In the Trump era I expect federal funding for nonprofit social service agencies to all but come to a halt. However, there is optimism for an increase in grants from private foundations and gifts from donors of significant net worth. However, vying for these funds will be more competitive than ever and I am absolutely sure of one thing: A nonprofit’s survival needs do not constitute a sound argument for raising money. To say that “We need money to survive” is a defensive statement. Instead, talk to your donors and funding partners about golden opportunities to make a difference. The fundamentals of fundraising apply now more than ever. An in-depth and emotional case must be made for their support. Further, the best way to make that case is to focus on the fundamental impact your organization is having on the community it serves.
“Impact” will be the buzz word of the nonprofit sector for the next 20 years, just as “outcome” has been the buzz word for the past 20 years. People often confuse “impact” with “outcomes” or “quality assurance,” but these terms are not synonymous. An outcome is an indicator of services provided, for example having distributed 1,000 meals or 1,000 coats to people who are homeless. Quality assurance is a measure of client satisfaction; it means that the recipients of the foregoing services felt that their needs were met in a timely, effective, and respectful manner.
Impact is a big picture term. It refers to the social problem(s) the nonprofit was created to address and its efficacy in solving that social problem. In the above example, the impact of the agency would be its success in reducing homelessness. An impact assessment might be as follows: “Prior to the inception of our agency, 1,500 people were homeless in our catchment area. Now only 900 people are homeless.” Due to circumstances beyond the nonprofit’s control, the social problem may in some cases have been aggravated. A proper impact statement should note these circumstances: “Because of the economic downtown, the number of people who are homeless in our area has increased to 2,000.”
Assessing the long-term impact of an organization is a vital function of the Board of Directors. “Are we solving the problem we set out to solve?” Unfortunately, many Boards and agencies get bogged down in the short term business and loose sight of the big picture. As a result, impact is not generally noted in the proposals, annual reports, and case statements of the nonprofit sector. This will change because one key to surviving an economic downtown is to demonstrate the impact your organization is having now and the enhanced impact it will have in the future. This is why you may have noticed that funders are rewarding the most successful nonprofits not only with renewal grants but the largest size grants they make!
Emphasizing impact will always enable you to raise more money. The reason is that potential donors and funding partners will inevitably be impressed by an organization that can demonstrate it is solving a social problem, or at least moving the problem to a better level.
How does your nonprofit speak about its impact in the community? Please leave your comments at the blog.