Why proven outcomes matter to nonprofit funders

Amongst the high volume of organizations applying for grants to fund their nonprofits, it’s imperative to stand out. The question becomes, why do grantors choose specific organizations? Is it an organization’s mission? Is it the trustworthy team members of an organization? Is it an organization’s potential for growth? Well, many would argue that what really matters to funders is an organization’s proven impact.

In the nonprofit world, hard data becomes incredibly meaningful for those reading the application. Many nonprofits disregard the power of proof and struggle to achieve financial stability because of it. In the mass of nonprofits in the world, all of which have admirable missions, tangible outcome is at the head of consideration for grant-readers. Below maps out a few reasons why that is the case.

Proven outcomes predict the future.

History predicts the future and is undoubtedly reliable in detecting patterns. Because donors already know this, data is king when it comes to securing funding for your organization and getting people to invest in your goals. In the words of a nonprofit advice article from The Muse, in order to get funding, an organization must present data from an outside research institution or from past program success to prove that an organization’s approach is sound. Without data, how are funders supposed to trust that an organization can and will incite real, positive outcomes?

According to a 2017 report from BDO on nonprofit data, “55% of [nonprofit] organizations said that some portion of their funders have required more information than was previously required.” Specifically, funders demanded  information on “outcomes and impact.” This is the information that funders need in order to commit to your organization. An organization has to prove that their goals are realistic before a donor can proceed financially.

Proven outcomes make donors more comfortable with their donation.

In a comprehensive research report conducted by Guidestar and Hope Consulting, titled Money for Good II, the two entities explored what funders look for in a grant application. According to Guidestar, 90% of donors told researchers that they “would support high-impact nonprofits if they could readily find information on organizations’ effectiveness.” Meaning, numerical transparency, particularly when it comes to impact, should be a priority for your organization when searching for funding sources.

Think of it like this: the primary way that a funder can discern if an organization is doing the most good that they can, is through exact numbers attached to that organization’s outcomes. There are few other concrete way for funders to trust your abilities. Furthermore, that same report from Guidestar and Hope Consulting shows that an organization’s impact reports often serve to justify a donor’s contribution. Of the donors that conduct research on an organization before giving, 63% said that they use data to “validate their donation.” Past proven outcomes can make benefactors more confident in their decision to give you money.

Proven outcomes show that you’re on the right track.

Nonprofits are, at their core, mission-driven entities. Consequently, achieving one’s mission should be held central to nonprofit leaders, and proven outcomes can ensure if one’s organization is on the right track.  That doesn’t mean that an organization has to be the best in their field, rather they just need to show that they’re making upward movements to their goals.

However, attaining outcome data can prove to be difficult. McKinsey & Company discusses the hardships that come with measuring impact, as there are frequently intangibles involved in an organization’s mission. So, the consulting firm makes a three suggestions for nonprofits in remedying these challenges: 1) to make an organization’s mission quantifiable, 2) to invest in research that reveals which methods work, or 3) to create smaller goals that correlate to larger success. All of these can lead to greater clarity when displaying  proven outcomes, which is important to prospective funders.

The main takeaway: invest in acquiring impact data and, in turn, get others to invest in your organization.

 

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