In the world of nonprofit organizations, impact reporting is a pivotal aspect of fundraising efforts. More than ever, donors want to see nonprofits use their money effectively. They want their money to make a difference in the lives of the communities your organization serves. In fact, according to a recent study by Social Solutions, impact reporting is one of the main reasons donors choose which nonprofits they give to.

In this blog, we will share our experience and the experiences of other respected fundraising organizations, so you can learn more about how to increase your engagement with donors and raise more funds.

Donors want to know what you’re doing with their money.

The study completed by Social Solutions, which surveyed over 200 foundations and corporate giving programs, found that 93% of respondents reported that they required grantees to provide impact reports. This indicates that impact reporting is not just a “nice to have” but a requirement for receiving funding.

What’s interesting about this report is that impact reporting is a somewhat new requirement. According to another study done by Social Solutions, funders began seeing this as essential in the past five years. Actually, they found that 57% of funders agreed that it was within the last five years that they began seeing the need for impact reporting. Even more, only 4% think this requirement will change. Chances are the need and expectations for meaningful reporting will only increase.

One of the study’s key findings was that donors want to see measurable results. In fact, 97% of respondents reported that they consider the measurable impact of a nonprofit when deciding to fund them. This means that nonprofits need to be able to clearly articulate their goals, their methods for achieving those goals, and how they will measure success.

Donors want to know about the impact of their donations.

Measuring and reporting organizational impact is critical to gaining new donors and keeping existing donors. The study completed by Social Solutions provided a word cloud with the most commonly used words from the surveyed donors. It came back that a massive 88% of them said they are seeking program outcomes. Now, 41% of respondents also highly value impact stories. We’ve found that good storytelling can be a game-changer when you’re fundraising. 

It can be challenging to measure the impact of an advocacy-focused nonprofit. Leaders of organizations that struggle to put numbers to their progress could consider telling compelling stories of the actual problem. And also telling stories of what life looks like for the people they are advocating for now that they are receiving the resources they need to thrive. Impact measurement is more difficult with advocacy-based nonprofits because it takes time and patience.

However, the Social Solutions study found that 77% of respondents are willing to fund programs that are more difficult to measure as long as the nonprofit can demonstrate the potential impact.

An example of this came from one of our notable clients. They shared with a particular donor their plans to implement monthly impact reports. The donor was so encouraged that they pledged one million dollars to the nonprofit. Eventually, the check came in the mail, and it was not for one million, but two million dollars! This is giving for potential impact. This generosity is extraordinary, but it also clearly represents that reporting on impact and outcomes is vital.

Donors want a clear vision of what your organization does and how it will change lives.

More likely than not, you’ve heard of an elevator pitch. The second most important thing, just after the name of your product/organization, is the problem you’re trying to solve. Anyone can set good goals, but the key is defining the problem. Then, of course, you can develop a solution and goals. 

A clear problem leads to a clear vision. And that is what funders will be looking for, whether it’s a casual conversation or a proper elevator pitch. In addition to the specific problem your organization aims to address- your vision should include the target population you serve and the goals you want to achieve. It should also explain how your organization’s approach differs from others and why it’s uniquely positioned to make a difference.

By providing a clear vision and impact, you can inspire donors to support your organization and feel confident that their contribution will make a real difference.

Nonprofits should focus on communicating clearly with donors and giving them the information they need to make decisions about giving.

Typically, donors want to support organizations willing to be transparent about their impact. Nonprofit organizations gain trust when they can provide detailed reports on how they use funds and what kind of results they achieve. These reports should be clear and easy to understand. They should be updated regularly. And they should include a few different means of presentation, like writing, graphs, and photos. This kind of reporting builds trust and can even encourage repeat donations.

Measurable impact also helps organizations reevaluate their goals and strategies. By tracking progress and analyzing data, organizations can identify what needs improvement and refinement. This can lead to better outcomes for the people they serve, which can attract more donors. A solid track record of success can help an organization stand out and secure the funding needed to scale its impact.

Conclusion

In conclusion, impact reporting is an essential aspect of fundraising for nonprofit organizations. Donors expect to know what nonprofits are doing with their money, receive regular information on impact and outcomes, and hear a clear and compelling vision for the future of their organization. 

While there are challenges to measuring the impact of specific projects, donors are willing to fund initiatives that are more difficult to measure as long as you can demonstrate potential impact via measurable goals and objectives over the short- and long-term Nonprofits prioritizing impact reporting are more likely to attract funding and make a meaningful difference.

This article has provided insight into what donors want from your organization and how to communicate with them. If you’re looking for more information on how to engage your donors and keep them coming back, check out our other blog posts on donor retention!

If you’re a nonprofit and are interested in our services, schedule a call today!