How to Conduct a Fundraisng Audit

fundraising audit 
Year-end fundraising preparation can get stressful. Not only is it the busiest time for fundraisers, but there is so much to do in terms of administration, planning and auditing. So once the craziness of holidays is over, the new year is a perfect time to perform a fundraising audit to check in with your strategies. 

It offers a great benchmark for the rest of the year and can be done either individually or with your team! Fundraising audits don’t need to be time-consuming or cost money. You should mark an annual fundraising review in your calendar to measure your success metrics over the past year and set your upcoming annual goals. 
 

What Is A Fundraising Audit

Use a fundraising audit to comprehensively assess your current fundraising efforts with the goal of identifying strengths and weaknesses. It is a tool that helps you properly analyze your fundraising efforts and determine areas of growth. 

The goal is to take a good look within fundraising programs and asking yourself if your time and budget are used in the most effective way possible.
 

Benefits Of A Fundraising Audit

No matter the size of your organization, performing a fundraising audit can provide great insight on 
  • Weaknesses or gaps in revenue generation and sustainability to be identified and addressed
  • New goals and objectives can help guide the organization toward greater sustainability and fundraising success
  • Confidence in the organization's financial management, as well as the board and staff’s role in raising funds
  • Gaining information regarding the organization's revenue potential and strategy
Approach your audit as a journey to align your fundraising with your mission, values and priorities and it can really help you adjust your strategy. 
 

How to Perform A Fundraising Audit

To start, create a spreadsheet with basic information about each "fundraising activity”, including:

  • Name of the fundraiser (Holiday Giving Blast, Summer Walk-A-Thon, #GivingTuesday Instagram campaign)
  • Purpose of the fundraiser (capture new donors from Facebook, activate lapsed donors), including the strategic goals you met/planned to meet.
  • Date/time range of fundraiser, including the time for planning and follow-up
  • Intended audience (social media followers, current donors, major donors)
  • The net income. Subtract the cost to run (staff time, marketing expenses, etc.) from the total raised

 

Include Donor Data & Other Analytics

Donor information is key for a proper fundraising audit. The way you analyze donor data depends entirely on your donor tracking system. Many nonprofits and charities choose to use CRM designed for nonprofits, while some smaller organizations use a spreadsheet. No matter your method, it is vital to track donor information for your organization’s reference. 

Review your data to find the following information and add it to your ongoing audit spreadsheet.
  1. Donor Data
  2. Total number of donors
  3. Returning donors (donors that gave without an extended lapse)
  4. Recaptured donors (donors that did not give for a period of time but returned)
  5. New donors
  6. Gift Data
  7. Average gift amount
  8. Number of major gifts
  9. Average amount of major gifts

This is especially easy to do if you have donor management software. With our customizable dashboard, you can use Driven to pull up all the information you need in a flash. 

What To Look Out For In A Nonprofit Fundraising Audit

You have to focus on three things: 
  1. Where are we now
  2. Where do we want to be
  3. How do we get there

You can address these questions by first looking at your fundraising results from the previous year, along with any internal and external factors. It would be beneficial to proforma a SWOT analysis of these different areas to understand what you are up against when building a new fundraising plan. 

SWOT or strengths, weaknesses, opportunities and threats looks at everything that could affect your performance in the following year. 

Strengths: positive internal factors that improve success. Like a great group of fundraisers, a well-stock studio or powerful donor management software. 

Weaknesses: Internal factors that need some work. Maybe you are low on funding, or have outdated equipment or don’t have the resources you need to grow. 

Opportunities: External factors that contribute to your success. Like a community in need of your services, government grants available to you, or business in need of a nonprofit partner. 

Threats: External factors that hurt your organization like COVID-19, budget cuts or an unengaged community. 
 

Fundraising Audit Checklist


Begin by reviewing your metrics

  • Overall growth in total dollars and donors 
  • Donor Lifetime Value (five years or more)
  • New donors acquired and lapsed donors
  • Average donation amounts
  • Donor and donation retention rates

Do some benchmarking to see where you stand

  • With your donors 
  • With your audience

Reflect on what worked and what didn’t work

  • Ask yourself why it didn’t work? What could have been changed? 
  • What worked well and how can you continue to work on that?

Set your strategies for success in the coming year

  • What are your KPIs (Key Performance Indicators)?
  • What specific SMART goals would you like to achieve? 
  • Do you need to adjust your budget or time to make it work? 

At the end of your audit, you should have a clear understanding of where you are, where you want to be, and how you plan to get there. It really can, and should be that simple and we have all of the dashboard analysis covered for you here at Driven.

Conclusion

Organizations perform a  fundraising audit to pinpoint areas of improvement in your nonprofit’s fundraising strategy. 

In addition to performing an annual internal audit, you should be regularly monitoring your data and your fundraising metrics. Having a donor management system with a customizable dashboard allows for instant monitoring of your fundraising progress. 

As an expert in data management, our team would love to show you how to monitor and manage your database. Reach out to us to learn more about Donor Driven and its ability to streamline your fundraising. 

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Fundraising Apr 9, 2021, 12:00 AM

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