5 Common Misconceptions About Benchmarking Data
Jasmine Jones and Jacqueline Walsh
Adapted from “Using AHP’s Benchmarking Data Webinar” featuring AHP Board Members Randy Varju, MBA, FAHP, CFRE, Chief Development Officer and Foundation President at AdvocateAurora Health Foundations, and Jory Pritchard-Kerr, FAHP, Executive Director at Collingwood General & Marine Hospital Foundation.
Since 1984, AHP has published the annual Report on Giving and it continues to be a fundamental tool that our members to improve their fundraising performance. Participants in the Report on Giving study also have access to a benchmarking database that allows them to customize comparison groups and view their data against standards they set for themselves. Resources like these are essential for adapting to the dynamic nature of philanthropy in health care, but why should we compare our data in the first place, who has the time to do it and where do we even begin? Here are five common misconceptions about benchmarking to answer any concerns you may have as you learn what works best for your operations.
1. “We’re a small shop, so don’t have the resources to participate.”
The Report on Giving survey is a commitment for all participants, especially for those from small organizations who may have their priorities set in more urgent matters of their operations. However, long-term participants from smaller entities advocate for the internal benefits of benchmarking. Jory Pritchard-Kerr, FAHP, has participated in the survey for more than 10 years with her team from the Collingwood General & Marine Hospital Foundation.
“I just find it frustrating that more small organizations are not taking the time to do this because it’s really a good tool that AHP offers to us that you’re not able to get anywhere else,” she expressed when speaking to those who are on the fence about participation.
In her experience, Pritchard-Kerr uses benchmarking data to compare her organization to itself. This is especially helpful when she’s communicating her team’s needs to her board, demonstrating how they have maintained their performance during critical times, like in a capital campaign.
“One of the things that I hear a lot from people who aren’t participating in this program is they’re afraid of the information that their board will find out,” she said. “You can’t be afraid to have that conversation with your C-suite or with your board and tell them that this is all about improving.”
2. “Starting the benchmarking process is a lot of work.”
Beginning your journey using benchmarking data is a huge first step to improving areas that need work and developing your current practices. It may not be easy to get the ball rolling, but the advantages far outweigh this disadvantage. Randy Varju, MBA, FAHP, CFRE, spoke about the hurdles his team from AdvocateAurora Health faced in the beginning.
“I don’t want to make it sound so easy, because it is a lot of work,” Varju said. “It’s not easy to pull the reports necessary to submit the data, but I can honestly say that it has been worth it in our case because we’ve used it accordingly and we’ve valued what is has shown us. It can sometimes be a little overwhelming when you get all of the information at once, but it’s not so much where we rank compared to others, it’s how do we compare against our own standards?”
Pritchard-Kerr continued on this point about the benefits of using benchmarking as a new user.
“You don’t have to jump totally into the big benchmarking tool,” she said. “The Report on Giving is a light version of benchmarking but it’s also a lot easier to understand the data. Don’t be afraid of the numbers, stick your toe in, do the ROG and learn from it. And the other thing is, you can contact other participants and ask what they’re doing. That’s a really valuable piece of product.”
3. “We don’t see how benchmarking data will benefit us in the short term.”
If you break down the definition of benchmarking, it really means comparing processes or performance to a standard. Our main goal with the Report on Giving is to help you figure out how you are performing against your peers in the industry and how you can improve upon your practices. Of course, this means measuring your performance more than once, but having a starting point to know where you currently stand is important.
“There’s no substitute for just stepping on the scale and knowing where you are currently and then determining from that first effort what you want to improve,” Varju said. “It gives you a roadmap for what you need to address and how you might go about chipping away at some of those real challenges that exist in the environment that you’re in.”
“You don’t know what’s effective until you find your starting point,” Pritchard-Kerr added. “How do you know for sure and how do you know whether you’re improving if you’re not measuring the same thing year over year over year? That’s really what the ROG and benchmarking forces you to do, so you know that you’re getting consistent data back out of it.”
4. “Our organization is very set in its practices. We don’t think participation will change anything.”
The reality of today is that we are influenced by the data around us, whether we use it to follow someone’s idea or bring others to follow our own ideas. The same goes for your organization’s performance: how are you going to make the appropriate changes if you don’t have the proper data to use? Over the years, benchmarking users have taken their findings to a new level, from influencing changes in their operations to assisting them in conversations with new partners. Varju elaborated on this point from the system perspective of completing a merger and how it works as a collaborative process.
“I think the importance of benchmarking is something that we’re fortunate we’ve been doing for some time,” Varju said. “It brings a common understanding to the science behind the work that we’re doing, and we’ve determined what measurements we really want to improve or really want to assess, evaluate with some of our partners, and determine what our appropriate range would be based on our capacity.”
“It’s an excellent tool to bring out to speak to new prospective major donors, especially those people who have been in the industry and are used to good, sound financial practices.” Pritchard-Kerr pointed out while she spoke about the changes she saw this year. “We’ve been able to speak to them about multiple million-dollar gifts, which has really made a difference to our returns. It’s about making sure that you’re resourced in the right areas to push those gifts forward. We have the right mix right now with staff and they’re allocated properly.”
5. “Presenting this data to our board, staff and donors is difficult.”
Our world is driven by data and all of our decisions are determined by information that we exchange with others. Varju touched on this as he discussed building a high-performance culture in his team.
“There are certain standards and accountabilities that are part of our team dynamic and they help identify what those key lead indicators or activities will be that drive these outcomes based on the data,” he said. “Our results are reflective of the geography that each of our teams represent. With 27 different hospitals, we’re in different dynamics, so when we benchmark against ourselves, we’re able to find those common metrics that will determine what those critical outcomes could be.”
Benchmarking is a great way to be transparent with your donors and boards, simply by sharing your findings and making your case for support. Pritchard-Kerr addressed this point.
“We use it as a teaching tool for our board members,” she said. “It’s something to make them understand how revenues can fluctuate, especially during campaign cycles, and we want them to understand exactly a long-term look of what’s going on.”
Pritchard-Kerr and her team track back 10 years in their data and share their trends every year with their board.
“By using the benchmarking data, we can validate to our board what is happening across the industry and use it as a tool for them to determine whether the investments we’re asking for are valid and will pay off in the end.”
The most recent edition of the Report on Giving is available on AHP’s website.