Grants from foundations and charitable trusts are an important part of any nonprofit’s balanced funding portfolio. According to the latest Giving USA Annual Report on Philanthropy, grants from foundations made up 16% of all charitable giving, amounting to $66.9 billion, a six percent increase over the prior year. With the money available from funders for nonprofits increasing, it’s never been more important to understand what these funders are looking for in the organizations they select for funding.
Multiservice nonprofits and collaboratives, which provide community assistance across a range of service areas, are an important focus area for many funders. And taking advantage of funder grants can help multiservice nonprofits bring in more money to deliver more mission and change lives in the communities they serve. So what do the funders of multiservice nonprofits really want?
In this report, you’ll learn:
- The most important factors considered by funders when evaluating nonprofits in the multiservice sector
- The impact of data and analytics on reporting
- Preferences for information, formatting, and channels when evaluating nonprofits in the multiservice sector
- Past, present, and future demands for reporting
We surveyed a group of representatives from various foundations and charitable trusts, which we call funders, who selected Multiservice or Collaboratives as a sector that their organization or trust serves. The objective of this survey was to pinpoint criteria that funders use to determine where their funding dollars go. All responses were voluntary, confidential, and anonymous. The survey was distributed between November 2018 and January 2019.
Top 3 Most Important Consideration Items for Funding Multiservice Organizations
More than 4 out of 5 funders (83%) say Impact is among their most important considerations for funding. This is even higher than the baseline average across all nonprofit sectors (78%), meaning that proving your impact is of even greater importance for multiservice nonprofits. Sustainability (47%) and Mission (41%) round out the top three. This sets multiservice funders apart, as funders overall prioritize mission over sustainability. If your multiservice organization is seeking funding, take note of the importance of sustainability!
Best Indicator When Evaluating a Multiservice Organization’s Impact:
What’s the single best indicator of a multiservice nonprofit’s impact? Outcomes, by a landslide. 56% of funders look primarily to outcomes as a measure of impact. Ensure that your organization can measure and showcase outcomes to funders as this will be a determining factor in their funding decision.
Top 3 Things Funders Look for in Reporting
Knowing that Impact, Sustainability, and Mission are of utmost importance to funders, how does your multiservice nonprofit demonstrate your ability to meet a funder’s top considerations? Outcomes again lead the way, with 83% of funders looking specifically for your program outcomes. Budgets (42%), and Impact Stories (41%) are also sought after by more than 40% of funders.
Top 3 Reporting Areas Where Data and Analytics Add the Most Value
To tell a powerful impact story, you need data and analytics. When asked to choose the top three areas where data adds the most value, Outcomes (83%), Outputs (53%), and Budgets (47%) all received significant shares of votes. Be ready to back up critical proof points with meaningful data.
Data’s Positive Impact on Funders
Data and analytics have a big impact on funding for multiservice nonprofits. 89% of funders are more likely to fund an organization that incorporates data into its reporting. And 63% are very likely to prefer organizations that are incorporating data into their reporting, and impact stories.
Preferred Reporting Formats
Funders make critical decisions based on the reports multiservice organizations share. What are they looking for? Impact Stories and Graphs and Charts were cited as the top two desired formats by 66% and 44% of funding organizations respectively. Keep these formats in mind as you create annual reports, as having your impact story already optimally packaged can make new funding applications easier, faster, and more effective.
Preferred Reporting Vehicles
How do multiservice funders prefer to receive and analyze reporting information to determine impact? The answer is clear: digitally! Though this data represents funders as a whole, always be aware of specific format requirements from your individual funders.
Changes in Reporting Requirements:
If it seems like reporting requirements from multiservice nonprofit funders have increased in the past five years, it isn’t your imagination. 58% of funders say they have made changes to their requirements. And it’s not over yet – 61% say their reporting requirements will increase over the next five years.
Conclusion: What Multiservice Funders Want
Providing funders with the information they seek can have a big impact on the success of your multiservice nonprofit. With 83% of multiservice-sector funders placing Impact in their top three considerations for funding, it’s clear that your organization should know how to showcase impact.
Most multiservice funders (83%) cite Outcomes as an important determinant of a multiservice organization’s Impact. And with nearly 9 out of 10 funders preferring reporting supported by data, the importance of data cannot be understated. Data and analytics not only help you demonstrate outcomes and support your impact stories, but are specifically sought-after by funders.
Incorporating data into the areas that multiservice funders focus on most, including impact, outcomes, budgets, and impact stories, will set your nonprofit up for funding success.
Funding Sectors Surveyed
Arts & Culture, Child Services, Education, Environment, Health Services, Human Services, Housing, Homelessness, Collaboratives & Multi-Service Organizations, Reentry, Domestic Violence & Sexual Assault, Community Development, Youth Development, Workforce
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