ROI For Nonprofits: The New Key to Sustainability

by T. Ralser

Explore the methods and processes to help nonprofits raise money in an environment that increasingly demands accountability, transparency, and results. The realities of today's economic environment have required that nonprofits, and those that raise money for them, make their case for support as strongly as possible. Warm and fuzzy appeals that tug at the heart strings have met with limited success. Assuming that funding targets intuitively know the value of the good work being done is unrealistic. The Key to Nonprofit Sustainability offers an abundance of pragmatic tips, tools, case studies, and techniques to make the process easy to understand and implement.

Genres: Nonfiction

176 pages, Hardcover

First published November 9, 2007

Reviews

[Elaine · Rating 4 out of 5]

Well, you can tell a CPA wrote this! Lots of head knowledge ideas with some practical takeaways infused. The examples used to show how to apply the knowledge are helpful for smaller startup orgs, and primarily NGOs that do more local work. Still, I did highlight some areas that were “a-ha” moments.

[David · Rating 4 out of 5]

Interesting case studies and a lot of practical advice

[Tamara · Rating 5 out of 5]

During a levy year, this book would prove to be invaluable. Finding a way to appeal to voters' pocketbooks is a must when you want to pass a levy. To explain to voters that their tax dollars are an investment in a service that will appreciate over time is essential!

Favorite Tidbits:

The National Center for Charitable Statistics says that 1/2 of those who give to charitable organizations give less than $500. Only 6% give more than $5,000. 50% of donors give to churches or religious organizations.

The American Cancer Society, the Red Cross & the Salvation Army are the top non-religious nonprofit fundraisers in the United States. Marketing efforts to raise funds cost an average of 8.3% of these organizations' total income.

When establishing ROI, emphasize the following: What are you going to do? How much will it cost? What will be accomplished?

People give the most when the right person with the right cause are combined.

The requests we most likely will respond positively to, are those which are personal, are compatible with those issues we believe are important, and are made by a person we respect.

Various areas of focus: The value of the organization as an entity (i.e. the jobs an organization creates), service delivery values, societal costs avoided and social outcomes enhanced.

Ways to calculate ROI: local economic impact, social impact per dollar invested, return per dollar spent.

Five steps to demonstrating value:
1. Determine the motivations of your stakeholders (i.e. taxpayers)
2. Develop a program with definable outcomes.
3. Translate outcomes into specific benefits.
4. Demonstrate effectiveness in investment terms.
5. Report results on a regular basis.

Primary versus Supporting Customers: a primary customer is the person whose life is changed through your work. A supporting customer is a volunteer, member, partner, funder, referral source, employee or other who must be satisfied.

Education, health and economic development are the most popular areas in which enhanced outcomes can be demonstrated.

Ways to Apply ROI to Libraries:

Come up with a return-on-investment analysis of your primary missions, such as your ready-to-read initiative and how it saves tax dollars by not requiring as many teachers in public school or as much specialized attention/training, graduating more kids from high school, fewer kids being held back a grade, etc.

Come up with a return-on-investment analysis of your job search help efforts by gathering statistics of how long it takes patrons to re-enter the workforce with your help versus the national average, etc.

[Blaine Welgraven · Rating 5 out of 5]

"Nonprofits are not that different from for profits. This statement alone causes heated discussion and may lead many to dismiss the concepts in this book. The management skills needed may be different. The "mission" is different. The single concept that is not different is that both nonprofits and for-profits must provide value to investors. If a for-profit organization does not do this, the market puts it out of business. If a nonprofit does not do this, the market does not fund it"--Ralser, Chapter One: Demystifying the Status Quo

Ralser writers with a clarity and precision long sought by many within the nonprofit and development world, clearly encompassing the fundamental shift that has occurred in the past 15 years throughout the industry, i.e., "the shift to value being demanded by those who invest in nonprofits." Ralser convincingly argues that, "economic models can be applied even to the soft (read: qualitative) parts of our sector," and then proceeds to make the case for measurable investments within short, concise chapters. Of particular note for the novice development specialist, Ralser spices his economic lingo and data-driven paragraphs with pithy aphorisms such as "all shared values are recognized values," allowing even the reader with only a modicum of economic understanding to comprehend, digest, and ultimately implement Ralser's advice. His models are all readily workable, manageable by even the smallest development team. With his eminently readable style and highly practical models, Ralser's ROI for Nonprofits makes clear its intended audience from the get-go: small to mid-sized nonprofits. At a time when it is these nonprofits most feeling the residual effects of 2008, Ralser's book is both a real resource and a genuine strategy. I haven't found many like it within the nonprofit world. Highly recommend.

[Adam Lehavi · Rating 3 out of 5]

Important and useful content, drawn out explanations.