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Financing Not Fundraising: The Message of Social Impact

By Nell Edgington



In part 5 of our ongoing blog series, Financing Not Fundraising, we are discussing how to move fundraising messaging away from organizational needs and toward social impact. In so doing, a nonprofit can enjoy an individual donor base that is more invested, engaged and committed to the work the nonprofit does in the community.

To recap, our Financing Not Fundraising blog series was born out of the reality that fundraising in the nonprofit sector just doesn’t work anymore.  In fact, traditional fundraising is holding the sector back by keeping nonprofits in the starvation cycle of trying to do more and more with less and less. Really, what the sector needs is a financing strategy, not a fundraising one.  That means that nonprofits have to break out of the narrow view that traditional FUNDRAISING (individual donor appeals, events, foundation grants) will completely fund all of their activities.  Instead, nonprofits must work to create a broader approach to securing the overall FINANCING necessary to create social change. You can read the entire series here.

Fundraising often uses the messaging of organizational need:

  • “We need $100 to provide our programs.”
  • “We need $1,000 to meet our goals.”
  • “We need to build a new building.”

But that’s not how to raise money effectively.  To raise significant money, nonprofits need to focus on how they translate money into social impact. The fundraising message of organizational need stops at the nonprofit. The fundraising message of social impact takes the argument much further, demonstrating how a nonprofit translates funds raised into social change, through a three step process:

    1. A donor invests in a nonprofit organization

 

    1. That investment is translated by the nonprofit’s theory of change into some sort of social impact

 

  1. Some change occurs in the community as a result

The nonprofit is merely an intermediary between a donor and social impact. Therefore, the donor is not investing in a nonprofit organization, rather they are investing in the social impact the nonprofit creates.

Helping to create social change is much more powerful to a donor than simply helping a nonprofit organization. And it garners larger, more long-term donor investment and engagement in the work of the organization.

To understand this more clearly let’s take a look at how the message of organizational need differs from the message of social impact:

In every way, from the focus of the messaging, to the fundraiser’s approach to donors, to the donor mentality, to how the organization operates, an organizational needs mindset is so much more limiting than a social impact mindset.

So what does this actually look like in fundraising messaging? Let’s take an example of an after-school program for at-risk children.

According to the nonprofit’s theory of change, they translate dollars into positive outcomes for the children in their charge (increased student achievement, fewer high-school drop outs, fewer behavioral issues, etc.).  If the organization were to fundraise around the organization’s needs it might sound like this:

“Help us  reach our goal of raising $100,000 for our program.”

But if instead they were to fundraise around a message of social impact, it might sound like this:

“Invest in our work to give kids a better future, making them contributing members of society and our community stronger and healthier.”  The first message is about strengthening an organization, the second message is about strengthening a community.

The message of impact is not just something nonprofit’s should use for major donor asks. It can be used to varying degrees in all fundraising campaigns, large or small, and in all channels (social media, direct mail, email, in-person). In so doing, the organization is creating a loyal following of donors who believe in the change the nonprofit is creating and view themselves as critical partners in making that change happen. For help crafting your nonprofit’s message of impact, download our Creating a Case for Support Step-by-Step Guide.

If you want to learn more about applying the concepts of Financing Not Fundraising to your nonprofit, check out our Financing Not Fundraising Webinar Series, or download the 27-page Financing Not Fundraising e-book.

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About the Author: Nell Edgington is President of Social Velocity (www.socialvelocity.net), a management consulting firm leading nonprofits to greater social impact and financial sustainability. Social Velocity helps nonprofits grow their programs, bring more money in the door, and use resources more effectively. For more information, check out Social Velocity consulting services and clients.


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14 Comments to Financing Not Fundraising: The Message of Social Impact

[…] This post was mentioned on Twitter by Nell Edgington and Debra Beck, EdD, Doug Kerr. Doug Kerr said: RT @nedgington: New blog post: Nonprofits can raise more money by fundraising around social impact, not organizational needs: http://bit.ly/93A61K […]

Mazarine
November 4, 2010

Would you say “traditional fundraising” is holding organizations back, or, would it be more accurate to say, “nonprofit board mentality” or “sector emergency chicken-with-head-cut-off alarmism”?

