It’s no secret that many donors make their gift decisions by looking for non-profits with the lowest overhead percentage. For some reason, non-profits are expected to run their business on a shoestring. This expectation often results in limited funds for non-profits to invest in the necessary people and systems to perform effectively. How can non-profits get help to break the “overhead myth” about keeping overhead costs trimmed to the bone? How can non-profits shift the conversation from overhead to performance and impacts?
The Chamber’s Community Action Committee provided that help in its recent Non-Profit Forum, “Moving toward an Overhead Solution.” The forum featured a representative from GuideStar USA, Inc., an information service that collects, organizes, and reports data about U.S. nonprofits. GuideStar and other organizations in the non-profit space used their research to form a business case to help non-profits debunk the “overhead myth.”
Non-Profit Forum participants learned about the “Five Steps for Charting Impact” to help non-profits and their advocates direct donors’ attention to impacts and results instead of just focusing on overhead percentages. When non-profits address these Five Steps, donors clearly understand the value of their charitable gift.
1. Clearly document your non-profit’s objectives and intended impact. This not only informs your donors; it also sets the framework for measuring your impact and telling your story.
2. Describe the strategies employed by your organization to achieve its stated objectives and impacts. Donors are more inclined to support non-profits that connect strategic goals with action plans and expected results.
3. Discuss your capacity to deliver the programs and services necessary to meet your non-profit’s objectives. Include any plans to invest in capacity and increase impact, to help donors understand the need for infrastructure to support programs.
4. Tell donors how you measure your progress. This communicates that you are monitoring the achievement of your organization’s goals and helps donors trace the impact of their gift.
5. Share results from recent work and describe additional results that you want to achieve. Illustrating how successful projects add up to achieving you non-profit’s long term goals helps donors visualize their gift in action.
Charting your non-profit’s impact is one way to compel a donor to give. More tools and information to help non-profits to re-direct donor conversations from the “overhead myth” to performance and results can be found at www.guidestar.org and www.overheadmyth.com.