How to Become an Impact-driven Nonprofit
How does measuring and marketing your nonprofit’s impact catapult your organization to the next level? In a recent Remodel Health Webinar, Social Impact Solutions Co-founder John Mark Vanderpool explained how sharing social impact data with donors serves to increase donations, retain donors, and even increase productivity and engagement with staff and volunteers. The highly desirable result is disproportionate organizational growth. We encourage you to watch the free webinar using the link above, but in the meantime, here are highlights of the strategies discussed. Either will provide actionable free tools and insights as you approach the concept of how to become an impact-driven nonprofit.
Step 1: Understand the Value of Social Impact Data
Measuring and marketing impact is conceptually great, but understanding it can be difficult. So what is your impact? Your impact is the social change (positive, negative, or neutral) that your nonprofit programs create. There are many types of impact metrics that depend on the types of services your organization provides. For some types of human services organizations quality-of-life improvements that result from your mission may be relevant for you to measure.
Why Impact Matters
The number one reason to measure impact is the people you serve. The more you measure, the greater your impact will be on your target population or cause. Additionally, your social impact is the number one reason donors give is your organization.
When you consider that. it’s not difficult to see why measuring it is essential to increased donations and donor retention. Measuring impact has the added value of highlighting what’s working in your organization and what needs tweaking. You may see the data and realize you’re doing more than you realized, or conversely, that a particular program isn’t as successful as you thought. Your donors and potential donors want to know that impact either way.
A Different World
Many nonprofits are losing longtime partners because they don’t have any impact data to show what’s being accomplished. If a funder is a family foundation, its next generation is going to be more impact-focused because most millennials and Gen Z donors have “gift requirements,” meaning they want to see social impact data. If you don’t have it, they’ll stop giving. The same is true if you’re raising money and not communicating what you’re doing with those funds. Communication needs to be simple and straightforward so they can see the role they have in funding your nonprofit and making the world a better place. They view themselves as agents of change and are looking for partners to help them live out that reality.
The world has changed a lot in the past few years regarding technology, awareness, cultural and social changes. People are not going to take your word for it when you say your nonprofit is doing great things. They not only require data, they also need to see it in different ways depending on your audience. In other words, tailor your communications for individual donors, foundations, granting organizations, staff, and volunteers. They want to know everything that’s going on and don’t care if your numbers aren’t perfect. Transparency builds trust, and trust translates into bigger donations, donor retention, organizational growth, and engaged donors, staff, and volunteers. They just want to see that you’re measuring, so don’t be afraid to share the good, the bad, and the ugly.
Step 2: Measure
Measuring inputs, outputs and outcomes begins with a clear understanding of each of those terms.
Inputs are what you do to contribute to the mission on a day-to-day basis. Maybe you’re providing rice and beans to malnourished children in an impoverished village. Your inputs will include how many pounds of food you purchased, the cost of the food, packing materials, and shipping, and the number of recipients. Outputs show how many people you served in a given timeline. Using this example, you fed 50 thousand children per month for six months. That is fantastic, but no longer good enough for funders. Approximately five years ago, donors began seeing social impact data as an essential component in determining whether to give money to a particular nonprofit.
Your outputs are a nice solid foundation, but now you need to build on that foundation by measuring the outcomes of those outputs. That will be your social impact. Are children no longer malnourished because of the rice and beans your provided? Look at weight gains, BMI metrics, reduction of illnesses, etc. From there, stretch out the timeline: by improving their weight, health, and energy level, how have your rice and beans led to improvements regarding learning, growing, graduating, getting jobs. Continue measuring as time goes on to see how the outcomes of your provisions eventually improve the quality of life for the whole community. Find the outcomes most relative to your organization and focus on those. Do this, and you won’t have to worry about losing funding. In fact, you will likely be amazed at how quickly it will result in increased donations and organizational growth.
Step 3: Evaluate
Once you’ve gathered some data, use it to evaluate the value of your organization. Sometimes nonprofits think they are creating significant impact, but the data tells another story. Conversely, you may be providing more value than you thought. Data might not show what you expect, but that’s fine. Own the data and track it. The beauty of this is the multiple ways in which it can be used. Market your information to donors, who will love it, and analyze it to get a clear vision of which programs are working well and which are not. Use it as a tool to decide how to better allocate funds.
When you measure and market your impact, it opens your organization up to a very different funding pool. There is a lot of donor money available. Tap into that and make yourself eligible for different echelons of giving. Donors who are aligned with your cause will want to partner with you when they see you are measuring your outcomes. It unlocks opportunities for real revenue growth, which means the people you serve receive better care.
Step 4: Create a Nonprofit Impact Report
One of the most effective ways to market your nonprofit’s social impact is by creating a comprehensive impact report. This report tells your donors you have data to back up the impact you’ve had on the people you’re helping. It will open you up to significantly more funding dollars from government and corporate grants. Large funders want to fund impact and need you to make it easy for them. Do that by clearly communicating your real value, something many organizations fail to do. It takes time and commitment to capture the necessary information, but the payoff is well worth it.
