Blog

Creating a new generation of data to solve social problems.

It’s an open secret that no matter how strategic the nonprofit sector becomes, we often find our fundraising efforts relying on hope. We hope that that big donor hasn’t changed their giving focus. We hope that the financial crisis hasn’t squeezed wallets too much. We hope that asking for a gift is enough.

No disrespect to President Obama, but for nonprofit fundraising, hope is not a successful strategy. We need to shift toward a new mindset: The audacity of value.

Value isn’t a concept we often talk about in the nonprofit sector. We can speak eloquently about our programs, our beneficiaries and sometimes even our outcomes. But when it comes to boasting about our value—to society, our donors or other stakeholders—we suddenly become sheepish.

We know our work is valuable and improves the lives of the people and communities that we serve. What we don’t often remember or realize is that our work—the outcomes we produce, the unique approach and organizational assets and capabilities that we possess—produces value for others.

And by understanding that value, we can unlock entirely new, sustainable sources of revenue. But it requires us to be truly audacious.

You see, those “others” we produce value for don’t need to be free-riders: We can make them pay. We can turn them into “Impact Buyers.” You may already know some of these buyers: The neighborhood improvement district that sees property values rise as local schools improve; the supermarkets who see profits rise as you enroll more poor families in Food Stamps; the hospital that sees drops in costly uninsured Emergency Room visits as you promote preventative health practices in the community.

Because they derive value or benefit from our work in a direct way, these Impact Buyers view an investment in our work not as charity or philanthropy but as a means to advance their goals and support ours as well.

The benefits of this value-oriented approach can be game-changing. One nonprofit I recently worked with had an overseas volunteer program, but couldn’t escape from viewing it as “stealing” the volunteers’ time from their employers. Once we started to talk about the value of volunteering—for the individuals involved and their companies—we quickly realized that not only was this time not being “stolen”, it was actually an experience that both employee and company valued deeply.

The employees were getting hands on training and project-based learning that accelerated their ability to deliver on their job and advance in the company.  The employers were getting an opportunity to diversify the skillset of their employees in more cost-effective ways than traditional training.

That nonprofit is now switching from cost-plus pricing (covering costs, plus a small profit) to value-based pricing (charging based on the value to the company). Needless to say, the value-based pricing is yielding significantly more revenue.

Hope is no longer a tenable strategy for nonprofit fundraisers. It’s time for us to boldly embrace the value we’re creating and use it to fund the vital work we do.