Study: A Nonprofit’s Impact Is the Most Significant Consideration to Funders

Our sector is all about the promotion of social good. All of you are fighting day in and day out to raise awareness and find solutions to your organization’s mission. Whether it’s fighting child slavery, ending hunger or finding treatments for deadly diseases, you are all in this to create a better world.

And what keeps charitable organizations on their feet and in “business” is the funding that it receives. So, it’s important for organizations to understand what key attributes funders are looking for. According to “Social Solutions Foundation Reporting Study,” funders identify an organization’s impact the most important consideration for funding. The study reported 98 percent of funders said impact was the most important, followed by mission (49 percent) and legal nonprofit status (37 percent).

What does an organization’s impact really mean? When evaluating an organization’s impact, 67 percent of funders said that an organization’s outcome is the best indicator, followed by consistency to mission (16 percent).

Approximately 88 percent of funders said program outcomes and 41 percent said impact stories are important factors they look for when evaluating effective impact reporting. The least important factors were donation usage (16 percent), past performance (16 percent) and mission (14 percent).

“In the past 5 years, 57 percent of funders say their reporting requirements have increased. Looking ahead to the next 5 years, most funders expect reporting requirements to stay the same of increase more. Only four percent expect reporting requirements to decrease,” the study said.

To read the entire study, click here.