I recently spoke with a wonderful group for a wonderful organization, the Association of Fund Raising Professionals at their Lehigh Valley conference. The presentation was “Where Can Your Limited Funding Dollars Have the Most Impact: Communicating to Your Funders the Power of Their Investment in Your Organization”.
A lengthy title, but it reminds nonprofits that their funders are indeed investors. Prior to making an investment, investors will look at the investment and make sure that it delivers a good return on their money at a level of risk that is acceptable to them. What information do your investors need to determine that their money will make the most impact in your organization?
First you need to figure out where your funds have the most impact. If you have several programs you need to look at each program separately. What are the direct costs related to that program? How many people can you serve? What amount of staff time is required to deliver your services? Can you use your staff time or your facilities or your resources in a more efficient manner to serve more people?
Once you have the financial information and the data, you need to figure out the best way to communicate that to donors and grantors. Different audiences will need different types of communication. One grantor may be interested in investing in your organization because they can see that if they provide money for staff training, the staff will be able to serve 50 more people each week. Another donor may donate because you have explained that their donation of $500 will enable your organization to build a well that can bring water to 600 people every day. And another funder may appreciate your commitment to building a stable, healthy nonprofit that continually is a community resource and they are glad to add to your reserve fund because they can evidence of this stability in your financial statements.
Financial and data analysis will not only attract more donors, it will help you manage your nonprofit better. As the saying goes, “If you can measure it, you can manage it”