Raise More Money By Showing Donors the ROI of their Gift

One of the biggest misconceptions of the Nonprofit world is that corporations and larger foundations are the biggest givers. In fact, it’s actually the complete opposite- over 70% of donations come from individual donors. 

Of course, there's always the draw of making a tax-deductible donation, but there are several additional factors that motivate donors to give. They might be moved by your foundation's cause, its proximity, or by its unique marketing. 

However, one of the most important factors that determine where donors choose to direct their gifts is the potential impact that their dollars will have within the organization. 

In order to inspire, motivate, move, or convince your potential donors to choose your organization, you need to learn how to show donors the complete ROI on their donations. 

Dollars & Cents: ROI by Donation & Other Useful Nonprofit Fundraising Metrics

Program Efficiency

What will this tell you? Calculating program efficiency does double duty by helping you assess how efficiently your nonprofit is fulfilling its mission statement, while also giving you a powerful tool to show your donors how effectively your organization operates (i.e. how much of their donation will go toward good deeds rather than administrative costs). 

How can this help your Nonprofit? Donors want to know exactly how their dollars are being spent. Measuring this will help your donors determine which program they will want to contribute the largest amounts to. They are usually the programs with the most tangible results. 

The more you can demonstrate to a donor how their contribution impacts the agency and its clients, the more money you can raise to improve outcomes. 

How we help our Nonprofit clients see this: 

Program Efficiency = Program Expenses / Total Expenses

When you have visibility into the economics of your programs, you are able to assess the value of each program output. The programs with the highest efficiencies are the programs you want to focus your fundraising efforts around- the ones with the highest outputs. You know these will have the highest impact that you will be able to show donors.

Donation ROI

What will this tell you? Use the donation ROI equation to determine how much your organization spends to bring in donation dollars. 

How can this help your Nonprofit? Using this metric, you can determine your most successful events, fundraising channels, and donor types. You can see whether any fundraising channels are costing your organization more money than they're generating. Using this information will help you strategize which channel to target. 

How we help our Nonprofit clients see this: 

Donation ROI = Total Fundraising Costs / Total Dollars Raised

This metric can be used both organization-wide, and a microscopic view- by fundraising event, campaign, donor type, or channel. For example, look at the donation ROI for a silent auction event, a direct mail campaign, funds raised through your website, or for a social media campaign. 

Beneficiaries Served 

What will this tell you?  Calculate the number of beneficiaries served over a specific period of time or program to compare various outreach efforts and to see how your impact grows.

How can this help your Nonprofit? To determine your impact, you need to know how many people your organization has reached. This will further help you see if your efforts are reaching them enough to achieve the nonprofit's intended missions. Plus, this will give you a nice number to be able to share with Donors, so they have a tangible number on how many people they have reached from their gift. 

How we help our Nonprofit clients see this: 

Beneficiaries Served = Number of Beneficiaries / Period of Time or Program

Measuring these outcomes will help you determine which programs you should allocate more of your fundraising budget to increase your impact.  

Beyond the Numbers: 3 Ways to Show Donors the Impact of Their Donations

You know better than anyone else that donations to your organization cultivate an ROI that extends beyond the dollars and cents. 

The true impact of a nonprofit is priceless. Nonprofits impact entire communities. They feed, educate, shelter, connect, and inspire. The cumulative impact of any single nonprofit's efforts is powerful enough to change the future. 

So, how can you show your potential donors the full extent of the potential impact of their donations?

For 3 ways to show donors the impact of their donations, read the full article HERE.