In the corporate world, if you promise investors specific outcomes, your promises are subject to tight regulation, and false statements can land you in jail. Such was the case in 2007 when Lehman Brothers was ranked the #1 “Most Admired Securities Firm” by Fortune Magazine. Fast forward one year and they were neck-deep in a $50-billion-dollar fraud scandal. The 2008 Barry Madoff scandal is a high-profile example where justice was served, but unfortunately, many of the leaders behind other high-profile scandals from the early 2000s escaped legal penalty due to technicalities or lack of evidence. However, they did not escape penalty from the court of public opinion.
In the nonprofit world, our donors, business sponsors, foundations and grant funders are our investors. The nonprofit sector is not as regulated as the corporate sector, however, in our vastly digital world of information sharing, funders are holding nonprofits much more accountable for outcomes. Our funders now require more data and independent verification of our impact and performance against outcomes, which is essentially how it should be.
Funders are turning to independent evaluation companies like Charity Navigator to determine if a nonprofit is worthy of support. Yes, we live in an era where proving your nonprofit’s impact is mandatory. As you prepare for impact reporting, keep this in mind when building your strategy: funder trust-building is in the details. Here are the components of a trust-building strategy.
Clearly define your nonprofit’s purpose and use full transparency when reporting your performance on delivering measurable outcomes.
Nonprofits use storytelling to demonstrate their impact, and nothing tells a story better than numbers. So when you share your impact results, stay away from general impact statements such as “promote policies and systems that advance access to affordable housing.” Instead, the example below shows how measurement becomes more impactful when it is deeply defined.
In the United States, 46 million people live in poverty and more than 11 million Americans now pay more than half their monthly income for rent. The (Name of Nonprofit) will create a speaker’s bureau to present in front of 40 audiences in 2018 to create awareness of the policies and systems that advance access to affordable housing.
Impact Reporting: When reporting on the impact of this goal, include why these policies and systems are important and what results they are showing, include how many presentations were made, what news coverage was garnered, whether the statistics changed in the local community, and whether the increase in affordable housing could be definitively tied to other economic factors. Most importantly, report how you measured awareness. Did you use audience surveys? Did you ask audiences to opt-in to your newsletter for continued engagement?
Include narrative and details about your nonprofit’s commitment to excellence in your impact reporting.
Successful nonprofits are led by leaders who are committed to responsible spending, team professional development, and following an innovative nonprofit business model. Don’t fall under the spell of operating your nonprofit completely dependent on unpredictable funding like donations and fundraising. Don’t let a limited budget stifle employee development programs, because the cost of not developing employees is far greater than the cost of training and development. Every function required to run a business, whether it’s a nonprofit or a for-profit, evolves over time. And if your employees’ skills are not current, then your business isn’t being run as efficiently as possible.
Impact Reporting: What new technology did you identify to help streamline operations and lower your administrative costs? Where did you shift these budget savings? Did you use the savings to expand a program or launch a new program? Or did you use the funds to develop a formal employee training program? Has your employee training improved employee turnover? What businesses did you partner with to implement training programs? All of this can demonstrate community collaboration and involvement.
Address nonprofit challenges using truthful content, technology, and intelligence.
The research team at the Nonprofit Marketing Academy developed a leadership resource for resolving tough nonprofit challenges. It’s called the INM Method. When facing a challenge, leaders that implement the INM Methods look closely at three resources to develop a resolution: Truthful Content, Technology, and Training. They use the method to answer three pivotal questions.
1. What content or information can be created to help resolve the challenge?
2. What technology can be used to resolve this challenge? (Begin the search looking for free technology)
3. Will training for employees or other team members help resolve the challenge? (Training can be free)
Impact Reporting: Record how you solve your biggest challenges throughout the year and include the results in your reporting to show how it has improved operations, lowered costs, or allowed you to expand your programs or services.
Monitor your reputation.
Walk the walk. Your nonprofit’s reputation should exactly mirror your impact statement. Set up Google alerts and use evaluation sites like Charity Navigator, Charities.org, DirectRelief.org, and Guide Star to ensure that your nonprofit’s brand, performance, and impact are accurately reflected. Funders use these sites to evaluate the investment worthiness of your nonprofit, and news media turn to these sources when seeking newsworthy stories. For example, CBS news cited Charity Navigator as a source when investigating the Wounded Warrior Project.
When monitoring your nonprofit’s reputation, don’t omit social media websites that your nonprofit doesn’t use. These websites still have an audience, and social good and nonprofit poor performance is a hot topic. Just because a nonprofit does not have a professional profile on a social channel doesn’t shield them from being talked about on the channel.
Tell your performance story with data and interactive visual content (using free tools)
Once you compile and analyze your data and now know your performance outcomes, it’s time to create content that captures the attention of your audience. Here are two free tools to help tell your story.
1. Google Sheets – Google sheets work like an excel spreadsheet. Use it to plug-in your data and then choose a chart that helps tell the story. Publish the chart to embed it into web pages or email platforms (see image below. Hover over data to see interactivity.) Or save them as images to use on social media, in newsletters, and in email campaigns.
2. Canva and Mission-Focused Content – Canva is a free graphic design tool perfect for creating storytelling content. Use it to create performance-based stories featuring your nonprofit heroes. Learn more about this important strategy in our video tutorial series.
Example of mission-focused content
Nonprofits that aren’t strongly demonstrating their impact will be brushed over by funders. Is your nonprofit a good investment? Be ready to prove it.
