In the for-profit world, executives are often discussing a company’s or project’s return on investment (ROI). These entities are often judged by their ability to create sufficient ROI for their investors. One of my favorite shows is Shark Tank. The show features some of the U.S.’s wealthiest investors who spend their own money to invest into contestants’ ideas, products and startups. ROI is important to the Sharks. Shark Lori Greiner invested $200,000 for 20% of one company, which went on to gross $100 million. I’d say Lori is pleased with that ROI! INC. published a blog a few years ago called 10 Things Shark Tank Investors Look For.
Yes, I know you are NONPROFIT leader, but stay with me for a minute.
Here’s the list of ten.
Something they are interested in
A proven ROI
Someone they respect
Someone who’s committed
High profit margins
Affordable products and services
A realistic negotiator
A full-time founder
So…what does this have to do with YOU as a nonprofit executive?
Over a century ago leading philanthropist John D. Rockefeller said, "Giving should be entered into in just the same way as investing. Giving is investing.”
Your donor is your investor. ROI does not have to be, nor should it be, limited to a for-profit concept.
Andrew Urban discusses ROI in the context of nonprofits in his book “The Nonprofit Buyer”, except he calls it ROM: Return on Mission. He says, “ROM is a method of measuring the impact that a financial investment has on the organization’s ability to achieve its mission.”
For donors, particularly major donors, requesting evidence of ROM is becoming more common.
I believe today’s major donors care about the same 10 things as the Sharks...
1. Something they are interested in
Naturally, donors are drawn to support a cause that interests them.
2. A proven ROI
Donors care about your outcome metrics. Showing cost per life served is important. Which is more compelling? “We need $50,000 for outreach.” “We need $50,000 for a new medical unit to reach 5 college campuses, saving 50+ babies.” We need to show ROI.
3. Someone they respect
Donors know that the quality of the program rises and falls on the quality of the board and staff.
4. Someone who’s committed
Donors like to give to organizations that show a committed board with 100% giving.
5. Long-term potential
Donors understand the need for succession planning. They want to know how you will keep the organization going through the inevitable leadership transitions that will come your way.
6. High profit margins
Remember, nonprofit is a tax status - not a financial situation. Donors understand our need to generate more resources so that we can continue to deliver programs that accomplish our mission. Telling a donor “None of our staff receive paychecks” may feel noble, but the donor knows that is not sustainable in attracting top talent for long-term positions. To flourish as an organization, you must think like a for-profit business. This means developing a plan for financial sustainability and adopting various business standards. Donors respect this way of thinking (drop the hat-in-hand approach).
7. Affordable products and services
While most nonprofit programs are offered free of charge to those being served, it’s important to ensure your programs are easily accessible. One way to do this is through collaborative partnerships with other community nonprofits who can make referrals to your organization. High impact nonprofits understand the value of partnerships.
8. A salesperson
A good salesperson knows how to build strong relationships. They also know how to listen. Major gifts fundraising is no different. It’s about building strong relationships and listening. Listen to your donor, not with the intent to reply, but with the intent to understand them. Your donor will love this approach (listen more, talk less). It will get you invited back to that next visit!
9. A realistic negotiator
Be realistic with your donors. Don’t over-promise and under-deliver. Set SMART goals for your programs (specific, measurable, attainable, relevant and timely) and communicate them to your donor in a clear, concise and compelling way.
10. A full-time founder
Founders and/or Executive Directors fulfill vital roles in the nonprofit. This person(s) should be highly engaged. It is hard to grow without a full time Director, especially if that Director has “a day job” pulling their attention in other areas. Donors care about your human resources.
Developing a Major Gifts Fundraising Program is a crucial part of a successful nonprofit organization’s fundraising strategy. Join me on June 7th and 21st for a "Virtual" Major Gifts Program Intensive Workshop. This 2-day live, interactive workshop offers 6 hours of major gifts fundraising coaching from the comfort of your own home or office. Only 15 spots left!
See the full agenda HERE.
Only $199 for both days for up to 3 team members at no additional charge.