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Nonprofit Fundraising Metrics for Optimal Impact

Nonprofit Fundraising Metrics for Optimal Impact

Evaluating campaign performance is crucial for achieving your charity's mission. Metrics and Key Performance Indicators (KPIs), especially when utilizing tools like Paybee, offer valuable insights for your fundraising event. Tracking progress and benchmarking goals against other nonprofits helps create a continuous improvement loop, positioning your nonprofit for sustained success.

The Significance of Measuring Campaign Performance Using Metrics

Evaluating campaign performance is extremely important when working towards fulfilling your charity's mission and vision. Metrics provide essential insights and perspectives that can make a significant impact. Utilizing tools like Paybee enables you to collect precise data about your organization's performance, empowering you to make well-informed decisions that guide your nonprofit in the right direction.

Through Paybee's tracking features, you not only set benchmarks for your campaign but also gain the ability to measure your progress in comparison to other nonprofits. Measuring campaign performance creates a continuous feedback loop- this loop facilitates ongoing improvements, positioning your nonprofit for sustained success.

What Are Non-Profit KPIs?

KPIs serve as a numerical measure designed to assess how effectively a non-profit organization is fulfilling its mission- non-profit metrics quantify the organization's varied initiatives aimed at expanding its societal impact. The essence of non-profit KPIs is comparable to those in for-profit businesses, both aiming to secure a larger market share. However, non-profit entities generally focus on developing KPIs that assess societal influence rather than revenue.

Choosing the Right Non-Profit Metrics

While many organizations recognize the importance of selecting and measuring meaningful KPIs, applying this principle can be challenging. With hundreds of metrics to choose from, inadequate vetting can result in too few or too many KPIs, which may lead to chaos.

Identify non-profit metrics: Strive for a balanced group of KPIs.

Leading and lagging metrics: Distinguish between leading measures predicting future performance and lagging measures reporting past performance.

Efficient and effective metrics: Use measures demonstrating resource utilization and effectiveness in achieving desired results.

Cross-sectional metrics: Choose measures that encompass all organizational activities.

Ensure that your non-profit KPIs align with the SMART criteria, ensuring they are Specific, Measurable, Attainable, Realistic, and Timely.

Allocate weights to your non-profit KPIs by assessing the relative importance of each metric- Provide higher weight to funding and volunteer-related metrics due to their substantial influence on the organization's long-term success and prosperity.

Verify non-profit KPIs against the big picture: Regularly review the validity of chosen metrics to find a balanced and weighted approach.

Select Target and Stretch Values for Each Non-Profit Metric

Use target and stretch values when assigning goals to each KPI, designating success for reaching the target and leadership for achieving the stretch number.

KPIs Must Be: Carefully chosen, accurately measured, and consistently monitored.

Non-profit Metrics Baseline: Establish a baseline, identifying a reference point for future comparisons.

Regular Review with Team: Regularly review non-profit KPIs with team members to foster accountability and gather feedback.

Analyze Non-profit Metrics: Interpret data without bias to understand the organization's current state.

Act on Non-profit KPIs: Make affirmative decisions based on accurate metrics to identify opportunities for maximization and optimization.

For precise decision-making, ensure that the data used to monitor KPIs are up-to-date and of high quality. Opting for a solution such as Paybee software allows you to consolidate data from various databases, ensuring a single version of the truth across your organization.

General Nonprofit Fundraising Metrics

Nonprofit organizations pursue their objectives by acquiring resources aligned with their goals. In the fundraising context, it is imperative to go beyond mere fund collection and critically evaluate the effectiveness of various metrics. Let's explore some important metrics that provide valuable insights for nonprofit fundraising endeavors:

Cost Per Dollar Raised (CPDR)

CPDR stands as one of the most extensively used metrics in the nonprofit sector, and its widespread usage is well-justified. For a nonprofit organization, the core objective goes beyond simple fund-raising; it entails securing resources that harmonize with the mission. Contrary to a common misconception, fundraising doesn't consistently translate to financial gain; in some instances, it may signify the opposite!

CPDR acts as the measuring tool for calculating the funds designated for fundraising activities. If the total funds raised fall short of covering the associated expenses, it serves as challenging news for your organization, signifying a potential need to curtail costs. To address this, consider minimizing expenses tied to specific fundraising events and explore more comprehensive alternatives to attract donations, such as establishing a fundraising website.

