- Demonstrate proper allocation of program funds: Today constituents want to know that the money they donated to a specific program actually went to that program. The only way to demonstrate to donors that their money was used as specified—and ultimately increase those donors' trust—is to report back on the money raised per program and the money used per program. Every organization should utilize financial data in order to do this, and it should be included as part of every organization's donor stewardship program. At a minimum, this should be done on an organizational level, but more and more nonprofits are beginning to personalize this message and report to individual donors on the allocation of his or her gift.
- Set goals: Similar to budgeting, financial information can help fundraisers and the organizations they work for set attainable goals. The concrete nature of financial information makes it the perfect benchmarking tool. Organizations can set goals higher than the previous year's campaign and continually encourage supporters to donate more. Additionally, organizations can use financial information to justify a campaign. For example, if a nonprofit needs to build an additional facility, it can use financial information to prove to its constituents that the new facility is based on a need and not a want. Donors are more likely to give when they feel the solicitation is justified, and financial information is one of the best ways to accomplish this goal.
- Demonstrate accountability: In addition to program allocation, financial data is vital for demonstrating accountability. Accountability is more than a concept. It is a means by which organizations can build donor trust and keep donors coming back campaign after campaign. Think about it. If a donor knows that 90 percent of his or her donation actually went to the organization's mission and not administrative costs, for example, he or she may be more likely to donate to the organization in the future. This is incredibly helpful for organizations that conduct annual campaigns. Organizations can increase donor retention simply by demonstrating their accountability.
- Communicate: Organizations are constantly looking for new information to share with their constituents. Why not add financial information to the list of things to tell donors and supporters? Because financial information is so rarely communicated to constituents, the simple act of sharing this data can help an organization differentiate itself from others. Additionally, making the organization's audited financial annual report available on-line offers additional credibility.
Howard Horowitz, January 2008
© 2008, Kintera®, Inc.
Howard Horowitz is vice president of professional services for Kintera®, Inc. Kintera provides software as a service to help organizations quickly and easily reach more people, raise more money, and run more efficiently. The technology platform features a social constituent relationship management (CRM) system, enabling donor management, e-mail and communications, Web sites, events, advocacy programs, wealth screening, and accounting. In addition, the company also has an open applications integration platform that enables clients and partners to integrate with the Kintera technology platform.