As we talk to more and more organisations about benchmarking there are a few classic excuses that people give for not adding benchmarking to their to do list. Now don’t get me wrong I’m all in favour of being cautious about what else one chooses to take on but some of the reasons given just don’t stand up to scrutiny so we’re going do a series of posts to to pop a few balloons. Of course if you disagree with us or think there’s something we’ve not considered then we’d love to hear from you.
The second reason given is really a misunderstanding of how benchmarking is useful. In order to benchmark you of course need to enter your own data into the system (it takes about an hour from scratch). One of the immediate pieces of feedback you get as you fill the form in is that it turns your figures in £ into percentages of income allocated to the various different income and expenditure lines on your profit and loss sheet. This is useful because it helps people to remember the ratios of the different income types.
It is however only the tip of the iceberg in terms of what the Culture Benchmark (and also the Charity Benchmark and RFO Benchmark) offer indeed if this was all it did that wouldn’t be worth a lot because of course you do indeed already know what all your data looks like – where the income comes from, how far it goes in terms of the way you spend it.
Benchmarking expands your vision beyond your own data set. Instead of only being able to compare your data to your previous year or having to search out pieces of data from say the Charity Commission, the Culture Benchmark enables you to compare your business model anonymously and confidentially with other organisations like yours. This means that you can look at how the ‘best in class’ do things and use this to set new goals for your own organisation.
For example you might achieve say 5% of your income from trusts & foundations how do you know whether this is better or worse than others in your area of work. If you don’t know this then you might set a target of growing this to say 7% and be pleased when you achieve it. However if the average across your peer group is say 12% and they are aiming to grow to 15% this puts your figures into a very different context doesn’t it?
Alternatively you might be looking to reduce some of your costs and might be considering cutting your marketing spend from 3% of turnover to 2% (excluding marketing staff costs). However if the data shows that the organisations who achieve greatest ticket sales or audience figures are spending say 5% of turnover on marketing then you might think twice about it.
If you benchmark your organisation then not only can you see where your strengths and weaknesses lie but you will also have a much stronger set of messages to communicate to funders and other stakeholders about your successes. It is way more powerful to say that you are quantitatively best in class at A or B than to simply say that you’ve had a good year and A or B have increased/decreased as forecast.
As part of the MMM re.volution programme we’re able to give 50 re.volution peers a free six month subscription to the Culture Benchmark and this also comes with a degree of phone support and you’ll see us at MMM events so we can help you work out which clusters to join and what comparisons to make. For those who are paying subscribers we also offer a degree of support in working this stuff out, after all we want to make sure you get the most out of a subscription.
If you are a part of a non-profit arts organisation that wants to find out more about benchmarking your annual data then we are running free half day workshops in Birmingham on Tuesday 26 June sign up on eventbrite and in London on Monday 2 July also register for your free place on eventbrite.