There are over 1.5 million nonprofit organizations in the United States – that’s serious competition for funder attention and dollars. To stand out from other organizations, nonprofits need to ensure they’re reporting on what matters most to funders – understanding the impact of their funding. Philanthropic giving is increasingly results-driven, and funders are more likely to invest in a cause that can prove its positive impact with data. So, how does your organization do that? Producing strong and meaningful impact reports. Impact reports should illustrate the real impact your nonprofit is having in the communities you serve and include data that supports your stories.
Creating an impact report for your funders is more than just doing your due diligence. Yes, you should show your nonprofit is allocating funds where it said it would. But, tracking outcomes and measuring impact also shows funders that you’re achieving the goals you set out to achieve – together.
Here are four ways to improve your next impact report.
Go Beyond the Basics
Impact reports enable nonprofits to share their success stories in unique and engaging ways. Funder requirements may be rooted in data, but that doesn’t mean your reports can’t be engaging.
Let’s say your nonprofit specializes in K-12 education services. In your next annual impact report, include a data-driven story that details the impact your organization had on a particular student. This helps to add dimension and a human interest element to the raw data. And, it allows funders to see a real-world example of your nonprofit in action.
Instead of saying, “Our organization helped children graduate,” include context around what that means and why it matters. The statement then becomes a story. “We helped 20, low-income students graduate high-school this year. And of those 20 students, 15 received a scholarship to the college of their choice. Here are their testimonials.”
Whether you decide to engage funders using infographics, charts, or graphs, be sure to do more than report your data. Go beyond what’s expected and you’ll consistently impress your funders.
Maintain Communication with Funders
One challenge nonprofits face when creating impact reports is trying to satisfy the unique requests from each funder. For instance, major funders may ask for high-level financial data to help them forecast budget. Conversely, individual funders may ask for total volunteer hours or granular participant data.
Ultimately, the disparate definitions of “impact” between funders puts a lot of undue stress on nonprofits. Instead of meeting somewhere in the middle on reporting requirements, organizations must allocate the sparse time and budget they have to build a unique impact report from the ground up – for each funder. This isn’t a sustainable practice.
Luckily, starting a dialogue and maintaining constant communication with your funders will help to alleviate this challenge. Don’t worry about going above and beyond for every funder. If you communicate your goals and expectations, they’ll have the critical information needed to evaluate the impact of your programs.
Set Expectations
Nonprofits should feel empowered to educate everyone from funders to board members and corporate partners on future reporting plans. This puts your organization in a leadership position while providing visibility and setting realistic funder expectations. Before you begin planning your next impact report, try sending an email to major stakeholders.
Explain what they can expect to see in your annual report at the end of the year and why this is valuable to them. For instance, let them know the report will include data on the success of your fundraising campaigns, the health of your programs, and the social impact you had within the community.
Doing this allows your nonprofit to track program data with purpose as well as allocate the budget needed to create the report. It encourages transparency and honest communication between your organization and its supporters. And most importantly, it lets funders feel like they’re included and part of your cause.
Add a Human Touch to Your Impact Report
An impact report is an opportunity to strengthen the relationship between your organization and your community of funders. Technology helps to track and analyze the impact of your programs. But it’s not a replacement for the human aspect of donor stewardship. Adding a warm, human touch to your annual report will set you apart from the competition.
For example, first use software to track your programs and compile your report. Then, send a one-page overview of the report in the mail. Include some high-level data points such as your nonprofit’s accomplishments in the community for the year. Maybe your organization helped build a new local library – include a picture of the finished building! Finally, include a personalized, handwritten thank you card with information on when they can expect the full report via email. This touch of personalization helps funders feel special and appreciated. It shows your organization values its funders and views them not just as funders, but as part of your community.
The idea here is to use a blended method – where technology meets traditional – to get the best of both worlds. Funders who aren’t as tech-savvy will appreciate your thoughtfulness. And those who are will appreciate the use of modern reporting methods.
Put Your Best Foot Forward
Funders make critical funding decisions based on the information you share in your impact report. To remain competitive, it’s essential to give funders the data and full breadth of information they seek.
Impact reports give funders a seat at the table – they provide the visibility they need into your programs. Ultimately, reports can strengthen your partnership with funders while setting your nonprofit up for funding success.
Click here to learn how Social Solutions helps nonprofits track and report program impact.
