The Do’s and Don’ts of Comparing Dollars to Impact

Impact-per-dollar helps donors understand what they’re really giving, but are nonprofits doing it right?

January 30, 2020
by Mike Montalto

One of the biggest challenges we face as fundraisers and nonprofit professionals is breaking down the complex nature of our work in a way that is simple and digestible for donors. That’s why many organizations compare a donor’s dollars to the impact their gift has on their work.

Telling a donor their gift of $20 provides 10 lunches for hungry children makes sense on the surface. It shows the donor their contribution has an immediate effect in making a difference.

But, as you know, there’s no one-size fits all approach when it comes to fundraising. And while comparing dollars to impact is a powerful tool, it may not be appropriate in every situation or for every organization!

The efficacy of this approach has been debated by nonprofit professionals time and time again. As we mentioned, it’s a great way to make supporters feel like they’ve made a difference. On the other hand, there’s questions if it is an accurate representation of a nonprofit’s work and operations.

It’s a fine line to walk. But when used effectively, comparing dollars to impact can be a huge benefit to your fundraising efforts.

Here are some of the do’s and don’ts of comparing dollars to impact:

Do tie dollars to the impact of your story

You know you need to tell a powerful story to fundraise effectively. While dollars to impact makes a donation more concrete, it can’t drive an emotional response on its own.

So, this approach is most effective when it ties directly into how a donor can make a difference in your nonprofit’s story.

For example, let’s say you work at a women’s shelter in your city. Your appeal tells the story of Jane, a single mother who relied on the shelter’s services while escaping an abusive situation.

When it comes time to make the ask, compare a donor’s dollars to the impact they have on the story.

A donation of $50 provides a night of shelter and counseling to help a woman escaping a dangerous situation, like Jane.

This shows the donor that while their $50 may be enough money to cover a night’s stay and some services, what they’re really funding is the opportunity to improve the life of a real person in need.

Don’t go for low-hanging fruit

Too many nonprofits think comparing dollars to impact is a simple exercise. But you can do more harm than good if you don’t put enough thought into how a donor will perceive the impact of their gift.

Remember, your nonprofit is just the vehicle a donor uses to support a cause they care about. So, it’s important to make sure the impact of a donor’s gift ties into your shared goals.

This time, we’ll use an animal rescue as an example. A poor example of dollars to impact could be:

Your donation of $20 will be used to buy a 10-pound bag of dog food.

Sure, if you’re running an animal rescue, you’re going to need a lot of dog food! But that’s not necessarily going to get donors excited to give.

Instead, consider something like:

Your donation of $20 will help us extend our adoption events by an hour, so our animals have a better chance of finding a home.

Yes, the first example is more tangible than the first. And it seems like an obvious go-to based on your needs. But the second speaks to your mission directly.

Think in the donor’s shoes. What’s more exciting?

A bag of dog food? Or a dog going home with a family that day because the shelter can now hold longer adoption events?

Do connect dollars to impact with giving levels

This is a great approach, especially if you are running a monthly giving program.

First, you will need to analyze past-gift data to determine what appropriate giving levels for your organization. Then, you need to tell donors what can be accomplished with donations at those levels and come up with a creative name for each tier to tie everything together.

For example, donors who give between $5 and $25 a month to an animal rescue can be called “care-takers”. Their donations fund basic care essentials, like kitty litter, flea baths, and doggy beds.

Donors at a higher level that give between $50 and $100 per month can be known as “life-savers”. Their donations help pay for life saving medical treatments, vaccinations, and rescue operations.

And of course, you would come up with another tier in the middle, with its own name and services covered by the donation.

The key here again, is to keep things focused on your mission. So, don’t choose generic names like “supporter” or “sustainer” for your giving tiers. The names, and outcomes of gifts at every level should tie together with the impact of your mission.

Don’t worry about other organizations

Here’s a scenario:

Your organization operates a food pantry that provides meals to struggling families during the holidays. In a recent appeal, you asked donors to give $50 dollars to provide a Thanksgiving meal to a family in need.

When you get home, you open an appeal from an organization with similar goals from the town you grew up in, hundreds of miles away. You’ve been supporting them for a while and you’re glad they’ve maintained contact.

But there’s a problem.

You read through the appeal, and come to the ask, which reads:

Please consider a donation of $20, which provides a Thanksgiving turkey to a family in need.

You ask yourself, “How can this organization be doing the same thing, at such a lower cost?”

You felt really good about your appeal. But now, you’re compelled to call your printer and stop the presses!

Relax. Since when is helping people a competition? Besides, there are likely many factors you didn’t consider.

For example, geography can play a role. The cost of living where you grew up may be much less than the city you live in now. The organization in your hometown pays their employees less and has lower operating costs. They also have less people to service. All these factors make it cheaper to provide a Thanksgiving meal.

And remember, cheaper doesn’t always mean better. You read the appeal again and realize that this organization essentially hands out frozen turkeys. However, your organization not only cooks the turkey, but delivers it hot, with sides, and even a pie for dessert!

There are endless factors that can play into what a donor’s dollar does for an organization. So, when comparing dollars to impact, don’t worry about what other organizations are saying.

Like what you see? Stay in touch!

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