Why Nonprofits Struggle to Show Fundraising Outcomes
Nonprofit executives say improving their tracking of fundraising impact is a top priority, according to recent research from Oracle NetSuite. But outcomes are harder to show than dollars raised.
Donations are an obvious way to measure interest in an organization’s mission. But showing the impact of all that fundraising is much harder for many nonprofits, according to a new white paper from an Oracle subsidiary.
“Connecting Dollars to Outcomes” [registration], a report from NetSuite, finds that many organizations must tie together the work of different departments, such as fundraising and operations, as a part of their grant process, but they continually run into challenges doing so.
More than three-quarters of the nonprofit executives who responded in the study (76 percent) said it was a major goal to improve how they measure outcomes from fundraising, but just 29 percent felt they could do so effectively based on money invested—and only 18 percent could offer donors access to real-time fundraising reports.
One problem is a lack of clarity on how outcomes should be defined; another is the challenge of correctly tracking resource expenditures. The report notes that technology tools and sector collaboration can help with both issues.
“For mission delivery metrics, technology must be able to connect the dots between fundraising, finance, and program metrics, which means integration points between the data,” the report states. “Technology companies are responding by collaborating with nonprofits and grant makers to build unified data sets and data models to trace dollars to program results.”
Among survey participants, there was a wide belief that properly tracked outcomes could drive results—85 percent of nonprofit executives said it could help increase fundraising success, while nearly half (49 percent) said it would increase recurring donations. Others saw potential to bring in larger gifts and reach new demographic groups.
In a news release, Oracle NetSuite’s nonprofit industry principal, Cheryl Gipson, noted that stronger outcome-measurement capabilities could help to restore trust in the nonprofit sector after a series of controversies over how some organizations used donations.
“At a time when consumer trust in institutions of all types is dwindling, being able to effectively measure the outcome of all investments in real time is increasingly important for the nonprofit industry,” she said. “We are committed to helping create a more impactful nonprofit industry and will continue our work with nonprofits to provide technology that allows them to trace dollars from donation to results.”
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