2 . Projected year-end cash . Based on the current cash position plus budgeted cash flows through the end of the fiscal year , this project ’ s liquidity and ability to satisfy upcoming commitments .
3 . Year-to-date revenue and expense . These KPIs measure your actual results against your budget and let you know separately if revenues and expenses are in line with expectations or within a reasonable range — say 10 %.
4 . Reliance ratios . To determine your organization ’ s reliance on a specific type of funding ( for example , government grants or individual donations ), divide the amount of that funding by total income .
5 . Cost per dollar raised . This measure shows your return on investment in fundraising costs . To get this KPI , divide the total funds raised by the total fundraising expenses . You want a figure greater than “ 1 .”
6 . Cost per unit of service . Divide program expenses by the number of units of service ( for example , meals served ) provided in a period to shed light on that program ’ s financial efficiency .
7 . Program efficiency ratio . This ratio assesses an organization ’ s mission efficiency by showing the amount of funding that goes to programs ( versus administrative or other expenses ). Compute it by dividing a program ’ s expenses by its overall expenses . The goal is often over 75 %, but this is dependent on the organization type . Something to note is there is debate about the accuracy of this ratio .
Nonfinancial KPIs Don ’ t stop with just financial KPIs . Nonprofits can use KPIs in nonfinancial areas of the organization such as :
Risk management and governance . Track Form 990 filing compliance ( completeness and timeliness ), on-time completion of board and employee training , board engagement and board composition ( constituents and skill sets ).
Program and service delivery . This delves into the number of clients served , staff utilization rates , client satisfaction and volunteer hours .
Outreach and advocacy . This KPI covers the number of public events , number of volunteers , response time to inquiries and advocacy presentations / events .
Marketing and communications . Track the number of unique website visitors , social media followers , social media engagement and your Net Promoter Score .
Human resources . Evaluate employee retention , how long it takes to fill vacancies , the timeliness of evaluations , and salaries and benefits compared to a compensation study .
Technology . This KPI studies the economic value added by technology , the total cost of ownership and timely data entry .
Meaningful Numbers Just tracking numbers won ’ t be meaningful for your board members . Solicit input from them . Although they might not name specific indicators , their priorities can create appropriate KPIs you can use to facilitate informed , timely decisions .
Doeren Mayhew ’ s CPAs and advisors specialize in working with nonprofit organizations to help them create and implement KPIs to closely monitor their overall financial position . To obtain assistance with developing KPIs for your nonprofit organization , contact us today . ■
Issue 2 | 2022 VIEWpoint 7