Data and Donors, Part I – Tips for Organizations

It’s a new year and that means many of us are working on resolutions to start off 2016 on the best foot. For organizations in the social impact space, how many of your 2016 goals involve finding new funding streams?

I’d guess that 100% of you would like to increase funding this year for your organization – and TaroWorks can help make that happen!

Having spent years fundraising for an international organization, I can vouch firsthand that more and more donors are focusing their funds on organizations who can prove impact. In other words, donors are pulling a Jerry McGuire and saying, “Show me the data!”

So how exactly can your organization use data to improve relationships with donors and secure funding? Here are my top three tips for fundraising with data –

• Use metrics to answer a donor’s “So what?” question.

Even if you’re a small non-profit, start-up or social enterprise, start measuring something, anything – now! I’ve worked with small teams who say they don’t have a staff member who has bandwidth or knowledge to track metrics. If that’s the case, figure out a way to incorporate capturing 2-3 data points in your regular operations and daily processes (The Chronicle of Philanthropy has a handy M&E toolkit to help you get started).

It’s easy to measure programmatic outputs (i.e., number of students who attended a literacy workshop, number of wells built), but your ultimate goal is to measure outcomes (i.e., increase in reading fluency, change in sanitation levels). These metrics make it possible for you to answer a donor’s “So what?” question.

Here’s a (rather simplified) example of using metrics in a donor dialogue:

You: Thanks to our funding last year, we built 10 libraries. We’d love for you to consider making a grant to support our 2016 operations.

Donor: Well, it’s great to know how my money could support brick & mortar, but how do I know your organization is actually achieving your stated mission to empower students with education? (This is the “So what?” question)

You: Good question! We also track metrics that show our libraries help increase students’ reading levels by one full grade. Your grant would enable us to reach 250 students. By this time next year, they’ll likely be able to read and comprehend 2x what their peers can – your support means a game-changing difference in building an educational foundation for these students.

Donor: Amazing use of data to convince me! Here’s the signed grant agreement and check.

Tracking metrics is critical because to effectively ask a donor for funding, you need to be able to tell them (1) what you’ve done (showing a proven track record to illustrate why they can trust you with their money) and (2) what you want to do next (making the case for why their funding is critical to your operations).

• Don’t be afraid to show donors the good, the bad, AND the ugly.

When it comes to your M&E results, be transparent with your donors! The issues our organizations are trying to address (gender equality, clean energy, education, etc.) are TRICKY problems to solve. Donors will value transparency, so using all data at your disposal – the good, the bad, AND the ugly – will help you build trust in donor relationships. And don’t worry, you can always tell a story that makes the case for additional support.

For instance, if your impact assessment finds your program isn’t making a significant difference, you can still share those results with your donors – and you should! Just frame your conversation using these Do’s and Don’t’s.

DON’T: Share negative results by saying “Whoops, we failed in doing what we said we would. Thanks for the money. More, please?”

DO: Use those results to have an open conversation and say, “As you know, this is tough and complicated work, so we’re especially grateful for your partnership! We found with our program that X worked, but Y didn’t. Now that we know, we’re pivoting our approach accordingly to incorporate Z. Because we’re committed to constantly improving, this new visibility into our work means we can make our programs even stronger. We’re excited for these next steps and would love your continued support to make that happen.”

You don’t have to necessarily report all metrics on your website, but if your board and/or largest donors ask for more detail, you should have the data available for them. For examples of messaging data transparency to donors, check out One Acre Fund’s biannual open calls or Room to Read’s archive of annual monitoring reports.

Too many organizations come across to donors as flying blind or looking at everything with rose colored glasses, so set yourself apart by committing to data transparency. Donors will feel valued you are sharing it all with them. They will appreciate that you are investing resources into finding out what works and what doesn’t so you can improve – and they will want to invest in that journey with you.

• Prove why your work matters – incorporate your data and operational approach into your “About Us” page.

After two general tips, here is a very specific one for you – use data to move beyond staff bios in your “About Us” page.

After researching hundreds of non-profits and social enterprises, I can’t tell you how many “About Us” pages I’ve read where I come away knowing a great deal about the founder’s education, travel history, and hobbies…but still wasn’t quite clear on the actual work the organization does, let alone its impact. That’s a huge red flag to prospective donors researching you!

Donors won’t waste their time trying to figure out what you do. You need to make it easy for them and make sure you’re focusing on telling the story that matters.

So it seems obvious, but apparently still needs to be stated – when telling your story, put your mission and beneficiaries first. Specifically, share about your operational and data approach (i.e., field staff across X regions running the programs and collecting data for bi-annual KPI monitoring reports), as well as any results you have to date (or results you are beginning to work toward measuring).

You need to make it easy for donors to immediately know (1) what you do, (2) how you do it, (3) your impact to date. Use one or two key data points to address each of those three points on your “About Us” page. Taken together, these three points tell donors the most important point of all – (4) why your work matters. Explaining why your work matters is how donors will decide whether or not to fund your operations – so use data to prove your point!

For more tips on using data to build relationships with donors and secure funding, reach out to Brenda directly at brenda@taroworks.org. Stay tuned for Data and Donors in Development, Part II – Tips for Funders.