Tag Archives: revenue

Research and transparency can increase charitable support

Over the last five years, we’ve witnessed an interesting progression with donors and volunteers. As a result of charitable competition, economic forces, and electronic capacities, today’s donors are increasingly curious, analyze before acting, and desire greater connectivity. When donors consider non-profit organizations for their contributions, a number of factors come into play, including the donor’s relationship, belief in the mission, and geographical location. Many times, this isn’t enough information for a prospective donor to render a decision.

In an article, written by Forbes magazine columnist Matt Brady, last September, he wrote, “Since wealthy donors want greater impact and demonstrable results from their giving, the onus is increasingly on charities to provide greater transparency in how they are spending their money and more evidence of the effect of their efforts. Smaller, nimbler and more accountable charities are becoming increasingly attractive to donors vs. large, traditional ones.”

In our many conversations with donors and volunteers, they gain the most satisfaction when supporting efficient, well-operated organizations. When asked what they look for when determining their charitable support, the answers have fallen within the following five predominant categories:

Data & Efficiency

A review of financial information, such as figures found on IRS Forms, enables the donor to analyze a non-profit organization’s financial information. The donor can then determine organization’s efficiency, capacity, and overall financial health.

Finance & Fund Development

Non-profits have an obligation to act as responsible stewards in managing their financial resources. They must comply with all legal financial requirements and adhere to sound accounting principles that produce reliable financial information, ensure fiscal responsibility and build public trust. In addition, non-profits act as the intermediary between donors and beneficiaries and have an ethical obligation to ensure proper handling of funds to carry out their missions.

Governance

A non-profit’s leadership, represented by its staff and board of directors is responsible for defining the organization’s mission and for providing overall leadership and strategic direction to the organization. Each non-profit board should: ensure that the organization has adequate resources to carry out its mission and provide direction for the executive director and key staff; and evaluate its own effectiveness as a governing body and as representatives of the community in upholding the public interest served by the organization.

Human Resources

The ability of an organization to make effective use of the energy, time and talents of its employees and volunteers is essential to accomplish the organization’s mission. Non-profit organizations should place a high priority on exercising fair and equitable practices that attract and retain qualified volunteers and employees. Nonprofits have an obligation to adhere to all applicable employment laws and to provide a safe and productive work environment.

Public Information

Non-profits that provide information to prospective donors and other constituents promote informed and responsible philanthropy. Donors are better able to make decisions when they can learn a nonprofit’s purpose, who governs it, how it manages its financial resources, whom the nonprofit serves, and what progress it has made toward achieving its mission.

We’re excited by this movement, as I believe we’ll see increases in financial and voluntary support as well as stronger organizations which receive the support. In fact, NPcatalyst has created a tool designed to drive support to non-profit organizations while, at the same time, rating each organization according to the various performance indicators. It’s called NPHealthCheck and can be found at www.npcatalyst.com.

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