEP) Fundraising Fitness Test which is available from The Association of Fundraising Professionals (AFP), http://afpfep.org/ and,
A Recency, Frequency, and Monetary (RFM) Analysis of giving for the last three to four years. There are a lot of references to the RFM process available on the internet, but we found the easiest to understand--with step by step instructions on how to perform the analysis--is at RFM Instructions.
Why these two tools?
The Fundraising Effectiveness Program (FEP) creates a series of reports that benchmark our progress against others in our field. We can compare our results to national organizations, organizations in our sector and size, and find true “peer” comparisons for our work. When used year to year, these reports can show progress (or areas to improve) that are standardized for comparisons. The templates are all there and the intelligence they provide are strategic and informative. The suite of reports also includes the opportunity to create some “what-if” scenarios (Growth in Giving Reports) targeted to various giving levels and donor segments. These reports allow us to look at the areas requiring improvements and determine outcomes we could achieve if we focused attention and resources on those areas. And, it’s free!
A Recency, Frequency, and Monetary (RFM) Analysis identifies and quantifies those donors who are most important to us and those donors that present opportunities to re-engage or improve in relationship to mission. This requires some time and effort on your part, but the investment of effort is well worth the time involved in undertaking the analysis. On the simplest level, the analysis helps us to determine with whom and why we need to spend time and resources engaging certain donors in the upcoming year. We can determine simple Donor Categories and Donor Segments to use in the upcoming solicitation cycles that are based upon proven donor results and actions. With a little more thought and creativity, a properly done analysis becomes our script for all our actions in the upcoming year including Annual Fund, Major Donor Effort, Planned Giving, Prospecting and Events. We can set Targets, Engagement Strategies, and other Actions based upon the donors proven relationship to our mission.
If you are familiar with and use these two tools, please write to me and let me know of your experience.
If these are new to you, please add them to your toolbox and use them. They really will make a difference in your work this coming year.
Hope you are ready! It is time for FEP and RFM!
Thom M. Digman, CFRE is a Principal of The Digman Network, founded in 2004, a full-service Advancement Advisory and Consulting firm specializing in mission-driven not-for profit organizations. Their services maximize an organization’s strengths while respecting its unique mission, charism, aspirations and needs. They focus on the fundamentals that are grounded by their professional principles, experience learned throughout long careers in Business, Public Service and Philanthropy, and informed by multiple and varied engagements.