The global pandemic has changed the day to day lives of individuals and nonprofit organizations alike. Nonprofits are struggling to get the fundraising revenue they need as everyone is feeling the effects of the economic downturn resulting from the virus.
Many nonprofits are focusing their efforts on their long-term fundraising plans and in the meantime, simply keeping their doors open and their staff members paid.
However, as we adjust to the “new normal” and resources provided by the government such as the CARES Act start running out of funding or expiring, nonprofits need to find fundraising strategies that will sustain them through these troubled times.
One of the most important things that nonprofits can do to improve their fundraising strategies and adjust for the times is to put an emphasis on impact.
Individuals contribute to causes rather than to organizations. Therefore, showing them how their gifts are making a difference for your cause through financial transparency is always a great idea to further your fundraising efforts.
There are three different types of impact that your organization can show to your supporters. You can show them the impact donors make:
- On your long-term annual strategy and goals.
- Toward reaching your fundraising goal during campaigns.
- Toward your short-term goals and mission.
Within these categories are various strategies that your nonprofit can use to communicate the impact that your supporters have on your mission. We’ll walk through six of our favorite strategies within the categories in this article.
Ready to learn more? Let’s get started.
All of the combined contributions made by your supporters help your nonprofit achieve your long-term annual goals. Expressing your accomplishments that have resulted due to this combined generosity is a great way to explain the large-scale impact of supporters.
1. Form 990
Your nonprofit is required to communicate some elements of impact you’re making toward your mission to the IRS each year as a part of your Form 990.
Jitasa’s article on Form 990 filing explains the purpose of filing saying, “The Form 990 is the tax form that tax-exempt organizations fill out each year to remain compliant with the requirements of the IRS. It’s the IRS’s method of evaluation to make sure your nonprofit is legitimate and that you’re being financially honest.”
In order to ensure your organization is being “financially honest,” your nonprofit is required to report on key financial information about your organization as well as how you’ve used your finances in order to work toward your mission.
It’s important to recognize that your Form 990, due to the honest and transparent nature of the document, is a valuable fundraising tool because of the transparency it encourages.
- As you file your tax forms each year, your nonprofit should consider:
- Hiring an accountant to ensure all of the information on the forms is correct and well-documented.
- Posting your 990 so that you provide the financial data directly to your supporters.
Your nonprofit’s Form 990 is publicly accessible, so your supporters can go look it up if they so choose. However, even better than encouraging supporters to view this official documentation is providing them an extended version that offers additional context. This comes in the form of an annual report.
2. Extended Annual Report
Your nonprofit’s annual report is your organization’s opportunity to express the progress you’ve made toward your long-term goals and recognize the supporters who have helped you achieve this progress.
In your annual report, your nonprofit has the opportunity to express your financial information, including your fundraising campaign successes, your completed projects, and your plans that may not have turned out how you had originally planned. That’s right, you should be sure to include the “failures” that you’ve encountered.
By creating an extended annual report, your nonprofit can communicate the context in which things did not go as planned and outline how things will change in the future. This shows that you’re not only transparent with supporters, but constantly learning from your experiences.
In Bloomerang’s nonprofit annual report guide, they explain that the primary elements of a complete annual report include the following:
- Your financial information. A visual representation such as a pie chart of this information helps ensure your supporters can read it effectively. Be sure to express your fundraising expenses, your overhead expenses, and the costs associated with projects and programs in this chart. You can make a similar one with revenue, charting out the revenue from fundraising, grants, and fees for goods and services.
- A project report. This is your time to explain to your supporters all of the victories and project successes you’ve had over the past year. Essentially, it’s your time to really show the larger impact of all of the fundraising gifts you’ve received. Give an overview of the new projects that you’ve launched, those that you’ve completed, and others that are in progress. Get supporters excited about all of the philanthropic steps you’ve taken towards your mission. After all, this is what they’re funding by contributing.
- Appreciation for your supporters. In your annual report, you can give a shout out to your major donors who have made an incredible impact towards the successes you’ve had over the past year. By acknowledging their generosity in this wide-spread report, you not only show your gratitude, but you also provide an incentive for other supporters to give at the level of the acknowledged major supporters.
Expressing the impact of your combined donations and contributions from supporters allows them to see the big picture goals and achievements that have come about from their and other’s gifts throughout the year.
While annual reports and tax forms provide an effective overview of the annual goals and successes at your organization, rarely is this the only way that you should communicate impact to supporters. You should also make sure that supporters have an immediate understanding of how their contribution has made an impact on the specific campaign.
3. Fundraising Thermometer
A fundraising thermometer is a gamification strategy that provides additional incentive for supporters to give and help your nonprofit reach your campaign goal. The thermometer is generally placed directly on your fundraising page and provides a visual representation of your campaign goal.
