Demonstrating A Return on Investment

Everyone wants to know about return on investment and many nonprofits and ministries struggle to communicate the return on investment that they provide to their stakeholders. Some may even say that return on investment (ROI) is not necessary since they are a nonprofit organization. While ROI may be measured and communicated differently for nonprofits and ministries, it does exist and is important to all organizational stakeholders. ROI can be communicated through evaluation.

Many nonprofits and ministries struggle with evaluation. Some will even tell me that they don’t need to measure “things” because their donors and stakeholders know that they are doing good work. Wrong! It is important to measure ROI to attract new stakeholders and to demonstrate value to those that are currently supporting your work.  Everyone wants to be part of an organization that is making a difference in the lives of those being served.

Demonstrating A Return on Investment

Let’s begin with the premise that “we measure what matters to us.” An everyday example of this concept is when we mark the growth of our children against a door frame so that we can compare how much they have grown over the past year. Use this old adage to begin to develop the evaluation strategies your organization will use—what is truly important about the work that you are doing? Remember, since mission is the most important asset of any organization, the answer to this question should relate back to the organizational mission.

[bctt tweet=”Mission is the most important asset of any organization. #nonprofit #ministry” username=”Grantconsultant”]

Anecdotal success is not enough! To truly talk about how your programs and services are making a difference in the lives of those you serve, you need to use both stories and data. Data will help you to demonstrate ROI. In other words, you are seeking to make a connection with the heart (stories, emotions) and the head (numbers, logic). To do this effectively, you can develop an evaluation plan in the following ways:

  • Capture client success stories throughout the year. Have a process for staff to submit stories to one person who is the “keeper of the stories.” Then, use these stories when communicating with donors and when writing grant proposals. The stories can also be very useful in reminding staff why they do the difficult work they do each and every day. Finally, the stories can be shared with the board of directors to help them connect with the mission of the organization.
  • Ask questions to help you understand if your program works. Then, ask how do you know it works?  These questions naturally lead to numbers and data collection.
  • Track data about those you reach and how their lives are changed as a result of the services you provide.

Prove your anecdotes with statistics!

As you are planning your programs and services, think about how you will measure their effectiveness. It is easiest to do this when you are beginning a new program, but can be done at any point in the program. Then, use the data you collect to tell a story about the work of your organization and how it is changing the lives of those it serves.

We sometimes think that we can only measure programs and services that are more social service or humanitarian in nature; however, if your organization is focused on sharing the Gospel, more “Kingdom-type work,” outcomes are just as important. Think about what you are trying to accomplish—is it an increase in the number of people who have access to a Bible, the number of people who make a profession of faith? With careful thinking, you can develop kingdom outcomes that will be meaningful to your stakeholders.

Does your organization need some help in evaluating its programs and services? We can help you think through the questions that you want to answer and develop a strategy to capture the data you need to prove your effectiveness.

Please note that The Faith Based Nonprofit Resource Center reserves the right to delete comments that are offensive or off-topic.

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