Nonprofit KPIs

KPI Performance Key

Your business may just be beginning to track this metric, perform this business function or identified this as a problem. Improved execution in this area should be a high priority.

Your business is competitive in this area, but there’s still room for advancement. Consider investments to improve related operations to achieve better results.

Your performance in this area is considered best in class and is superior to the average company in your sector. You’ve laid a solid foundation in this business function, and the next step is optimization.

You’re achieving the optimal results for this metric. Your business processes in this area are highly efficient and stand out against competitors. Keep investing in this area to maintain these results.

Top Performers

Administrative Expense %

Administrative expenses are incurred in a nonprofit’s overall operations and management, including employee salaries, payroll taxes, benefits, office rent, utilities and office supplies. But these administrative expenses are essential for your organization’s infrastructure and its ability to fulfill its mission. It’s important to optimize this percentage to provide the overhead necessary to meet your mission, but not take away from the organization’s cause.

> 22%
Foundational
17%
Competitive
9.4%
Best in class
7.5%
Transformative

Charitable Contributions

Nonprofit

$410.02B

Donated in 2017

Read more here.

Source: Charity Navigator

Left Quote
Email represented 28% of all online donations in 2017.”

Read more here.

Source: M+R

Program Expense %

Nonprofit expenses are reported by purpose using a process called functional expense allocation. Program expenses are ones that support the nonprofit’s defined mission statement. For more established nonprofit organizations, these expenses are typically the majority of the overall expenses for the organization. This shows potential donors, fund sources, regulators and boards that the largest allocation of expenses is going towards supporting the mission, rather than toward administrative and similar expenses.

< 50%
Foundational
62%
Competitive
81.4%
Best in class
> 81.4%
Transformative

Donor Retention

New donors are more costly to acquire than retaining a relationship with donors that continue to contribute to your organization. That’s why it’s critical for nonprofits to focus on strategies to keep new and existing donors coming back year after year. A high donor retention rate is a sign of a nonprofit that has loyal supporters that truly believe in its mission and believe the organization is effective in delivering on that mission. Higher donor retention can be achieved through building meaningful relationships, showing appreciation for their support and excellent donor communication.

< 45.5%
Foundational
45.5%
Competitive
60%
Best in class
> 60%
Transformative
Foundational
Competitive
Best in class
Transformative

Administrative
Expense %

> 22%

17%

9.4%

7.5%

Administrative Expense %

Also referred to as the Overhead Ratio, this metric indicates what percentage of total expenses are devoted to administrative costs. The lower this percentage, the more efficient the use of nonprofit funds.

Time to Close
the Books

> 10 days

7 days

5 days

< 5 days

Time to Close the Books

How many days it takes your finance team to produce a Profit and Loss Statement, Balance Sheet and other analyses so that managers can understand how the business performed for that period (typically monthly). The fewer days, the more efficient the finance team.

Program Expense
Management %

< 50%

62%

81.4%

> 81.4%

Program Expense Management %

Program expenses refer to costs related to providing the nonprofit’s programs or services in alignment with its defined mission. Program service expenses generally represent the majority of expenses incurred in a nonprofit organization.

Days to Complete the
Annual Budget

> 40 days

40 days

30 days

25 days

Days to Complete the Annual Budget

How many days it takes the finance team to produce an annual budget. A faster budget cycle time indicates a more efficient finance team.

Frequency of
Visibility into
Budget

Yearly

Quarterly

Weekly

Real-Time

Frequency of Visibility into Budget

How often executives and managers are able to review and analyze actual financial performance versus budget. A higher frequency allows for improved financial and business performance.

Fundraising
Expense %

> 17.5%

17.5%

7.9%

< 7.9%

Fundraising
Expense %

Fundraising expenses are the costs of all activities that relate to raising financial support for donor contributions. Can include fundraising event costs, solicitation of contributions or salaries of employees responsible for fundraising. This metric represents the percent of total expenses that go toward raising funds.

Annual Donor
Retention

< 45.5%

45.5%

60%

> 60%

Annual Donor Retention

This percentage represents the proportion of donors that have given more than once. A higher donor retention rate indicates more long-term supporters.

IT Cost as
% of Revenue

> 4%

3%

2.5%

2%

IT Cost as % of Revenue

Dollar amount spent on IT infrastructure and IT teams as compared to total revenue. The lower this percentage, the higher the IT efficiency.

Finance FTEs
per $100M Rev

> 10.6 FTE

10.5 FTE

7.3 FTE

4.3 FTE

Finance FTEs per $100M Rev

A calculation of how many FTE (Full Time Equivalent) Finance department resources are required for each $100M in revenue earned.

Source(s): APQC, Finlistics, Charity Navigator

Other Categories
Also referred to as the Overhead Ratio, this metric indicates what percentage of total expenses are devoted to administrative costs. The lower this percentage is, the more efficient the use of nonprofit funds.
How many days it takes your finance team to produce a Profit and Loss Statement, Balance Sheet and other analyses so that managers can understand how your business performed for that period (typically monthly). The fewer days this number is indicates a more efficient finance team.
Program expenses refer to costs related to providing the nonprofit’s programs or services in alignment with its defined mission. Program service expenses generally represent the majority of expenses incurred in a nonprofit organization.
How many days it takes the finance team to produce an annual budget. A faster budget cycle time indicates a more efficient finance team.
How often are executives and managers able to review and analyze actual financial performance versus budget. A higher frequency allows for improved financial and business performance.
Fundraising expenses are the costs of all activities that relate to raising financial support for a contribution to the nonprofit organization. This can include costs of holding a fundraising event, solicitation of contributions, or salaries of employees responsible for fundraising. The Fundraising Expense % represents the percent of total expenses that go towards raising funds for the organization.
This percentage represents the proportion of donors in your base that have given more than once. A higher donor retention rate indicates more long-term supporters of your organization.
Dollar amount spent on IT infrastructure and IT teams as compared to total revenue. The lower this percentage is indicates higher IT efficiency.
A calculation of how many FTE (Full Time Equivalent) resources managing the Finance department are required for each $100M in revenue earned.
KPIs

Parameters

Your business may just be beginning to track this metric, perform this business function or identified this as a problem. Improved execution in this area should be a high priority.

Your business is competitive in this area, but there’s still room for advancement. Consider investments to improve related operations to achieve better results.

Your performance in this area is considered best in class and is superior to the average company in your sector. You’ve laid a solid foundation in this business function, and the next step is optimization.

You’re achieving the optimal results for this metric. Your business processes in this area are highly efficient and stand out against competitors. Keep investing in this area to maintain these results.

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