Development Audits (or Development Assessments depending on who you talk to) are a genuine way to get a clear and logical snapshot of the overall health, effectiveness and efficiency of a fundraising organization. Furthermore, depending on the objective of the organization being assessed, the audit can include a review of the overall business operation, including organizational structure, business processes, marketing efforts, positioning in the marketplace, employee and volunteer staffing and so on.

All nonprofit organizations, especially those relying on fundraising as their primary source of revenue, will benefit from this top-down review of their operation. But we can’t wait until the train falls off the tracks – the best plan is to conduct a periodic review, every ten years at a minimum, to ensure that the organization, especially the fundraising efforts, are on the right track and going in the right direction.

Some of the symptoms that might prompt you to consider an audit include: declining response rates to direct mail or other marketing plans, increased costs and overhead, stagnant giving levels across any level of donor, increasing attrition, complaints from donors, shrinking database size, fewer major gifts and a reduction in planned gifts.

It could also be prompted by a lethargic environment in the organization that is reluctant to tackle the new challenges and complexities of the nonprofit world or simply an employee base that lacks skill, motivation, energy and a general inability to embrace innovation. These are all signs of a dying organization that may need to face significant challenges.

The fundamental focus of a good audit will look at three primary areas of the fundraising process:

1) How donors are acquired,

2) how they are retained and most importantly,

3) how the relationships are cultivated.

Of course this is rudimentary at first glance but this tree-top view is where the review process must begin since successful fundraising rests in the health of the portfolio of benefactors. The review will simply drill down through these three primary areas and assess the health of the database by looking at trends and historical data pertaining to metrics such as retention, gift frequency, response rates to marketing efforts, return on investment of programs, costs to raise a dollar, average gifts, and so on. It will also dig into how the marketing and fundraising efforts are conducted by measuring them against best practices, industry trends, emerging techniques, and historical data, etc.

Additionally, it will look at the fundraising channels being used – including direct mail, special events, advertising, online, etc. and assess their individual and collective effectiveness on the fundraising program. Perhaps most importantly the review will take all of this into consideration and formulate a high level summary of pros, cons and recommendations for moving forward.

A development audit really boils down to a periodic maintenance check-up just like you do with an automobile. We wouldn’t dream of totally neglecting our car no matter how well it works; preventive maintenance and foresight is always the best maintenance. It can uncover existing problems as well as potential problems or problems that are developing and need some sort of attention.

We can always conduct these reviews our self but there is nothing like an outside, objective perspective from an unbiased party to help us evaluate things more clearly.