How the general public views your nonprofit can translate into lots of support and dollars, or not. Wise and successful nonprofits spend time creating an image and keeping it polished -- sometimes called branding or marketing.
Here are six steps your nonprofit can take to improve your image with the public -- demonstrating that you deserve increased funding, rather than suspicious scrutiny.
The public has been trained to keep its eye on one ratio: the proportion of funds being recycled into administration and fundraising instead of fueling the core work of your organization. Studies show that the average donor now considers a nonprofit's costs of fundraising and administration in making a decision about whether to send a gift.
A ratio of more than 50% of your funds going to administrative costs is generally considered too high. The Better Business Bureau (BBB)'s Wise Giving Alliance long recommended that no more than 35% of total funds be spent on administration and fundraising -- in other words, that 65% of a nonprofit's budget be spent on program activities. (They have, however, reduced the percentages to 45% and 55% in light of the troubled economy).
The bottom line is that people will be watching your nonprofit's ratios, and it's in your interest to keep administrative costs relatively low -- and to advertise that fact. If yours is a start-up organization with few resources, consider having volunteers perform some administrative functions for a while.
Your organization needs to create its own public identity and image. This might be anything from a streetwise provider of drug counseling to a high-culture early-music association.
To create an image, first decide internally how you want to be portrayed. Then make sure that image gets conveyed in your website, written materials (such as letters to donors, annual reports, and newsletter), and contacts with the media. The use of graphic elements such as a logo, particular colors, and photographs can help create a consistent look -- one that people will recognize in the flesh.
Running a nonprofit means dealing with a mountain of paperwork. At a minimum, you'll be required to submit reports to your grantors, the federal government, and possibly your state and local government throughout the year.
Some of the information in your reports may become public. For example, you're obligated to give a copy of IRS Form 990 to anyone who asks for it, or to post it on the Web. (For more information on reporting requirements, see How to Form a Nonprofit Corporation, by Anthony Mancuso (Nolo).)
Most individual donors won't see these various reports. But that doesn't mean the information won't come to them by other means. For example, investigative reporters have become dogged about checking out Form 990s, always looking for the latest, hottest nonprofit rip-off. And a number of groups now evaluate and compile data on nonprofits, using the Forms 990 and other reports.
Recording high-quality, transparent financial and other information is crucial to your success at attracting not only institutional support, but individual donors as well.
You'll enhance your credibility -- and convey that your organization is committed to good planning, wise spending, and rigorous oversight practices -- by presenting financial information to your potential donors up front. In many instances, this may require your fundraising staff to keep in regular contact with your accounting staff -- always a good idea.
There's no need to overwhelm people with facts and figures. Instead, concentrate on providing the key financial metrics that will allow them to judge whether you're meeting your goals in a cost-efficient way. The data they're most likely to want are the spending ratios described above, as well as your budgets for particular projects. It's also helpful to your donors -- and very effective for fundraising -- to break down expenses on a "per unit" basis, such as "every $4 allows us to feed one hungry person for a day."
Your website is an excellent place to post this sort of information, as is your newsletter. (For more information on using your website to help fundraise, read Nolo's article Using Your Nonprofit's Website to Help Fundraise.) Specific dollar figures catch people's eyes and make them better understand why you need their financial support.
Prospective donors will see every interaction with your organization as a reflection of how well you actually deliver services or fulfill your mission. A donor who gets a thank-you letter from a marine mammal protection organization three months after contributing probably won't think, "Oh, they must have been too busy saving the whales to get to my letter." Instead, the donor will probably wonder, "Hmm, if this place can't get its act together to answer one little letter, how are they going to save a whole whale?"
Of course, thanking supporters promptly is just one of the ways your organization can demonstrate its good management and interest in donors and other members of the public. Other ways include good writing and careful editing of letters, newsletters, and website content; returning phone calls courteously and promptly; handling supporters' checks and credit card pledges responsibly; keeping your database, addresses, and related records up to date; and demonstrating an obvious desire to treat supporters as both friends and, at some level, customers.
If you can focus the public's perception on the great work that you're doing, you'll defuse concern over details like ratios. Who's going to quibble about how much you're spending on services if it's clear that you're getting a giant bang for your buck?
To convey this message, managers and fundraisers need to sit down with program staff and look hard at what you're really achieving. Try to break things down -- look not only at your long-term goals and numbers, but at the step-by-step or indirect successes that you achieve along the way. Sometimes one good story is enough to mold public perception of your organization. Again, your website, newsletters, and other letters are great places to get this information across.
To learn more about fundraising for your charitable organization, get Effective Fundraising for Nonprofits: Real-World Strategies That Work, by Ilona Bray (Nolo).