Friday, October 05, 2007


How do you achieve your mission without infrastructure? What is your mission? Help underserved youth get jobs? To get to that mission you'll need to:
  • Tell others about your story? Marketing
  • Ask for help (especially money)? Fundraising
  • Keep your government funding? Accounting
  • Answer an email? IT
Congratulations, now you need $100,000 to carry out your mission (not counting your salary of course).

Will the purpose, the appeal, the grant request and the communication advance your mission? Sure, but it has to make more than $100,000.
Enter the business measurement: Return on Investment or ROI. This is a measure that profit making companies use to determine how much money they make from how much money they used. In other words, if you invest $100,000 and make $500,000, that would be a pretty good return on your investment.

Now, what place does ROI have in the nonprofit sector?
DeShele Dorsey, Senior Director/Philanthropy Division, Changing Our World, in her article "Measuring Return on Investment: The Value of Nonprofit Partners", offers the following:

Measuring the value and benefits of good corporate citizenship is nothing like demonstrating the return on investment (ROI) of a media spot during the National Football League's playoff games

But it's easy to say what it can't do. My point tonight is that if we don't know what return we get on our investment, how are we going to tell our donors that? I see it all the time "Your $1500 helps: feed a child for a year or care for a tree or get a kid to college or buys meals for a senior..." Somewhere along the line we need to be analyzing the numbers, but to do that we have to know what to ask. If you raise $100,000 to put $100,000 into marketing and fundraising in order to raise another $100,000 to give to the kids and then take 15% off the top to manage the money and run the place...what exactly is happening?

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1 comment:

abenamer said...

Can I point out that IT is actually responsible for all the other departments you mentioned (accounting, marketing, etc.) in the best nonprofits?

You really can't do accounting, marketing or fundraising without IT. I mean you could try but you'd have a heck of a hard time scaling. Think of IT as an umbrella that keeps all the other departments from getting wet. In the best nonprofits, it should be integrated into every department and not be a standalone.