Numerous nonprofits calculate CPDR by dividing their expenses by revenue. For instance, if your fundraising expenses, covering staffing costs to marketing activities, amounted to $25,000, and you raised $100,000, then your CPDR would be 25,000/100,000 = 0.25, equivalent to 25 cents per dollar raised.

Conversion Rate

Conversion rates reveal the percentage of page viewers who take a prompted support action from your media content. These support activities comprise subscribing to email updates, signing petitions, making donations, or becoming a member of your nonprofit- for instance, if 100 individuals view a donation page and 10 of them proceed to donate, your conversion rate would be 10% (10 / 100 x 100). This demonstrates the percentage of viewers who responded to your donation prompt.

Gifts Secured

The gifts secured metric simply tracks the number of gifts your nonprofit received within any given time frame, whether it's one month, one year, or three years. Select a time frame that suits your nonprofit, with one year being the standard choice.

For a more in-depth analysis, you could explore "major gifts received" if your fundraising strategy focuses on major gifts. Moreover, you could break down the donor base and analyze gifts obtained per donor segment. To calculate, just add up all the gifts received within your chosen period.

Matching Gift Revenue Received

A considerable number of donors have the chance to take part in corporate matching gift programs provided by their employers. When your supporters make donations to your cause and go through a brief submission process to request a matching gift on your behalf, they essentially double the impact of their contributions to your cause.

To figure out the total revenue collected through these programs, take note of each donation that comes in as a corporate matching gift. For easier calculations, you can even encourage donors to keep you updated on the status of their matches online (matching gift request submitted, match approved, funding paid out, etc.). At the end of a specific period, usually a year, add up the contributions from each matching donation received.

Subsequently, analyze the annual matching gift revenue to understand its increasing impact on your organization. To calculate this, determine the matching gift revenue collected in one year, subtract the total match revenue from the previous year, and then divide the result by the total match revenue from that preceding year. Multiply this quotient by 100 to obtain the percentage growth.

Keeping track of matching gift metrics allows your organization to determine the funding made available through corporate donation-matching initiatives. Additionally, company matches effectively represent "buy one, get one free" donations that directly boost the return on investment (ROI) of your fundraising efforts.

Percentage of Total Revenue from Different Donor Segments

When you categorize your donors based on similar characteristics, you can assess the influence each segment has on the overall sustainability of the organization. To execute this, begin by selecting criteria for segmentation, such as first-time, high-level, and recurring donors. (Tip: Utilizing automation software enables you to establish intelligent logic for automatic list population!)

Once your lists are established, analyze the impact of various segments. For instance, what proportion of your revenue is contributed by first-time donors compared to recurring donors? What donation size is more or less common for your organization?

Calculation Method: (Total sum of gifts from a specific donor segment / overall revenue collected) × 100 = percentage of revenue from donor segments

By segmenting your donor base and evaluating fundraising effectiveness in this manner, you can strategically allocate resources. While it's not advisable to depend solely on the generosity of a single segment for your organization's survival, calculating the revenue breakdown by group enables you to create focused campaigns and mobilize key segments to maximize impact.

Donor Relationship KPIs

In the world of nonprofit organizations, how well you handle relationships with donors is crucial for long-term success. To navigate this effectively, we use Key Performance Indicators (KPIs) – important measures to evaluate how our fundraising and engagement strategies are working. In this section, we'll dive into Donor Relationship KPIs, which are like guideposts helping you understand and improve donor retention, growth, and the overall value they bring to your organization.

Donor Churn Rate

Churn serves as a valuable metric to evaluate the net impact of your donor retention and recruitment efforts. It provides a quick insight into whether your organization is gaining or losing donors overall. While new donor counts and retention are often analyzed separately, making them seem disconnected, churn simplifies the data, indicating the direction of your active donor counts. 

The calculation involves determining the ratio of lost donors to the initial count and multiplying the result by 100 to express it as a percentage- for instance, if you started the month with 120 donors and lost 15, your retention rate would be 87.5%, and your churn would be 12.5%.

