I’ll just say it right out, 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 your support. 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. Impact is looking at the biggest picture. 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 lose 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.
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.
For practical suggestions on increasing impact, I recommend Forces for Good: The Six Practices of High-Impact Nonprofits, a book by Leslie Crutchfield and Heather McLeod Grant.
What are some ways your nonprofit measures impact? Please share below in the comments.