As I have traveled around the country in the past 20 years doing lectures and workshops, there has been one sentence that has resonated with all of my audiences:
“If your organization doesn’t demonstrate its value to potential funders, they’ll fund an organization that does.”
Many of us are familiar with Peter Drucker’s Foundation Self-Assessment tool, a valuable exercise that every nonprofit should take advantage of in their annual board retreat. Drucker’s five questions are:
- What Is Our Mission?
- Who Is Our Customer?
- What Does Our Customer Value?
- What Are Our Results?
- What Is Our Plan?
These questions are easy to understand, direct, and to the point. And while they are a great place to start the process of developing your organization’s Asking Rights™, we can go a step further. Value and impact should truly be the centerpiece of your fundraising strategy, not simply a collateral piece or a catch phrase.
But be careful. Value is not the same as impact. Impact is often expressed in dollars, whereas value is what it means to your funding targets.
And while many nonprofits have integrated the word impact into speeches for funders, the fact that it is becoming more prevalent makes it … less impactful. I have also seen a lot of players in the nonprofit arena adopt our vocabulary of investment, ROI, and value propositions. Unfortunately, it seems that the words alone are where they stop.
Assessing Your Impact
The Independent Sector, BBB’s Wise Giving Alliance, and GuideStar USA have jointly developed a set of inquiries to help in Charting Impact. Charting Impact was developed, tested, and refined with input from nearly 200 nonprofit and philanthropic leaders across the country. From their site: “Charting Impact encourages strategic thinking about how you will achieve your goals. It also creates a report that lets you share concise, detailed information about plans and progress with key stakeholders, including the public.”
While primarily a management tool, the answers to these five questions should have a key place in your fundraising strategy:
- What is your organization aiming to accomplish?
- What are your strategies for making this happen?
- What are your organization’s capabilities for doing this?
- How will your organization know if you are making progress?
- What have and haven’t you accomplished so far?
Making Sense of All of This
Some impacts are big and some are very small. When I use the word impact and encourage our nonprofit clients to look at the questions above, I want them to be able to show the impact they have on people’s lives, otherwise known as outcomes. There are numerous other resources that extol the virtues of an outcomes-based approach for nonprofits. No matter which set of questions you choose to use, they will help you understand more about your organization and provide a good launching pad for what lies ahead.
Knowing what your supporting customers value influences your credibility. The results, or outcomes, you choose to highlight will influence the amount of your fundraising target. Translating your outcomes into benefits that matter to your investors is an important part – perhaps the most important and usually the most difficult part – of your fundraising process.
Now that you have charted your impact and translated it into value, does your organization have the right to ask for large, meaningful dollars? Take our two-minute quiz to determine where your organization is on the path to financial sustainability.