Like millions of Americans, I donate to multiple nonprofits … but I am (like millions of Americans) a small donor. And, occasionally, I am approached to make an ongoing gift to additional organizations. And when I consider whether to give to an organization, I like to do my homework.
How long has this organization been around? What do they do? What's their scope? Which communities do they serve? How do other donors feel about the organization? These are all the sorts of things I like to get a feel for before I give to a nonprofit. But also: Where's my gift going to go?
Sounds obvious, right? We all want to know where our gift is going to go. But I'd like to reframe the way we approach this kind of financial reporting.
Think of it as an opportunity to show your impact in more tangible terms.
It's important to publish your financials, but if you aren't already doing so, consider pairing them with a more human, more relatable metric. How many meals served? How many bikes distributed to underserved youth? How many nonprofits received technology support in the last fiscal year? (The answer, in case you were curious, is 305,000.)
Many organizations already do this kind of reporting. If you are, think of ways you can further enhance it to tell the story of your impact. If you're distributing grants to individuals, for instance, what's the breakdown per individual served, on average? This gives potential donors not just a read on the scope of your impact, but the way you're improving the lives of actual people in your community.
As a nonprofit employee, I know the fallacy of thinking that "overhead" is tantamount to "waste." It isn't necessarily. It takes some amount of money to keep the lights on, after all. So don't be afraid to make a clear connection between these sorts of expenses and how they enable you to do the work that you do.
If you're paying support staff that aren't directly involved in your programmatic work but are critical to keeping your organization running (HR, operations, and so on), consider shining a light, in some way, on those critical functions. Maybe give your potential donors an idea of your technology expenses — and how those investments are allowing you to better serve your community, even if it isn't directly tied to your programming.
In addition to making your financial metrics more relatable, you may be noticing another theme here: Transparency. By being up-front with your reporting in this way, you're not only telling a more cohesive story about how donor funds get used; you're also being more accountable to your funders, your donors, and, most importantly, those you serve.
We've got a selection of products in our marketplace that you can use to manage your financial reporting and make sense of it.
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