Gone are the days when a thank you letter or annual report would suffice for communicating with your supporters. Today’s donors want to know exactly whose lives they are impacting, and they want transparency of how their dollars are being used. Whether you are seeking impact investors or philanthropic donations, the key is to demonstrate the ROI your organization provides to the investor as a combination of financial and social returns. See Part 1 of this series to understand how potential investors and donors are evaluating your company against other charitable investments.

This post provides four steps and examples for attracting support through better reporting of donor-funded impact:

  1. Measure impact in terms that your audience cares about. The simplest approach leverages the Impact Reporting and Investment Standards (IRIS) described in Part 1, Quantifying Social ROI.
    Proof of impact

    Jolkona provides 1:1 proof of impact for each donation it receives.

    However, your cause can lend itself to creative ways to measure impact beyond cold statistics. This can also help you name specific amounts that a donor or investor can provide, matched with a known impact that you can measure. For example, rather than simply asking for $25, $50, and $100-tier donations, frame your fundraising in terms of $30 to provide a fuel-efficient stove to a family or $260 to build and install a sanitary toilet in a family’s home. Jolkona Foundation works with NGOs to design feedback loops that provide proof of impact to donors. For example, a donor sponsoring a child’s education might receive a photo of the child and a copy of the report card at the end of the term that received funding. The key challenge is to identify the metric of impact you want to measure and ensure that those you are helping can provide that form of evidence without having to take great pains to provide it.
  2. Report aggregate impact in external communications such as your website, PR materials, and spokesperson messaging.

    Sidebar on Kickstart.org

    Throughout every page of the KickStart International website, this sidebar is posted clearly stating how $1 of charitable investment from you translates to $15 of social ROI for those that KickStart helps. The front page touts front and center how much aggregate impact Kickstart has had since its founding, with a recently updated date so you know the data is fresh.

    Now, donors can make an informed investment decision and can donate with confidence about the impact they will have. Their investments may have -100% ROI if they look at value of only their own account. But if they consider the combined value of their account + the value of the recipient’s account, they see a 1500% return on their investment, which is fantastic fund performance.

  3. Personalize impact reporting to individual donors. The more specific you can be about the impact that an individual’s donation has had, the more likely they will be to donate again.
    Sample donor follow-up letter from Smile Train

    Sample donor follow-up letter from Smile Train shows before and after photos from the surgery you funded

    Smile Train, an organization that funds cleft palate repair surgeries in developing countries, has also recently stepped up its display of ROI evidence on its fundraising website, but where it really excels is in follow up with donors. Smile Train makes the donor’s impact clear by sending the before-and-after photos from a recent surgery that was made possible with the donor’s funds. Now the donor can recognize that his $250 donation has directly changed this child’s life forever.

  4. Enable donors to share their success. Social media can amplify your message, but most NGOs miss this opportunity to exponentially grow awareness simply through their donors’ social networks. Some enable social sharing of a project that is raising funds, such as Kiva’s setting to allow publishing to your Facebook wall when you fund a new loan.

    Kiva's Facebook permission setting automates social sharing to encourage friends to support the same loan. Wouldn't it be better to also report and post when the loan has yielded success for the recipient?

    However, I have yet to find an organization that sends a personalized follow-up impact report to each donor with simple social sharing buttons that allow the donor to share his individual impact with his social network and encourage friends to donate similarly. Please comment below if you know of one!

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