You’ve sat in that meeting:  the one where a member of the board says “if the drug prevention coalition across town can raise $175,000 at their gala, why can’t we?”

Unknowingly, what your board member is offering is a benchmark comparison, measuring a peer institution’s performance against yours.

Comparing your organization to another can be very helpful to understand what the possibilities or best practices across the sector are.

Some of the healthiest organizations I have worked with regularly compare themselves to a group of institutions that they refer to as peer institutions. Most colleges and universities have identified peer institutions to follow.

If you don’t have a list of peer organizations that you regularly follow, I’d encourage you to develop one.  In fact, it’s helpful to develop several different types of peer institution lists. Depending on what you want to learn from other organizations, you might compare yourself to a different peer list.

Ideally, the more similar the organization is to your organization, the more valid the comparison will be.   A high degree of similarity allows you to have more confidence that the results that your peer institution has achieved are also likely attainable goals for you.

If you can’t find organizations that have a high degree of similarity, consider what it is you’d like to learn from your peers.  Is it what’s working in fees for service work? Is it whether or not they have a paid fundraising staff? The chart below will help you, depending on what you want to learn from your peers, to know what aspects of your organization need to be comparable in a peer organization. In other words, the type of peer organization you need varies depending on what aspects of your organizational structure or support you are hoping to learn from.

Types of Peer Organizations What You Can Learn From Them
Similar Mission: Organizations that serve a similar purpose, offer similar services, or serve a similar constituency. These institutions are often outside of your immediate market
  • What services they provide that you might also consider providing
  • Which services they charge fees for and how much they charge
  • How they measure success and evaluate their programs
  • Program efficiencies
  • Which regional or national foundations, corporations, and government agencies provide grant funding to them
  • Their funding model/mix
  • How they utilize volunteer services
Similar Budget Size Organizations
  • Staff size and structure
  • Salary comparisons, especially for CEOs
  • The number of fundraising events they hold each year
  • How they run major gifts or planned giving programs
Similar Geographic Market
  • Who funds organizations in your community (individual, corporate, civic, faith-based, and foundation funders)
  • When their events are scheduled
  • What types of events they have succeeded with
  • Which events your market is already saturated with (I used to work in a small community that reportedly had more than 150 golf tournaments. It was arguably not a good community to start a golf tournament in).
  • What their sponsorship benefits and the costs of those benefits—compare your sponsorship offerings
Similar age organizations
  • Organizations go through different life cycles and while sharing a chronological age with another organization is not a guarantee that your organization is going to be at the same stage of life cycle development, organizations of similar ages share some things in common. It’s helpful to keep in mind other organizations’ age when comparing. If you’re a start-up organization, it’s almost never helpful to expect the same results for your organization as what happens for an organization across town that is decades old.
  • If you really want to compare yourself to another organization across your town, consider comparing your organization at its historical juncture to another organization in your town at a similar stage in its organizational development.  What was it like when it was a start up?
Organizations with similar staff sizes
  • Fundraising results
  • Program service outputs

Once you’ve identified other peer institutions, there are several ways you can research them including analyzing their 990s on Candid.org (formerly Guidestar). You don’t have to have a paid account to pull electronic copies of 990s.

From the organization’s website, you can usually find their sponsorship opportunities for their upcoming events. Sometimes you can find audited financial statements.

Also, don’t hesitate to pick up the phone and call your counterpart at a peer institution.  Once when I was doing a benchmark report for a consulting client, I called several peer institutions and asked them to share information about their sponsorship benefits for a particular type of fundraising event which they all happily did. Your peers at your peer institutions can make wonderful colleagues and learning partners.  Be sure to offer to share your information with them as well.

Benchmarking is a great strategy for analyzing fundraising strategies and capacity, for understanding what your organization is capable of. Benchmarking can help in many other ways including in the process of strategic planning. Good benchmarking starts with finding appropriate peer institutions to use for comparison.

The next time some board member asks “If they can do it, why can’t we,” volunteer to find out! Research the other organization and report back to your board member. Do they have different staff structures or sizes? Are they a well-established organization when you are a new one? If the comparison isn’t appropriate, offer your board member information about why it’s inappropriate. Suggest some other organizations to do a benchmark comparison against instead. Or maybe the next time your board member asks the question, you’ll learn that you can do it too. Wouldn’t that be great?!?

Photo:  Bigstock/com/mdworschak. Used with permission.

Never miss a Davis Nonprofit Consulting Blog Post
Subscribe by Email or Read via RSS:

Subscribe to Blog via Email

~OR~
Subscribe via RSS here!