Imagine knowing exactly what your donors are thinking and being able to respond immediately. As a nonprofit organisation, wouldn’t this just make life so much easier?
At XP, it’s our goal to do just that! To make life easier for nonprofits so you can focus on your mission. For this reason, we want to talk about how you can make your donor feedback count.
I know what you’re thinking... impossible – my nonprofit has limited resources, I have no time, and I have thousands of donors, how am I supposed to be able to respond immediately/make changes accordingly?
That’s a great question, and hopefully, after reading this article, you will understand why customer feedback software is the solution and get answers to some of your questions about time, resources, and capacity. Then you can make an informed decision about whether or not customer feedback software will be valuable to your organisation.
The success of any non-profit depends on donors, funders, and their giving community. This makes it incredibly important to put the needs of donors at the front of their decision-making processes.
But how do you do that practically with all the challenges you may be facing as a nonprofit organisation?
In this article, you're going to learn about Microsoft Customer Voice and how it solves this problem. You’ll also find out why and how your nonprofit can proactively integrate it into your systems.
The challenge of nonprofit performance measurement
Nonprofit organisations have historically struggled with performance measurement and finding reliable ways to define their true success metrics. More than ever, nonprofits are being asked to respond to reporting requirements from funders, boards, and government stakeholders.
Understanding what leads to success is vital. It can determine whether your organisation secures funding, retains skilled staff, and builds long-term sustainability1. Yet many of the commonly recommended strategies were designed for the corporate or public sectors. They don’t always consider the unique challenges nonprofits face, or the different processes and metrics required to measure impact effectively.
Why nonprofits need success metrics and KPIs
So how can you get a clear picture of what’s driving your nonprofit’s success? And how do you design a performance measurement strategy that works in practice?
Research by Carnochan & Samples (2013) highlights the importance of using the best evidence available, including both external research and internal data. To make the most of internal data, nonprofits need staff capacity and strong data systems to analyse donor and program information. In other words, you need to be able to measure nonprofit impact and use that data to inform decisions2.
Of course, this raises questions for many leaders: What kind of evidence is best? How do we find the budget for better systems? And how do we avoid adding complexity without clear benefits?
How to start measuring nonprofit impact
The answer is to take it step by step. Start by focusing on the data most closely tied to your mission—your donors. By tracking donor-related information, you can create nonprofit KPIs that show whether you’re on the right track.
A survey of nonprofit managers found that organisations that set clear key performance indicators perform better. Metrics like donor retention rate, donor acquisition, growth of services, and program outcomes all provide a more accurate picture of success for managers, boards, and funders.
One of the most important metrics you can measure is donor happiness. When donors feel heard and valued, they not only give more consistently but also become advocates for your mission.
The Donor Happiness Metric
According to the Forbes Nonprofit Council, the most important metric that can play a role in the success of a nonprofit is Donor Happiness 3.
They say that:
Donors (customers) are the most important part of the mission. They are both the fuel, and an important marketing team. If donors aren’t happy and don’t feel very connected, they may give, but they will not promote your work. Hence, the best way to know if your donors are happy is simple: Ask critical questions and listen to feedback!
Customer feedback management is therefore vital to an organisation’s success, and surveys are a great way to collect feedback. Every point of contact with a donor is an opportunity to improve the organisations reputation with them and increase the likelihood of further support4.
Plus, when organisations take feedback to heart, it shows that they care about their donors’ needs and are willing to adapt and address them 5.
We have first-hand experience of this at XP. In the past, before managing our own customer feedback, we were very reactive to complaints. We were only in the know if something major had gone wrong. At this point, we could only fix things once they had been escalated, as we didn’t have an in-depth knowledge of our customers' perspective. Since we started asking the right questions in our customer surveys and sending them out regularly, we’ve gained a comprehensive view of how everyone is feeling – not just the top-level management. This has led to a considerable decrease in complaints because we now respond to people's feedback and suggestions immediately. This builds trust as our clients know we really care about how they are feeling and are responsive to their needs.
How customer feedback can help your Nonprofit:
- Improved donor relationships
- Understand donor needs
- Strategic decision making
- Allow for continuous improvement
- Grant and funding opportunities
The case for gathering feedback and actionable insights from donors seems obvious, however, the practice is still rare. According to one survey,
Out of 1,986 nonprofit leaders, only 13% have been able to turn customer feedback into actionable changes 6.
In addition, two-thirds of the respondents said that the greatest barriers to implementing feedback systems was limited staff time, resources, and/or it being “too complicated” or “too costly.”
But you know this already. The question remains – How do I overcome the cost, staff capacity and seemingly complicated technology of collecting feedback and gaining actionable insights?
From our 12 years of experience in working exclusively with nonprofits, we know that it is paramount that nonprofits have customer feedback software that is efficient, gathers data all in one place, and is user-friendly for both staff and donors. It also needs to be cost-effective and offer a return on investment.
XP has found that Dynamics 365 Customer Voice answers all these needs and is the most efficient solution for nonprofit organisations.