Benchmarking is a data-driven management tool that can be particularly valuable to nonprofits that seek to compare current trends to historical or peer data. Read this article to learn how to perform a board benchmarking exercise and why it can be useful for making decisions concerning the board of directors.

“If you can’t measure it, you can’t manage it.” So goes the adage often attributed to management consultant and thought leader Peter Drucker, which succinctly summarizes why data and analytics are critical for any organization. This isn’t to say that only things that can be measured or quantified are valuable, but having a yardstick to measure performance against makes it easier to track progress and ensure success over time.

Benchmarking is a data-driven management tool that can be particularly valuable to nonprofit organizations across sectors. Benchmarking involves comparing a current data set to historical data sets or data from industry peer organizations. Nonprofit organizations can benefit from benchmarking in varied ways, from program evaluation and performance measurement to identifying potentially valuable partnerships and strategic alliances to developing a sustainable funding model. CCS also utilizes benchmarking during feasibility and planning studies to compare participant response rates. An area where benchmarking can be especially useful is when it comes to making decisions concerning the Board of Directors.

Methodology: How to Compile a Board Benchmarking Report

To develop a board benchmarking report, take the following steps:

Why Board Benchmarking?

Board benchmarking is just one type of benchmarking that nonprofits can conduct with regard to fundraising, but it can be one of the most important. A qualified, dedicated, and engaged board is crucial for any well-run organization. On top of a board’s traditional roles such as its fiduciary role (e.g. budget approval and financial oversight) and providing governance and strategic oversight, the board plays a central role in development. Ensuring adequate resources and building a culture of philanthropy is a key responsibility of nonprofit boards. Personal donations from board members are important not only to provide a reliable base of critical resources for the organization, but also because major funding sources and potential donors will take the board’s financial contributions into account when making funding decisions, some requiring 100% board participation.

Performance improvement is the ultimate goal of any type of benchmarking. Board benchmarking can help you identify where your board may be lagging behind as a source of motivation for change. If you know that your board members are not personally giving or soliciting donations on behalf of the organization at the level of peer organizations, decisions need to be made to improve outcomes. Board benchmarking can be used to make key decisions regarding board diversity (age, gender, race, professional background, wealth capacity, residence), the give/get policy for board members, board size, board meeting attendance policy, size of the fundraising committee, board term lengths, fundraising return on investment (development expenses as a percentage of total fundraising), and more.

Case From the Field

ADAPT Community Network (formerly called United Cerebral Palsy of NYC), for example, is a leading human service organization providing vital services and programs for people with developmental disabilities. It is one of the largest organizations of its kind. Most of its revenue comes from the New York state government but, partly due to the state budget deficit caused by the pandemic, ADAPT was looking to move towards a model with more of an emphasis on individual donations and philanthropy, starting with the board. CCS identified four organizations in the social and human services sector that were comparable to ADAPT in terms of size and the reach of their programs. One of the organizations also had a similar level of reliance on government funding. CCS looked at data like the size of the development department, fundraising expenses, development expenses as a percentage of fundraising, contributed revenue, contributed revenue as a percentage of total revenue, board giving participation rate, board give/get policies, total board giving, board giving as a percentage of total contributed revenue, and more. This data informed CCS’s customized recommendations and will continue to play an important role as ADAPT reforms its board and makes key board-related strategic decisions regarding its give/get policies, board meeting attendance policy, board size, and diversity.

Benchmarking is a valuable service that CCS, given its expertise and experience serving thousands of nonprofits across sectors, is especially well-positioned to provide. If your organization is interested in internal or external benchmarking or considering board engagement strategy more generally, CCS Fundraising offers a suite of services that can help. For more information, contact CCS today.