Picture this. You’re sitting around with your colleagues in the conference room and the “boss” tells everyone that they have to figure out what percentage of the newsletter or the latest appeal can be “counted” as education because your fundraising ratios are too high.
So you all sit around arguing about this and that until someone in the room finally feels good about the outcome…3 hours later.
I’ve been in those kinds of meetings…and I would say they are about as close to hell as it comes.
And why do these meetings take place every day in non-profits around our country? Because somebody, or some group of people, somewhere at some time decided that a low overhead/fundraising ratio meant that you had the greatest non-profit ever.
We all know this is a bunch of crap. And, like we really believe it when some organization states that 99% of donations go directly to program. Yeah, right. Talk about creative accounting. It’s time to put an end to this game we’ve all been playing and get real.
I’m sensing in our profession that ratios are starting to lose steam. I mean, last week I think I read five or six tweets or blogs that talked about how donors now care about results and outcomes. “Donors want to see results!” “Donors are hungry to see outcomes.” These are the types of headlines I’m reading almost every week.
The Hewlett Foundation wrote a massive white paper on donors wanting to see outcomes and impact a couple of years ago.
Even watchdog groups are starting to move beyond overhead costs. Amazing!
And it’s true. The donors I talk to, especially major donors, want to know what the impact their gift has had and how it has made a difference.
But here is what I’m concerned about.
While the “talk” is moving in the right direction, I still haven’t seen the action. When I talk to groups about moving from ratios to results, I see a lot of nodding heads and mouthing of “yes” in the audience, but I wonder if they really understand what they are saying yes to.
I can imagine the cheering to get rid of ratios, but a complete non-awareness of what “reporting on results” actually will mean for their non-profit.
My brother-in-law is the president of a software company that helps non-profits measure impact. (Yeah, it’s weird. My whole family works with non-profits.) He’s been at it for years. In the beginning they started by trying to sell directly to non-profits, but sales were tanking.
They finally realized that they needed to sell directly to foundations and major donors who would stipulate that whoever received a grant from them had to use the software to measure the impact…and their sales started to take off.
Now, that’s great for him and his company…but I think it’s embarrassing for our industry.
See what’s happening? Only when DONORS “forced” non-profits to use the outcome-based reporting software, did the non-profit actually use it.
I’ll let you in on a secret. If you can get your non-profit to be PROACTIVE and start measuring outcomes, results and impact, you will be positioned to attract major donors who are starting to demand it with their investments. YOU will have a competitive advantage if you ACT now and start getting serious about changing your culture of RATIOS.
Don’t wait for your donors to demand it from you.
You need to realize though, that this will come at a cost. It takes personnel, time and energy to start evaluating the impact of the work you do. But that’s the way it should be. And really, shouldn’t you WANT to know what the impact is?
Be ahead of your competition. Start measuring and reporting on the impact of the work you do and communicate it to your donors. You’ll be way ahead of others in our industry.
At the very least, you’ve got to stop those stupid three-hour meetings about which article in your newsletter should be attributed to education…please.
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