Donor Retention Rate

Similar to churn, donor retention rate stands out as an important metric for evaluating the overall effectiveness of your endeavors in both retaining existing donors and acquiring new ones. It provides a swift evaluation of whether your organization is witnessing a net increase or decrease in its donor base in a consecutive year. Although new donor counts and retention are frequently analyzed separately, the donor retention rate streamlines the data, offering a clear direction for your active donor counts.

To determine the donor retention rate, the calculation involves identifying the donors from the previous year who have also contributed this year. Next, divide this number by the total count of donors from the previous year and multiply the result by 100- if you had 150 donors supporting your nonprofit in 2022, and retained 120 that continued to contribute in 2023, your retention rate would be 80%, showcasing a solid donor retention performance.

Donor Growth Rate

While holding on to existing donors is vital, it doesn't lessen the importance of expanding your supporter base. This metric helps assess how successful your efforts are in attracting new donors and measuring the depth of their engagement. An increasing donor growth indicates positive momentum, while a standstill or decrease calls for a closer evaluation to identify areas for improvement before potential losses occur.

Determine your donor growth rate by deducting the number of donors you had last year away from this year's count. After that, divide the resulting number by the donor count from the previous year, and to get a percentage, multiply the outcome by 100- if you had 500 donors last year and increased to 600 this year, your donor growth rate would be 20%.

Donor Lifetime Value

Donor lifetime value is an important measure that every fundraising organization should pay attention to- understanding this metric well can make a big difference in your fundraising efforts. It gives you helpful insights for setting goals and making smarter budget decisions.

Think of the average donor lifetime value (LTV) as a tool to estimate how much a donor might donate before they stop giving. This metric doesn't just measure the value of a donor to your non-profit; it also checks if the cost of getting that donor is reasonable. Let's say a donor gives $50 annually for four years, resulting in a total donor lifetime value (LTV) of $200. If the acquisition cost for that donor is $80, even though it may seem a bit high in the first year, it becomes justified over the entire period. The LTV needs to exceed the acquisition cost.

Analyzing the LTV of various donor segments can help pinpoint which engagement models are proving most effective. This insight allows you to allocate resources more effectively, directing efforts toward a stewardship program that delivers optimal results.

Giving Level Metrics 

In the nonprofit world, understanding how much donors give is crucial for success. Giving Level Metrics, like Average Gift Size and Average Gift Size Growth, are essential tools. They help us categorize donors and tailor our communication to them. This section explores these metrics, shedding light on donor generosity and how it evolves over time, guiding us in building stronger connections with our supporters.

Average Gift Size

Your organization's donor stewardship is significantly reflected in the average gift size. Essentially, this metric serves as a clear indicator, distinguishing the larger, major gifts from the smaller ones. Knowing your average gift size becomes the initial step toward categorizing your donor lists into different giving tiers.

This categorization becomes a powerful tool, enabling you to personalize your communications and touchpoints, ensuring each donor is approached appropriately. Determine the average gift size by dividing your organization's total annual donation amount by the total number of contributions.

For instance, if your nonprofit received a sum of $100,000 in donations over the past year from 500 individual contributors, the resulting average gift size would be $200 ($100,000 ÷ 500 = $200)- this figure becomes a foundational metric for tailoring your engagement strategies and understanding the typical contribution size of your donors.

Average Gift Size Growth

Wondering if your donors have increased their giving over time? Calculate your average gift size growth to find out. By delving into your donors' giving histories, you can project potential future gift sizes. An upward trend may signify effective donor nurturing, showcasing the impact of their generosity. On the flip side, a decline or steady decrease might indicate the need to work on repairing the donor relationship. Begin by calculating your nonprofit's average gift size for two consecutive years. Then, use a formula to determine the percentage increase between the two years (alternatively, you can assess the individual giving of each donor).

Consider your nonprofit's average gift size was $150 in the first year, and it rose to $200 in the second year. Using the formula [(New Average - Old Average) / Old Average] * 100, the resulting 33.33% increase suggests a noteworthy growth in average gift size. This implies effective donor engagement, hinting at the potential for increased generosity in the future.

Engagement Metrics 

This section focuses on key Engagement Metrics, offering insights into how frequently your team partners communicate with donors and the impact of proactive fundraising endeavors. These metrics serve as navigational tools, aiding nonprofits in finding the optimal balance in reaching out to donors and assessing the effectiveness of donation requests.

