What Today’s Donor Wants: Managing Expectations and Measuring Impact

A transformation of sorts has occurred over the last 20 years in regard to donors’ expectations of nonprofits. In years past, donors were generally satisfied with the act of giving itself, relying on little more than the assurances of the nonprofit beneficiary of their donation that their funds were being put to good use.

That’s no longer the case. Today, donors seek and require additional information by which to measure the impact of their donations and how the nonprofit is applying their contributions. Indeed, donors are acting more and more like shareholders of for-profit ventures, demanding more transparency, greater accountability and better results in regard to their social investments. The question therefore arises as to how nonprofits might successfully meet this new challenge.

How Did We Get Here?

While murky, we can probably make some informed guesses regarding the origins of this transformation. The culture has witnessed a sharp increase in quantification over the last 20 years, a circumstance likely sparked by our increasing reliance on technology. Technologies previously used almost exclusively by mathematicians and engineers have steadily saturated all facets of American industry, and our need for data has grown accordingly. It was only a matter of time before donors would seek to apply these technologies to the nonprofit world and demand that nonprofits develop metrics designed to measure the impact of contributions.

A small number of extremely affluent donors have made significant and highly-visible donations to nonprofits in the last two decades, donations significant enough to prompt those nonprofits into creating metrics sufficient to satisfy the specific expectations of those donors, so that they might be assured that their contributions were appropriately handled. These metrics have since drifted into the nonprofit world generally, increasing the expectations of all donors.

So, What Now?

Regardless of the origins of this transformation, it is likely a permanent fixture.

Accordingly, it is incumbent upon nonprofits looking to maintain or grow their donor bases to address this trend and acknowledge donors’ specific expectations. Primary expectations include:

1. Mission realization. It is indisputable that the most important consideration for today’s donor is mission realization. Donors want assurances that their dollars are actually making a difference, and insist on confirmation that their dollars are being applied to furthering the nonprofit’s mission. In short, they want tangible results.

2. Efficiency. A close second to mission realization is efficiency. Except in the most egregious cases, and subject to good cause, donors can be persuaded to overlook or forgive a nonprofit’s failure to satisfy its mission objectives. That being said, a donor is highly unlikely to overlook evidence that a nonprofit has failed to be a good steward of his or her contributions. Today’s donors want confirmation that their contributions are not funding exorbitant salaries and pay increases for management and staff, or
expensive office renovations or junkets.

3. Transparency. Today’s donor also demands transparency. Expectations regarding transparency have increased dramatically over the last two decades, with increasingly anxious donors demanding great visibility into nonprofit financial management, expense reporting, program execution, and other areas. Instead of
resisting transparency, nonprofits should embrace it. A transparent nonprofit suggests honesty and engenders confidence. Conversely, a non-transparent nonprofit suggests that questions exist concerning the health of the operation. Donors are far more likely to contribute to the former rather than the latter.

4. Accountability. Additionally, today’s donor expects accountability. Expectations regarding accountability have increased dramatically over the last 20 years, as donors demand that nonprofit management and staff respond to inquiries with specific facts and figures. The phrase “trust us” is simply insufficient.

How Do I Get There?

What should a nonprofit do to satisfy these expectations? How might a nonprofit fulfill shareholder requests in an increasingly demanding sphere? The most important piece of the puzzle to satisfying donors’ expectations is the development of appropriate metrics. A well-positioned nonprofit will take the time to develop and implement appropriate metrics so as to capture key data, and to thereafter publicize that data in a manner designed to inspire confidence among donors and potential donors. Among other things, a well-positionednonprofit will:

• Record and plot key mission and program achievements on a year-to-year basis, in order to demonstrate the nonprofit’s continuing diligence and commitment.
• Publish data demonstrating how contributions were apportioned between programming, salaries and expenses, etc.
• Periodically survey program participants and beneficiaries to gather data on program effectiveness.
• Periodically survey donors to collect their impressions of the nonprofit and the effectiveness of its programs.
• Track and publish success stories.
• Periodically sponsor open house or town hall events to address donor and constituent questions.

The well-positioned nonprofit will evaluate all options available to it in regard to meeting the challenges presented by increasing donor expectations and demands. The key to success is fostering a commitment to exceeding these demands.