Do You Know the True Cost of Success for Your Favorite Nonprofit?

True Cost

What keeps you reading when you open the envelope and find a fundraising letter? Do you scan for the client numbers – people served, sheltered or fed? Do you look for program costs – how much the program costs per client? Or do your eyes catch the story and pictures?

If the nonprofit organization is smart, they put their best story right up front, early in the letter. Stories capture our attention. Stories draw us into the client’s life, sometimes into the organization itself.

Our lives are shaped by the stories we tell and others tell about us. Our unique stories make up the complexity of who we are. Nonprofit organizations use storytelling to touch us at our core – where our own personal and complex stories reside. They intend to convey impact and results, which could only be possible because of the donor’s gift.

Behind the Client Story is Always a Bigger Story

The nonprofit story is complex and layered because it describes the wheels and cogs that turn daily to deliver services. The nonprofit story includes the day to day of delivering services to many individuals. The struggle to raise funds year over year, the challenge to constantly recruit new volunteers, the need to hire and keep qualified staff members dedicated to the mission.  The nonprofit’s story weaves in and out of every client story.  

Often my conversations with donors include the expectation their gift will make a difference. They seek proof of effectiveness and efficiency. However, the donor faces a stark reality – seeking does not mean finding will follow.

So, we scan fundraising letters and newsletters for the statistics that will prove they have earned our donation.

Nonprofits Struggle to Tell the Complete Story

Meanwhile, at the nonprofit, there is a struggle to explain their story enough that donors will understand the full operating costs. Fear stands in the way of the complete education every donor deserves. The donors ask questions, but more often are unsure of how to ask the question for the answer sought.

An important part of any nonprofit’s story is the true cost of operating and delivering services. True costs include the expense of keeping lights turned on and a facility operational, keeping staff and volunteers educated and up to date, fundraising, communicating with the public, supplies bought, and individuals served. Any nonprofit executive director reading this right now can add ten more items to the list. True costs are not as simple as overhead, fundraising, management and general, and delivering services.

The Cost of Effectiveness More than Pennies on the Dollar

True costs include the expensive work of measuring their success in a meaningful way. Mostly, nonprofit organizations themselves underestimate the cost of this part of their work. Almost all fear telling donors what it will cost to prove effectiveness.

We read client stories, never comprehending what it would cost to prove the success they aim to deliver. Even when our heart connects our head may ask reasonable questions. How often do similar stories occur? Does the story represent the kind of success the donor seeks?

For thirty years, nonprofit organizations have heard the siren song that donors seek effectiveness and proof of success beyond an annual feel-good story. Many have wrecked on the sand bars and jagged rocks of reality – the cost of proving success beyond a donor story.

A Short Primer on Success

The heart of success is more than numbers; it’s change of behaviors, attitudes, knowledge and more. Success is complicated and expensive.

Donors must answer the question of what kind of success they seek: short term, the most immediate future, mid-term in the next few months or a year or so, or long-term, permanent change. The cost of measuring success grows with every day, month and year added to the expectation.

Nonprofits share client stories and hope it will suffice as proof of success. Their story will not be complete until it includes true costs of measuring success.  

They require our support, financially and intellectually, as they navigate the dangers of proving success. In the end, they might discover they have been less than successful and must find a way to help us understand they are learning into the work. Learning is vital to any good and valuable work.

Encourage the nonprofits you support to share true costs and the realities of proving their success. That story is long overdue.

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2 Comments

  1. Thank you for educating donors on the validity of the true cost of providing a service. The non-profits I know work to keep those cost as close to the bone as is possible but those expenses are essential and real and must be paid. Good info for all of us.

    Reply
  2. Wow, you hit the proverbial nail on the head…the cost of proving success. Now that is a challenging one. I must admit I am still learning in this area. I am probably no more than an advanced beginner…on good days an intermediate…never an expert. Thank you for this thought provoking article.

    Reply

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