Frequency of Contact With Donors / Outreach Rate

This metric straightforwardly indicates how frequently your team reaches out to individual donors within a defined period. While it's possible to calculate this metric for each donor separately, its real value emerges when averaged across a donor group. For example, to evaluate whether the frequency of donor contact impacts conversion rates, assess the average contact frequency in groups that converted versus those that didn't.

Determining an effective schedule for donor contact is often a challenge for nonprofits. Excessive contact may become bothersome and drive donors away, while insufficient contact risks missing potential supporters. This metric serves as a helpful tool for establishing a starting point and guiding nonprofits toward an optimal contact schedule.

The Frequency of contact with donors, or outreach rate, is calculated by dividing the number of interactions by the unit of time. For instance, you might discover that your team partners reach out to major donors over the phone eight times a year. Alternatively, the outreach rate for all donors could be 24 times a year or 12 times per month. This metric offers a quantitative measure to evaluate and improve your team's engagement strategy with donors.

Asks Made

The term "Asks made" refers to the total number of donation requests that you make to a donor or group of donors. This metric tracks how proactive your fundraising efforts have been. Tallying up a total of asks is one way to measure this metric, but you can also drill down to look at particular types of donors or campaigns. Keep a spreadsheet of asks made to specific donors with the date, the nature of the request, and the outcome (your CRM may also have a field that allows you to track this for each contact in your database).

Imagine your nonprofit initiated 150 donation requests during a fundraising campaign. By diligently maintaining a spreadsheet that records the date, type of request, and outcomes for each task, you gain valuable insights into the effectiveness of your proactive fundraising efforts. This meticulous tracking allows for a nuanced analysis, enabling you to tailor future strategies based on the outcomes of specific donor interactions.

Online Performance KPIs 

This section directs its focus towards Online Performance KPIs, offering insights into metrics specifically designed to measure the effectiveness of email campaigns. Exploring these metrics provides a comprehensive understanding of how well email initiatives resonate with recipients and contribute to the overall success of digital endeavors.

Email Open Rate

Email open rates indicate the proportion of emails that recipients open. Maintaining a favorable email open rate is crucial for minimizing subscriber attrition. Aligning your email subject lines and headers with the interests of your recipients can contribute to an improvement in your email open rates.

You can determine the email open rate for your campaign using the following formula: Email Open Rate = (Number of Emails Read / Number of Delivered Emails) × 100- if you send 60 emails and encounter five bounces, resulting in 55 delivered emails, 25 get opened, your email open rate would be 25/55 = 0.45, leading to an email open rate of 45%.

Email Click-Through Rate

Email click rates reveal the number of recipients who engage by clicking on the links in your emails. These link clicks offer valuable insights into the engagement level with your content. Factors influencing click rates include email readability, format, and design. A lower click-through rate may signal areas for enhancement in your email strategies.

Your email click-through rate can be determined by figuring out the percentage of people who clicked on a link or call to action (CTA) compared to the total number of email impressions- if you have 200 people on your email list and 20 of them clicked on the link or CTA, your click-through rate (CTR) would be 10%.

Email Opt-Out Rate

We've all chosen to opt out of some form of email subscription, typically indicating a loss of interest. If this is how your audience reacts to your newsletter, it's a clear sign to refine your approach. Don't underestimate this metric; even one or two opt-outs can indicate underlying issues that require attention. 

The email opt-out rate can be calculated by dividing the number of individuals who opted out of your email subscription by the total number of emails delivered- if your campaign delivered 5,000 emails and 50 subscribers chose to opt out, your opt-out rate would be 1%. 

Social Media and Digital Marketing Metrics 

When it comes to social media and digital marketing, it's crucial to carefully look at specific metrics to understand how well your online strategies are working for your in-person and online fundraising event. This section explores these metrics, focusing on how you measure the success of campaigns and content across different digital platforms.

Landing Page Conversion Rate

Whether you're seeking contributions from first-time supporters, loyal donors, committed volunteers, or subscribers to your newsletter, it's crucial to identify the number of people completing donations as a percentage of total visitors. This measurement allows for more effective communication of your overall campaign landing page conversions.

To calculate the landing page conversion rate, use the following formula: (Number of donors converted from a specific campaign landing page / total landing page traffic) × 100 = landing page conversion rate- for instance, if a campaign brings in 100 visitors to your landing page and 25 of them go on to become donors, your overall conversion rate stands at 25%.

