Most nonprofit organizations overestimate how much donors know about them. Maybe donors don't check social media often, or perhaps it's been months since donors received an update. Donors may even begin to wonder what their money is going toward. If this is the case for some of your donors, it's time to ramp up your impact reporting game.
Demonstrating impact creates a trusting relationship between the organization and the donor and attracts more support from both current and potential donors. There are several ways to better communicate your goals and impact to the donor and keep the mission moving forward.
1. Define Outcome vs Output
The term "impact" means different things to different people. Often, people associate this term with others, like "outcome" and "output." But these words are not synonymous. For donors to truly understand your organization's goals and progress, you must first define and differentiate between outcome and output.
Output refers to what efforts your organization is making to create change — or the outcome. In other words, the output is the means to an end.
For example, if a soup kitchen serves 300 meals a day, their output is those meals. But the outcome — and its success — depends on the soup kitchen's goals. Was the only objective providing meals to feed people? If so, the outcome was positive. But if the goal was to help homeless people stop using opioids, the meals are one step toward reaching that.
Therefore, the definition of an outcome depends on the purpose of your organization and how you define that purpose. Donors must understand the result you're trying to accomplish to make sense of your efforts and output. It helps them see the bigger picture, making them more willing to donate.
2. Communicate Long-Term Incremental Impact
Once you effectively communicate the big picture to potential donors, you must keep them updated over this long-term period of change. Because, if an organization has goals worth achieving, odds are they won't meet all of them overnight, even with all the support and money in the world.
Choose to only communicate outputs and efforts that are directly creating positive outcomes. For example, if the same soup kitchen went from serving 300 meals to 500 in a week, they might feel tempted to share this with donors. However, if this increase had no value toward helping them achieve their goal, this seemingly positive fact is nothing more than an empty statistic.
Instead, only share impact when it creates change that coincides with your organization's goals — even if this is only monthly or yearly.
3. Suggest Gift Amounts
Assuming your campaign for change is compelling enough to urge people to donate, you can get the donor thinking about impact immediately by suggesting gift amounts. This strategy helps donors decide how much to give, while letting them preview the potential impact of the gift all at the same time.
Suggest a smaller gift amount that "can feed one family for a month" and large amounts that "can send volunteers to the village to work on putting in a well." That way, the gift is not going toward a vague purpose, but, instead, gives the donor a tangible idea of how and where the organization will use their money.
4. Express Gratitude
Your entire report and all communication should always be a giant expression of gratitude. Immediately after a donor contributes money, regardless of the amount, the organization should express sincere gratitude. Remind them how much their generosity means to with phrases like, "Your gift will help send a child, like Lois, to school."
Another way to express gratitude is to tell a story. Do this by gathering testimonials from people directly impacted as a result of donor donations. Video testimonials and letters are powerful ways to express gratitude.
5. Make the Donor the Agent of Change
Ultimately, the donor wants to feel valued. They don't want to know what you and your organization are doing to create change — they want to know how they, as the donor, are helping fulfill a specific purpose.
For instance, using reports to talk about how the organization is creating change turns donors off and makes them feel excluded. Using words like "we" and "us" can create false walls between the organization and the donor base.
Instead, an organization can use the word "you" for a more inclusive report. "You allowed us to feed 300 homeless people." "Your generosity made a difference." Rephrasing reports to focus on the donor will make them feel valued and lead them to donate more because the organization is counting on them.
The Future of Impact Reporting
While some organizations still distribute printed impact reports in the form of letters and brochures, the majority are switching to digital formatting. These may take the form of videos, images, social media posts or websites. So, how are you sharing your impact report with donors?