I agree that we need to come from a position of strength, what the money will accomplish, 3 kids will eat tonight, or 10 men will find jobs thanks to your donation, not just, “oh, we need it because our nonprofit is running out of money.”

Mazarine
http://wildwomanfundraising.com

Nell Edgington
November 10, 2010

Mazarine,

I’m sorry for my delayed response to your comment, it was sent into the spam folder for some reason.

I think nonprofit board mentality and emergency alarmism are definitely part of the problem, but I do think that the overall approach to fundraising in the sector is holding nonprofits back. That approach is not integrated with the overall mission of the organization, tends to be short-sighted and focuses on revenue-generating efforts that have a low return on investment.

The approach I outline in this blog post is not simply about coming from a position of strength, although that is important, rather it is about elevating the conversation to be one about change to problems, communities, society, not just change to an organization.

Clay Boggess
November 16, 2010

It’s all in how you spin the message. No one wants to think that their money is going towards keeping an organization afloat regardless of how much that organization has proven to benefit a particular community or cause. If on the other hand, the message is communicating to the donor that their money will be going towards achieving ‘x’ results, that is a much better message. As it turns out, some of the donors money is going towards operating expenses but they don’t have to know that.

Nell Edgington
November 16, 2010

Clay, thanks for your comment. I don’t ever advocate being duplicitous with donors. I’m not arguing that we hide operating expenses from donors. Rather I’m arguing that we elevate the conversation from a discussion of the building, or books, or materials that a nonprofit needs to a conversation about the social impact the nonprofit is attempting to achieve with those buildings, books and materials. You still absolutely have to educate donors about the operating expenses required to have social impact. My point is: don’t end the conversation at those expenses, rather talk about how those expenses will result in change in a community.

Devon Kearney
November 16, 2010

A fine point, but I can’t help but think there’s a straw man in here. The idea that you should focus on impact rather than organizational need is in my experience pretty much universally accepted development professionals, and a standard rule in all fundraising communications (not to say that there aren’t exceptions of course).

So it’s good advice, but I don’t see that it cuts a distinction between traditional fundraising and the new model you are advocating. Any of us traditionalists worth their salt has been talking in terms of impact for a long time.

That said, I look forward to reading the other articles, and seeing what else is new.

Nell Edgington
November 16, 2010

Devon,

I love your optimism, but I really haven’t seen the “universal acceptance” of impact fundraising messaging that you have. Indeed, in order to make an impact argument, a nonprofit must have created a theory of change or logic model, and the vast majority of nonprofits don’t have one. If you look across the various nonprofit verticals from public broadcasting, to health and human services, to animal rights and so on, examples abound of fundraising appeals that are focused on organizational goals, be they financial, structural, etc. I think a capital campaign pitch is a perfect example “We need $1 million to build a state of the art building.” As opposed to describing the change the nonprofit is working toward and how a building (and the money to build it) will help to make that change occur.

I’d love it if my vision for impact messaging were already a reality, but I don’t think it is.

[…] will no longer be enough to be a charity for charity sake, but rather nonprofits must analyze and articulate how their services fit into a larger solution to the problems they exist to […]

[…] will no longer be enough to be a charity for charity sake, but rather nonprofits must analyze and articulate how their services fit into a larger solution to the problems they exist to […]

Stephen
January 4, 2011

I have been trying to impart this way of thinking into our organization since I joined. It is a difficult roll to step out of one’s comfort zone and start trying new ideas.

Changing the donor’s mind must be done in a way that achieves what you are writing about…relevant social change.

I have been on the other side of the desk when I was asked for money and donor’s need more than just a warm and fuzzy feeling about giving. Development, Finance and Communications need to work together to survive in the new economy. Working as a stronger partner with the donor is the answer.

Nell Edgington
January 5, 2011

Stephen,

You are right on. The entire organization (Development, Finance and Communications) need to work together and be fully integrated. And at the same time nonprofits must forge a new, stronger, more open and honest relationship with donors.

[…] your donors. Make your ask for money from a place of impact, not need. Talk about your bold, ambitious strategies for change. Describe an opportunity so compelling, so […]

[…] will no longer be enough to be a charity for charity sake, but rather nonprofits must analyze and articulate how their services fit into a larger solution to the problems they exist to […]

[…] Financing Not Fundraising: The Message of Social Impact […]

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