When you choose your revenue goal for each campaign, you should make sure it’s based on your philanthropic need, is aspirational as to push the limits of your fundraising capabilities, and is achievable as to motivate your supporters to reach it.
Representing that goal on your fundraising thermometer allows supporters to see exactly how their donation will affect your progress to that overall goal. It provides the incentive to give more in order to help the bar reach the top of the thermometer and help your nonprofit reach its overarching objective. The many benefits of a fundraising thermometer include:
- It shows the immediate impact of a donation to help reach a goal, satisfying the desire for instant gratification after contributing to a campaign.
- It provides an effective and visual way to track your progress transparently with donors.
- It provides additional incentive to give, which encourages supporters to give more.
- It motivates your staff and volunteers to maintain momentum as the campaign continues.
Your supporters want your nonprofit to reach its goals. By engaging them and showing them how their donation can make this happen, your nonprofit can maximize the support you have from contributors to your campaign.
4. Supporter Acknowledgement
Another way to show your supporters the impact they’ve had on your specific campaign goals is to tell them! This is an especially effective strategy when it comes to major campaigns and major donors.
Take, for instance, a capital campaign that your nonprofit has been working so hard to carry out. You’re working your way through the quiet phase of the campaign, having synced up with your nonprofit bookkeeping and accounting team to make sure you have the fundraising capacity to reach the aspirational goals in both the quiet and public phases of the campaign.
You have five incredibly generous major donors who support you during the quiet phase of this campaign, contributing a bulk of the revenue that you need to reach your goal.
These are the supporters that you should acknowledge for their generosity in order to communicate the immense impact that they’ve had on your campaign.
You can acknowledge them in a few different ways:
- Keep these supporters in the loop as you proceed with the campaign. Give them progress updates and ask for their opinions and feedback on various aspects of the campaign.
- Shout out to the supporters on public platforms such as social media, your newsletter, or in your annual report.
- Organize an appreciation event with an exclusive invitation list. Be sure this event (or virtual event) is focused on stewardship and acknowledgment rather than fundraising.
Simple acknowledgment can make an enormous difference in your efforts to communicate the amazing impact your donors have on your nonprofit’s campaigns. Do your part to make sure they feel appreciated and understand the difference they’ve made for your mission.
5. Upfront Explanation of Gift Impact
As stated earlier, nonprofit supporters give to causes, not to organizations. Therefore, one of the best ways to reel in your supporters is to provide them examples of what their generous contributions will accomplish for the cause before they even give.
On your donation page, we recommend providing a simple explanation of the impact that various sizes of gifts can make toward your mission. This is an especially effective strategy when your nonprofit has included suggested giving levels on your donation page because it makes it easy for supporters to choose the impact they want to have before donating.
For example, a city homeless shelter asking for donations may use the following explanations of donation impact on their giving page:
- A donation of $25 will feed a homeless individual for a week.
- A donation of $100 will feed a family of four for a week.
- A donation of $500 will provide all food and shelter for a family of four for a month.
This shows the potential impact of specific gift sizes on the goals of the cause. When a supporter chooses to give $100, they’re really choosing to support that family of four for one week.
6. After-the-Fact Explanation of Gift Impact
Just as you can provide the explanation of impact before a donor gives, you may also choose to share the impact of gifts in response to the donations. This should become a natural part of your organization’s letters of thanks to supporters.
When you write a thank-you letter to your supporters, be sure to make it specific, personal, and include the impact statement regarding their contribution.
There are two ways you can accomplish this. The first is to explain the impact of each donation made to the organization. For instance, this letter may include phrasing like this:
Thank you so much for your gift of $100 to the Thoughtful Thanksgiving campaign. Your generosity has provided the Smith family, a family of four, with food for the entire week of Thanksgiving.
Or, you may decide to explain the impact of the entire campaign while still specifically referencing their individual donation. This letter may look something like this:
Thank you so much for your gift of $100 to the Thoughtful Thanksgiving campaign. Due to generosity like yours, this campaign successfully provided food for 500 families who would’ve otherwise had very little for the week of Thanksgiving.
Both approaches are effective, although the first is more personal and may better connect with the donor’s emotions. If you’re looking for more examples of full-length letters of thanks, check out the free templates from resources like this one.
As your nonprofit adjusts to the “new normal” that society has been hurdled into, remember the importance of communicating impact to your donors both and now and into the future. It’s a great way to show them that they can still make a difference even in these troubled times.
Jon Osterburg is the VP of Sales and Marketing at Jitasa a national accounting & bookkeeping services provider for nonprofits. Jon has been at Jitasa for 10 years. During his time there, he has lead and developed multiple teams within the organization, he’s been involved in everything from accounting, to client services, to sales and marketing and helping more than 100 nonprofits around the world with their finances as a leader. Previously he led and developed a division dedicated to the Boy Scouts of America, and managed the company’s M&A practice.