Demonstrating the ROI of your non-profit program to donors
This is a sample of Redbird's new free report 10 Powerful Strategies to Help Non-Profits Demonstrate the ROI of Their Programs. You can download the free report here.
The challenge of measuring impact
Non-profits are facing increasing pressure from their corporate donors to act and report like businesses. As noted in the 2010 Donor Non-Profit Performance Report, corporate donors want to know the value of their support and the hard facts about what their sponsorship has “purchased” in terms of social or public health improvement.
According to the Donor Report, this demand for measurement poses “a real challenge for Canadian non-profits, especially as donor expectations for more rigorous performance evaluation steadily grows.” The non-profit sector needs evaluative and evidence-driven ways to assess their performance, outcomes, and impact. And corporations and donors who support them deserve information about the performance of non-profits. However, quantifying social or behavioural change is a complicated and expensive task.
A program for the homeless has a much different mission and metrics than one for environmental advocacy. A health promotion campaign for overweight children has different indicators of success than a diabetes management campaign for seniors. And data for all of these programs may be private or difficult to obtain.
A further complication is that gathering data does not guarantee a non-profit can prove an impact. Sophisticated reporting requires lengthy and expensive studies, involving control groups. According to Alana Conner Snibbe, the senior editor of the Stanford Social Innovation Review, many people underestimate the difficulty and cost of demonstrating impact. As a result, “nonprofits often collect reams of data that are not only useless, but also misleading” (source here).
As Phil Buchanan, executive director of the Center for Effective Philanthropy puts it: “Board members dangerously assume that it might be as simple in this world as it is in business, but it isn’t. And it isn’t even that simple in business” (original article here).
A survey of more than 300 non-profit executive directors and CEOs in New York and Ohio reveals that 75 percent feel that they do not have enough time for evaluation, 61 percent feel that they do not have enough staff for evaluation, and 45 percent feel that they do not have enough funding for evaluation.
While gathering data and monitoring the performance of campaigns is always essential, there are some other innovative strategies non-profits can use to show the value and effect of their organizations more frequently and with less strain on their budget and resources.
This report will provide some practical ways to demonstrate the ROI of investing in your organization’s mission using advanced online analytics, social media measurement, marketing tactics, case studies of high-impact non-profits, and data gathering. You can get the full report here.
Begin with the market
The first most logical step to demonstrating ROI is to begin with your audience. What are donors looking for? What are they unhappy with when it comes to non-profits? What are they expecting? And what motivates them?
In Redbird Communications’ research report, Motivate and Convince: the Most Effective Tactics for Attracting Donors and Volunteers, we found that a number of external surveys suggest that individual Canadians and corporations are not satisfied with the quality of information that non-profits provide with regards to the uses of funding.
In a survey conducted by COMPAS in September 2003 (more recent data not available from COMPAS), two thirds of business leaders polled said they would be more likely to donate to a charity if the charity were more accountable.
A 2008 survey by the Muttart Foundation reported that 30% of Canadians don’t have “a lot” of trust in charities due to a lack of information about “where their money is really going.”
The 2008 Donor Non-Profit Performance Report found that while almost all Canadians think it’s important that charities provide information about their financial management (fundraising costs and uses of donations) as well as the delivery and impact of their services, less than 40% of those surveyed are happy with the information they actually receive from the charities they support.
The 2007 Canada Survey of Giving, Volunteering and Participating (most recent survey available) noted that significant numbers of potential donors did not donate because they did not think that the money would be used efficiently.
A simple solution to lack of faith in donors is to regularly conduct interviews with key donors and contacts. Find out what they are looking for. And more importantly, find out what information you can gather that will help to build trust with them.
These interviews do not need to be time consuming. Even 10 email or telephone responses from key contacts can be very revealing.
Last year, for example, our agency performed some simple telephone interviews with key donors for one of our clients, a medium-sized non-profit. Before we conducted these telephone interviews, the non-profit had been quite confused about how to communicate the impact of their programs to their key corporate donors. They were unsure if donors wanted more hard facts, stories, or if they simply wanted to be left alone. Even the frequency of newsletters became a point of debate among the non-profit’s management as they were unsure if people even read them or wanted frequent updates.
However, some informal research revealed that donors and corporate sponsors had some simple needs: they wanted more personal stories about particular individuals the non-profit helped, they wanted more frequent newsletters, and they wanted the non-profit to simplify its branding as they often thought the organization tried to do too much. These insights were gathered in just a few hours of telephone polling.
Informal polls do not provide statistically significant data. But a few direct conversations with key donors can be very revealing. This feedback can help your confidence as you plan larger initiatives and can spark new ideas for better demonstrating ROI.
According to a recent survey of a diverse group of high-performing non-profits, non-profit leaders admit that “while it’s nice to have data,” most of their donors continue to give “because of the relationships we cultivate with them” (source here). Conducting regular interviews with key donors and corporate contacts is an excellent way to perform market research and develop your relationship with a company.
Let’s now look at some practical and costeffective ways to collect data and communicate the value of corporate investments.
About Redbird Communications
Redbird Communications is a marketing communications agency in Victoria, British Columbia, that works with non-profits, social enterprises, government ministries and other private and public-sector organizations.
Founded in 2001, we provide research, strategic planning, creative services, and public relations to clients in BC, Ontario, and beyond. Redbird has developed province-wide awareness campaigns, including our most recent ‘Signs of Stroke’ campaign for the Heart and Stroke Foundation of BC & Yukon. For that campaign, we helped to raise $250,000 from pharmaceutical sponsors to fund the media buy, and created TV and radio spots, print collateral, and online advertising.
Follow and chat with us on Twitter (@Redbirdcomms).