Once you have this percentage, you can compare it across various campaigns and forms to assess results. In addition, the determined conversion rate can be used as a baseline for setting future goals. For example, you might aim to enhance your campaign conversion by 5% in the next month. To achieve this, consider experimenting with different languages, incorporating compelling quotes, or tweaking your call-to-action. Another effective strategy is to conduct split (or A/B) tests, directing half of your traffic to one version of the page and the other half to a slightly modified alternative form.

Amplification Rate

Your amplification rate is a crucial metric, indicating how frequently a post is shared with your followers. The more shares your content receives, the wider your audience grows, potentially enhancing engagement. Thus, a higher amplification rate is sought after, signifying increased sharing. For posts with low amplification rates, it's recommended to review and identify areas for improvement.

To calculate the amplification rate, divide the total shares of a post by your total number of followers and multiply by 100 to express it as a percentage.

Virality Rate

The virality rate is similar to the amplification rate in that it reveals how many times the content has been shared. However, unlike the amplification rate, which presents this ratio as a percentage of followers, the virality rate calculates it as a percentage of the post's impressions. A higher virality rate indicates the post's success in spreading widely among those who come across it.

To figure out the virality rate, divide the post's number of shares by its impressions. Then, multiply the result by 100 to obtain your virality rate as a percentage.

Applause Rate

Your applause rate represents the proportion of approvals, including likes, favorites, or retweets, concerning the size of your follower base. These approvals serve as indicators of the value your content provides to your audience. Leverage your applause rate as a guiding metric for shaping your content strategy. It should play a decisive role in determining the nature of your future content, while content receiving fewer approvals might warrant reevaluation or discontinuation.

Calculate your applause rate by adding up all the approval actions a post received during a reporting period. Following that, divide this total by your overall follower count and multiply the outcome by 100 to express the applause rate as a percentage.

Social Media Conversion Rate

Your nonprofit probably uses different ways to share information, like social media or direct messages. But not all of them work in the same way, and your team might notice different results. That's why it's important to figure out how well each method is working, including social media, online searches, direct messages, and paid ads. Knowing this helps your nonprofit improve how you share information and get better results from different ways of communication.

To calculate your marketing channel conversion rate, you need to use the following calculation: (Number of donors converted from a specific marketing channel / total traffic generated through that channel) × 100. For instance, suppose 30 out of 300 visitors from social media become donors or subscribers. In this case, the social media channel conversion rate would be 10%. Similarly, if an email marketing campaign attracts 800 visitors with 160 converting to donors, the conversion rate for that channel would be 20%.

Understanding these conversion rates in real time enables you to make informed decisions about allocating marketing resources. Close monitoring aids in shaping your future strategy, allowing you to pinpoint which initiatives and channels warrant concentrated efforts for optimal returns.

If a particular marketing avenue demonstrates a higher conversion rate, you might choose to invest more time and resources into that specific channel. On the other hand, if you encounter subpar results in a certain area, you may opt to enhance your efforts on that channel before committing additional resources.

How to Collect Fundraising Metrics

You can gather fundraising metrics whenever donors engage with your nonprofit's fundraising strategies, including platforms like Paybee. Keeping tabs on these interactions allows you to assess how well your fundraising and outreach tactics are working, but it's essential to have a robust data infrastructure in place first.

Here are some best practices to set up a reliable data pipeline for your nonprofit:

Use a Dedicated CRM Platform or Database

This solution will serve as the central repository for your fundraising data and should be the cornerstone of your entire tech setup.

Choose Fundraising Software that Provides Performance Data

Your organization likely already uses various online fundraising tools, but make sure each one is furnishing the necessary data. Reports on all donor interactions should be easily accessible, ideally flowing directly to your CRM. And don't forget about non-digital engagements like direct mail; they can (and should) be tracked but might require a bit more manual input into your database.

Integrate Your Software with Your CRM Whenever Possible

Integrations between your CRM and fundraising software are crucial. They enable your tools to automatically report new gifts to your database, eliminating the need for manual entry.

Follow Standardized Data Entry Protocols

Ensure that the data flowing into your CRM is being stored and reported exactly how you want it. Begin by configuring incoming data to be tagged with appropriate features, like donor name, date, amount, and the specific campaign or source of that donation. All data should adhere to the same entry protocols to prevent anything from falling through the cracks.

