Why proven outcomes matter to nonprofit funders

Amongst the high volume of organizations applying for grants to fund their nonprofits, it’s imperative to stand out. The question becomes, why do grantors choose specific organizations? Is it an organization’s mission? Is it the trustworthy team members of an organization? Is it an organization’s potential for growth? Well, many would argue that what really matters to funders is an organization’s proven impact.

In the nonprofit world, hard data becomes incredibly meaningful for those reading the application. Many nonprofits disregard the power of proof and struggle to achieve financial stability because of it. In the mass of nonprofits in the world, all of which have admirable missions, tangible outcome is at the head of consideration for grant-readers. Below maps out a few reasons why that is the case.

Proven outcomes predict the future.

History predicts the future and is undoubtedly reliable in detecting patterns. Because donors already know this, data is king when it comes to securing funding for your organization and getting people to invest in your goals. In the words of a nonprofit advice article from The Muse, in order to get funding, an organization must present data from an outside research institution or from past program success to prove that an organization’s approach is sound. Without data, how are funders supposed to trust that an organization can and will incite real, positive outcomes?

According to a 2017 report from BDO on nonprofit data, “55% of [nonprofit] organizations said that some portion of their funders have required more information than was previously required.” Specifically, funders demanded  information on “outcomes and impact.” This is the information that funders need in order to commit to your organization. An organization has to prove that their goals are realistic before a donor can proceed financially.

Proven outcomes make donors more comfortable with their donation.

In a comprehensive research report conducted by Guidestar and Hope Consulting, titled Money for Good II, the two entities explored what funders look for in a grant application. According to Guidestar, 90% of donors told researchers that they “would support high-impact nonprofits if they could readily find information on organizations’ effectiveness.” Meaning, numerical transparency, particularly when it comes to impact, should be a priority for your organization when searching for funding sources.

Think of it like this: the primary way that a funder can discern if an organization is doing the most good that they can, is through exact numbers attached to that organization’s outcomes. There are few other concrete way for funders to trust your abilities. Furthermore, that same report from Guidestar and Hope Consulting shows that an organization’s impact reports often serve to justify a donor’s contribution. Of the donors that conduct research on an organization before giving, 63% said that they use data to “validate their donation.” Past proven outcomes can make benefactors more confident in their decision to give you money.

Proven outcomes show that you’re on the right track.

Nonprofits are, at their core, mission-driven entities. Consequently, achieving one’s mission should be held central to nonprofit leaders, and proven outcomes can ensure if one’s organization is on the right track.  That doesn’t mean that an organization has to be the best in their field, rather they just need to show that they’re making upward movements to their goals.

However, attaining outcome data can prove to be difficult. McKinsey & Company discusses the hardships that come with measuring impact, as there are frequently intangibles involved in an organization’s mission. So, the consulting firm makes a three suggestions for nonprofits in remedying these challenges: 1) to make an organization’s mission quantifiable, 2) to invest in research that reveals which methods work, or 3) to create smaller goals that correlate to larger success. All of these can lead to greater clarity when displaying  proven outcomes, which is important to prospective funders.

The main takeaway: invest in acquiring impact data and, in turn, get others to invest in your organization.


Three ways tracking data can improve your community-based organization

Keeping track of data can prove to be difficult for community-based organizations, especially if they are lacking the tools. The services, processes, and costs associated with tracking data can be intimidating, so it’s put on the back burner. Still, tracking data is incredibly important for an organization’s growth. Fortunately, managing data can be affordable and easy with the right programs, so that community-based organizations can continue to thrive!

Here are a few big benefits that come with tracking data:

Tracking data proves worth to funders

When it comes to getting funding, data exhibiting proven outcomes are a sure way to get noticed. Measuring success clearly shows that an organization values its impact, which in turn creates a stronger grant application for a community based organization. Being able to establish performance indicators through tracking data will demonstrate to funders that an organization is worth the investment. Funders take this to heart and, according to Salesforce, “more than half of funders require outcome data from their grantees, but less than 70% ever cover the costs associated with measurement…” Consequently, the responsibility of data management is left up to the organization.

Evidently, nonprofits that go the extra mile are the ones that acquire funding sources. We live in a world so fueled by data that it becomes a prerequisite for advancement. Although the data process can be a a weighty one, there are alleviating solutions, like Solve, to make an organization’s relationship with data easier. Solve is less expensive, more user friendly, and an easily accessible option for any community-based organization’s needs. That way, a nonprofit has a better shot at winning that funding.

Tracking data aligns staff on client statuses and interactions

Tracking data, in any given organization, helps to align staff around the same goals. When each employee knows the details of an organization’s outcomes, he or she can then structure their own objectives around that unifying goal. Under this system, each employee gains a sense of accountability. This provides employees with an understanding of how their individual contribution fits into the wider scheme of overall company outcome.

Tracking data also pinpoints the exact status and progression of clients, which keeps an organization centered around its purpose. For example, Solve software alerts community based organizations when one of their clients moves closer to a goal–such as the client being referred to a social service or getting a job interview. According to npENGAGE, “By tracking outcomes and indicators using an automated process and aggregating the data in one place, organizations are able to spend … more time on important decisions that drive operational effectiveness.” Having up-to-date information, like the kind offered by Solve, helps keep organizations both efficient and on the same page when it comes to the individuals they serve.

Tracking data provides valuable research

At its core, tracking data is just one of the many steps to conducting research. So when a person asks “why track data?” it’s synonymous to asking, “why conduct research?” According to McNabb, research is a process of acquiring data to either help solve problems or answer specific questions, and that research should always be purposeful.

Not only do community-based organizations need data to prove themselves to funders, but they also need that information to help them meet their own goals. Analyzing outcome data functions as a method of research that helps organizations to discern two huge things: where they are doing well and where they can improve. Impact data, which Solve puts in an easily readable format, makes it simple to identify and address the issues that may interfere with your organization’s business.

The main purpose of tracking data is to assist with finding solutions to problems, big or small. A little bit of data can go a long way.