By Peter Lannoo • March 2, 2021

    How Fundraisers Can Show Value Without Showing Profits

    Despite working front and center in communities, nonprofits still deal with many misconceptions about their operations. A recent article in Forbes highlighted a dozen that have long plagued the industry. While dispelling inaccurate assumptions is necessary, the origins of these myths must be examined closer to paint a fuller picture of the consequences they have for mission-based organizations.

    value without profits

    Misconceptions are easy to harbor from the outside looking in. Nonprofits account for approximately ten percent of employment nationally - meaning for every ten workers, nine may not have a full understanding of how nonprofits operate. Even the most optimistic among us would agree getting 90 percent of people to agree on anything is rare, so it’s not enough to simply correct and move on. Instead, nonprofits must change their messaging to show potential donors the value of the organization, both inside and out.

    Some of the myths are snowballed misunderstandings. As Stephen Keppel mentions, nonprofits measure success based on impact in the community, not revenue. That impact is not shown when organizations report its bottom line. Instead, balance sheets are scrutinized to the bones. Facing pressure to trim the fat, this unrealistic expectation often leaves investments in tech, security, and operations by the wayside, as Courtney Nicolato points out. If we zoom out, this domino effect paints a picture of a sector that is lagging behind in innovation by choice. However, this could not be further from the truth.

    Other myths are age-old biases, such as the expectation of lower-quality leadership. Aaron Alejandro argues, however, that nonprofit leaders are still held accountable for creating value for stakeholders - much like their for-profit peers. However unlike the for-profit sector, stakeholders for nonprofits are donors and the communities served rather than shareholders. Navigating this accountability through the previously stated challenges takes tremendous leadership which often goes unappreciated.

    Nonprofits measure success based on impact in the community, not revenue. That impact is not shown when organizations report their bottom line.

    The persistence of these misconceptions stems from a discord between nonprofits and the general public. Advocating articles may change a few hearts, but without breaking down barriers between the organization and its stakeholders, the expectations and goals of the organization will always be a stage removed and myths will persist. So how can nonprofits, and more importantly fundraisers, change this? The answer is communication.

    By opening yourself and the organization up to connect, donors are able to see the whole pie rather than just a single slice. And by knowing the types of outside factors leadership is working with, including but not limited to expectations for razor-thin budgets and embracing an impact-based balance sheet, perhaps some of these myths will fall by the wayside for donors. Indeed, there’s no better time than now, when nonprofits are a consistent presence in the headlines, to convey this value inside and out. Perhaps a change is coming, but communication lies at its nexus.

    Honest communication with donors can be easier said than done. For schools like Towson University, leadership identified that a large portion of alumni are younger and unable to give. But as any nonprofit leader knows, that's no reason not to connect with a possible supporter. By using Gravyty's AI-powered fundraiser enablement tools, Towson fundraisers aren't just connecting with donors to ask for money - they are building relationships to lay the foundation for a sustainable giving pipeline. Read Towson's story, and learn how artificial intelligence can empower your fundraisers to show your organization's true value to your supporters.

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