Configure Your CRM to Provide Customized Data Reports

Set up custom reports to extract data that matches specific features. For example, you could pull reports of all donations made to a particular campaign or all donors who gave an average amount in the past year.

Use Machine Learning Software to Analyze Your Data and Run Predictive Analytics

To enhance your data infrastructure and get the most value, use integrated AI and machine learning tools for predictions. Predictive analytics can be quite complex, but AI technology simplifies the process by generating lists of ideal donors for appeals or identifying those at risk of lapsing.

How to Use Fundraising Metrics

How do you use and maintain your analytics toolkit on an ongoing basis? Here are a few tips:

Have a Concrete Process in Place for Collecting the Metrics You Need

Actively collect data using software integrations and standardized data entry protocols. Always keep data collection in mind for any new fundraising or outreach initiatives.

Regularly Review Your Performance Data

Take time during and after campaigns to study the results. Ensure data hygiene by scheduling regular data reviews to address technical issues and data entry mistakes. If you use integrated AI tools, expect new rounds of predictive insights weekly.

Actively Use Your Analytics When Planning Campaigns and Appeals

Before planning a new appeal or campaign, delve into your data. Use insights from past performance to guide your strategies. For instance, if planning a new email appeal, study how your last email appeals performed. If conversion rates were low, analyze where the issue may have occurred, such as targeting the wrong audience or using broad donor segments. To boost retention in your regular giving program, use historical data to understand lapsing patterns and proactively address potential issues.

In Future Campaigns and Appeals, Set Goals Tied to Specific Fundraising KPIs

Integrate analytics into your fundraising process by linking future goals to specific metrics. This provides a concrete frame of reference for judging success and identifying areas for improvement. Remember that the value of your data compounds over time as your database grows. As long as you shape and maintain it in ways valuable for your nonprofit's goals, you're on the right track.

Frequently Asked Questions (FAQs) - Nonprofit Fundraising Metrics

How can nonprofits use fundraising metrics for ongoing success?

Nonprofits can use fundraising metrics by having a dedicated process for data collection, regularly reviewing performance data, actively using analytics in planning campaigns, setting goals tied to specific metrics, and leveraging integrated AI for predictive insights. This approach ensures sustained success in fundraising endeavors.

How can nonprofits collect fundraising metrics effectively?

Gathering fundraising metrics requires a sturdy data infrastructure. Use a dedicated CRM platform, choose fundraising software that provides performance data, integrate software with your CRM, follow standardized data entry protocols, configure your CRM for customized data reports, and use machine learning software for in-depth analysis and predictive analytics.

Why is the Average Gift Size important in donor stewardship?

In donor stewardship, Average Gift Size reflects the generosity of donors and aids in categorizing them. Understanding this metric allows nonprofits to personalize communications and tailor engagement strategies for different donor segments.

Final Thoughts: Unlocking Success with Nonprofit Fundraising Metrics

Evaluating and improving nonprofit fundraising endeavors, whether through monthly events or foundation partnerships, is crucial for attaining organizational objectives. Metrics and Key Performance Indicators (KPIs), particularly with tools like Paybee, offer crucial insights into the effectiveness of fundraising efforts, year over year.

This data-driven approach establishes an ongoing cycle of improvement by continuously monitoring progress and comparing performance with similar nonprofits. The thoughtful selection and measurement of relevant KPIs and metrics are pivotal for effective resource allocation, goal setting, and building donor relationships. Exploring various fundraising metrics, such as cost per dollar raised, conversion rates, gifts secured, and matching gift revenue, equips nonprofits with essential decision-making tools for successful fundraising initiatives.

A strong data infrastructure, technology integration, and analytical methods enable nonprofits to extract valuable insights, ensuring sustained success in fundraising endeavors.

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Anastasia-Alexandra Nenova

Born and raised in South Africa, Anastasia-Alexandra is a Bulgarian writer and fighter. When she isn't writing, she's busy training or competing in Judo for South Africa. She's passionate about Judo where she is a 2nd Dan, other martial arts and fitness overall. Her dream is to qualify for the Olympic Games in Judo, and she's doing her best to turn that dream into reality.

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