Conveying The “ROI” To Foundations

by Esther Wiesner

Approximately 14% all of giving comes from foundations and the marketplace is increasingly competitive. As you consider going in that direction, here are a few critical points to consider approaching foundations.

Over the past several years, foundations have begun to refer to a traditionally financial term – ROI – or Return on Investment. The adoption of this banking term signals two important shifts: the grant application process has become more competitive, and grant applicants need to be able to quantify their activities – and results – in increasingly clear and compelling ways.

While initially an organization might adopt record keeping systems simply to satisfy a funder or foundation prospect, the results will reflect a rigorous tool for tracking progress over time, setting goals, communicating with board members and individual donors, and help to methodically examine the variables that contribute to success or failure.

There are many trademarked methods for measuring success on top of which each foundation has a unique way of wording the questions they want answered. However, there are some basic questions each grant-seeking nonprofit organization should be asking so that key stakeholders and prospective donors receive a clear and straightforward message about why their philanthropic dollars are best spent supporting the activities of your organization. The following questions are posed to direct-service agencies but can be extrapolated for all nonprofits as well:

1. Profile Your Beneficiaries: Who do you serve … really? Where do they live? What are the demographic differences and shifts? How are lives tangibly improved and what specific activities are your clientele able to perform as a result of your organization’s services?
2. Staff and Volunteer Make-up: Foundation representatives like to “kick the tires” so detailing the roles and responsibilities of the people who make your organization run is valuable information. Being able to demonstrate and quantify volunteer leadership shows that you are invested in the community you are serving. Further, most foundations today no longer accept unsolicited proposals. Therefore, you must develop a cadre of leaders and donors who can make direct connections through peer relationships with foundation Directors and Trustees so that your proposal will be accepted and considered for funding.
3. What Happens to Beneficiaries After Services are Completed? For truly transformative impact, your organization should show a concern for and ability to remain connected with the individuals or community you serve. Once your formal involvement with a service constituent has ended, does he/she come back and volunteer with your organization? Does this beneficiary incorporate your organization and the value that it brought into the story of his/her life?
4. A Typical Day in the Life of Your Organization: In a field where we are always looking to show the big picture, we must not forget to explain how it is that we do what we do. Keeping in mind that funders read hundreds of proposals and get approached by many organizations, the more you provide personal insights for funders about the inner workings of your organization, the more the funder prospect will identify with and be able to envision your organization as a dynamic, real place.
5. The Layman’s Test: A seemingly basic suggestion: ask a friend who works in another discipline to read one of your draft grant proposals. Can he/she understand what you’re all about? What questions does he/she raise as a result of reading the draft? What stands out to him/her as compelling aspects of your narrative?
6. Your Constituents Are the Best Observers: Keep in mind that while not everything can be translated to dollars or numbers you can collect and code significant information from anecdotal data. Periodically – and strategically – interview your recipients of service and see where their experiences lead to common observations or even provide language for and methods of evaluation. Their testimonials can also become key to marketing your agency.

Understandably, getting all of this information documented – and keeping it up-to-date – may require extensive time and the collaboration of numerous people on your team. However, becoming well-versed in foundation speak, “outcomes,” “outputs,” and now “ROI,” will ultimately position your organization – and your beneficiaries – at a more strategic and successful place.

Esther Wiesner is a consultant with The EHL Consulting Group of suburban Philadelphia. She has spent a decade in community economic development and has guided numerous social service clients and faith-based organizations in developing compelling cases for support and helping them to gain access to major philanthropic groups and individuals.