Performance Benchmarks for Non-Profits
It is important for any business, whether for profit or not, to have financial benchmarks against which to anticipate potential performance and to measure results once operations have started.
The first tool every small business should look at is the Industry Canada SME Benchmarking Tool (formerly Performance Plus). This online resource provides income and expenditure data by NAICS (North American Industry Classification System). For more information on this resource see our Research Guide: Financial Ratios
While this tool is helpful there is an even better resource specific to non-profits. It is the Canada Revenue Agency’s Registered Charity Information Returns.
All registered charities are required to submit these returns. The resulting resource allows you to find out detailed information on income, expenditures, assets, and liabilities by individual charitable organization. The search options provided on the Canada Revenue Agency web site make it easy to focus on specific criteria. You can examine the performance of other organizations in your focus area or your community, or search by individual charity name.
You can use the financial information to examine your peers on their own or as raw data from which to compile your own benchmarks.
For example if you were interested in starting a charitable organization in Saskatchewan that focused on animal protection you can use the search function to retrieve a list of organizations that meet those two criteria.
From the resulting list, you can then manually compile the data in an EXCEL or OpenOffice.org Calc file. Yes, I said manually! If you are looking for free data, you have to be prepared to spend some time. Students, sons or daughters can be an effective resource if you are not inspired by the thought of entering numbers in a spreadsheet. As long as you keep your search criteria focused and do not try to compile information for all of Canada, the process should not be too onerous.
In about 30 minutes of work, I was able to determine that the median amount of money raised through fundraising alone in 2008 by animal protection organizations in Saskatchewan was $34,515. The average amount raised was $71,741 and the total for the “sector” was $1.1 million.
If you are not sure how to calculate median and average, use the help feature in EXECL or OpenOffice.org Calc. It will guide you through the whole process.
You can then examine individual organizations that perform above the median in your subset more closely to determine the factors that influenced their success such as community-size, number of employees, advertising and promotion budgets etc.
Of course your benchmarks do not need to be restricted to just fundraising. You can compile data on any of the revenue or expenditure categories covered in the Registered Charity Information Returns.
Combined all this information can be used to help create realistic cash flow projections and to plan your non-profit business operations effectively.