Your impact report should include:
- Validated research methodologies. When you measure inputs, outputs, and outcomes, it’s important to use a tool that has been validated. There are many respectable institutions that validate methods with surveys and tools. Use them. Don’t make up your own impact measurements as it will not be as effective.
- Data-driven stories of transformation. There are two reasons donors give: social impact data and stories of transformation. If you have impact data and stories of transformation, you are light years ahead of most organizations in the United States. Interview some of the people your organization serves, and with their permission, include their stories combined with the data you have gathered. This is data-driven storytelling. What was their situation before your organization stepped in? How did your resources or services change their lives, and where are they now? Stories of transformation give data a heart.
- A variety of Communication Tools. Use multiple means of communication: graphs, text, videos, photos, infographics. How your information is best digested depends on your audience. Everyone has different ways to understand and absorb information and see their place in the plan. Remember your board, staff, and volunteers are stakeholders just like donors and the people you serve. Compelling impact reports should inspire, unite and galvanize around the mission you have.
- An inspiring vision of the future. Provide donors with a crystal clear picture of your organization’s current state of affairs, where you’re going, and how they matter in helping you get there. They want to see where they fit into the ecosystem and the world you’re trying to create. If you explain how partnering with you can change lives, and how they can accomplish that, you give them a clear path to follow. This will massively increase your odds for ongoing champions rather than occasional donors.
- Clear calls to action. Make the next stop obvious and easy: Give today. Make a pledge. Join our team. Schedule a call. Your impact report should be a strong, robust development officer designed to help you raise lots of money to advance your cause.
Case Study – Remodel Health
Remodel Health is a great corporate example of social impact. This company provides affordable health insurance options and solutions for nonprofits and helps nonprofits save a lot of money. That allows organizations to do two things very well:
- Advance their mission because they have more money in their accounts.
- Take good care of their team members.
Social Impact Solutions examined Remodel Health’s impact report and was impressed by the impact data and how it was communicated.
Remodel Health’s affordable healthcare insurance for nonprofits is their input. They look at an organization’s current benefits and costs, which are often 45% to 65% of gross expenses. It’s no surprise this takes a lot of money away from a nonprofit’s mission. They review that information and help a nonprofit switch to a better plan that is less expensive and better for team members. Their software puts employee healthcare plans into one convenient bill and results in saving organizations an average of 30%-50% on healthcare plans. This is input data.
The impact: The 400 organizations served by Remodel Health experienced a short-term outcome of $100 million in savings! That resulted in 4,800 raises given to employees across all 400 organizations. That savings also allowed them to hire 2400 new employees, construct 25 new buildings for the communities they serve, and provide 33 million additional meals. And there’s more. The savings on health insurance also allowed these nonprofits to clothe an additional 4 million people, provide 25,000 scholarships awarded, serve 9500 students, and perform 900 baptisms.
When nonprofits show numbers like this corporate example, people feel confident and excited to partner with them.
Step 5: Put Your Donors at the Center of Your Impact
Your nonprofit cannot succeed at its mission without donations. Your donors are the heroes of your marketing and development stories. Make sure they know that. Whatever you do, whoever you help, only happens because of them. When they see how they fit into the story, they become engaged and feel like agents of change. It’s up to you to show them how their money is improving quality of life in whatever way you’re doing that.
An easy way to accomplish this is donor-centered communications. Your mailings, emails, brochures, and impact reports should all reflect your donor’s role in transforming lives. For example, instead of saying “We provided 100 medical checkups a month this year to the ABC village in Mexico,” you can say “Because of you,100 people per month in the ABC community received much-needed medical care at our donor-funded clinic.”
Large nonprofits like World Vision and Make-a-Wish are experts in these types of communications, which has clearly worked well for them. Not only do they make donors the heroes in their individual communications, but they also on their websites.
On World Vision’s website: “See how your gift grows in impact. Empower kids and families to lift themselves out of poverty.” They do not say World Vision empowers kids and families. Instead, they provide a clear call to action. YOU can empower kids and families. This is followed by three buttons offering options to buy goats and chickens, give to the World Vision fund, or give to the Global Hunger Crisis.
On the Make-a-Wish website: “You can create the turning point wish kids need in their treatment and recovery.” Again, the statement points directly to donors and the impact they make with their gifts.
Need Some Help?
Measuring and marketing inputs, outputs, and outcomes requires a time commitment, but the results are well worth the effort. Any nonprofit can follow Remodel Health’s lead and track its data, then use that information to create valuable impact reports and donor-centered communications. Take it a step further with data-driven storytelling, and you’ll open the door to a whole new level of funding opportunities.
At Social Impact Solutions, we understand these strategies can feel burdensome, but it doesn’t have to. We can help with impact reporting and marketing so you can raise more money and scale your impact. Our team can provide assistance with clarifying your impact strategy, building impact reports and creating data-driven email marketing. We can also help with legitimate stories of transformation. Simply schedule a free consultation.
If you’d like to see how well your current strategies are working and whether you’re leaving money on the table, take our Fundraising Quiz. It’s short, free, and you’ll have a tailored evaluation in minutes. Better yet, it comes with a free course!