What is the best way to communicate the return-on-investment (ROI) to donors?
People want to know that an investment into you and your organization is going to produce a worthwhile return. The motivations vary from person to person, but every donor wants an ROI. The "pledge card" might be better titled, "Investment Proposal," where the generosity of the gift is framed within the context of the tangible impact it will make.
There are a number of ways to communicate the ROI to school donors, especially in theage of social media. The best still is a hand-written note from the students that benefit from the donor's contribution. Schools can, and should if applicable, invite donors to tour the school and see first hand what happens with the funds. Using social media, the school can post pictures to Facebook, Twitter, Instagram, etc. or videos to YouTube or Vimeo. The later approach may depend on your donor, however, I believe it should be included in your marketing and public relations plan, as it may challenge another person to donate funds.
If you're buying hard assets that have multi-year uses, it's fairly simple if they are revenue generating. Putting in a new phone system to be used to generate donations is an example. In general going to a retreat is not an investment, it's an expense. In this case, it's better to do a cost/benefit analysis.
(Thank you Jodi and Steve for your thoughtful responses to this Thursday Question)
Accurate & Tangible Return
The ROI you present must be accurately measured and substantiated with reliable data. Fudging the numbers or making them up as an estimate makes for a fragile relationship with donors. Advanced planning will help you determine how to quantify the short- and long-term value you create, making the ROI tangible and relevant. The unit of measure could include the actual monetary impact. Tom Ralser's book, ROI for Non-Profits, is useful for this exercise. Donors want to have confidence they are supporting a high-performing organization of which they can be proud!
Every potential and current donor wants to know their investment is Making a Difference. You want them to be able to enthusiastically answer the question, "So What?" How did this investment improve the world, the country, the region, the campus, the people, the person? What if this investment wasn't made? So what if this investment wasn't made? Would anyone really care? The more articulately your donor can answer this question, the more likely they will give again and influence others to do the same.
Donors want to extend their network of influence. Some want their gift to be publicly known, while others desire to be anonymous. Either way, they want to be part of a bigger whole--not a bigger hole--where others have come together in pursuit of a Shared Vision. Donor Fatigue is less of an issue than Donor Isolation. If a donor feels like a one-man show that is propping up a weak plan, he/she will lose energy. Intentionally foster relationships between your donors and others in your organization so that you have at least three deep relationships that ensure a lasting connection.
Deeper relationships are built more through emotion than data. Help your donors look into the eyes of a faculty member, a student, and/or another you impact. Through pictures, stories, and testimonies, let them feel the return-on-investment. Express gratitude through handwritten cards or personal videos. When they feel the impact of their investment, they will stand with you in the campaign.