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Report on Foundations' Considerations for Nonprofit Funding
The focus on impact among foundations looking to donate to nonprofits is staggering: fully 98% of respondents included this as one of their top three priorities in assessing what organizations to fund. The second most commonly cited item, an organization’s mission, was a top-three consideration for 49% of respondents. This indicates that while the particular field that nonprofits intend to impact is important, foundations are looking to get the biggest bang for their charitable buck.
“The results of our survey provide invaluable insight for nonprofit organizations into foundations’ decision-making process,” said Kristin Nimsger, CEO of Social Solutions Global. “It’s clear that the most effective way that organizations can make a better case for funding is by improving their methods for demonstrating their impact. Their future growth will depend on taking these results to heart, and showing that they not only put foundations’ money towards worthy causes, but they do so efficiently and effectively.”
When evaluating the impact of nonprofit organizations, the survey finds that foundations and charitable trusts use outcomes to compare and contrast between candidates for funding. 67% of funders say that outcomes are the best indicator of impact, far more than the second most frequent response, consistency to mission, at 16%.
Program outcomes are also a vital component in organizations’ reporting to funders, with 88% of respondents saying that this was among the top three things they look for in reporting. Impact stories also carry weight, with 41% of respondents saying that they look for anecdotes in reporting. This shows that even in an increasingly quantitative world of nonprofit funding, qualitative arguments still have a noted impact on funding decisions.
You can access the full study here.
Bob Scott has been informing and entertaining the mid-market financial software community with his email newsletters for 10 years. And he has been covering this market through print publications for 18 years, first as technology editor of Accounting Today and then as the Editor of Accounting Technology from 1997 through 2009. He has covered the traditional tax and accounting profession during the same time and continues to address that as executive editor of the Progressive Accountant.