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Secure more nonprofit funding: 3 factors influencing funders

August 23, 2022
Several nonprofit professionals sit around a table and applaud as one of them shakes hands with a funder after securing nonprofit funding.

Many nonprofit organizations receive a notable amount of funding from foundations, charitable trusts, and corporate giving programs. While individual giving remains crucial to your nonprofit’s success, it’s important to note that foundation giving is on the rise, making up nearly 19% of all giving today.

To maximize the funds your organization receives to further its purpose, it’s necessary to understand the key motivations and factors behind funding decisions. Bonterra Program Management (formerly Social Solutions) has recently explored this topic in-depth and compiled the most significant considerations for funders today.

1. Nonprofit impact

Over 97% of funders indicate that an organization’s impact is the most important factor for funding decisions. After all, funders and nonprofits essentially have the same goal—generate as much positive, lasting change as possible.

Therefore, it’s critical to have detailed measures in place for collecting and reporting data. This ensures that funders understand how successfully your organization is carrying out its objectives, which can help you secure more funding moving forward.

Tips for reporting impact

Chances are, your nonprofit already gathers plenty of useful information about your donors, volunteers, and programs. The key to effectively appealing to funders lies in combining the right data points with the right storytelling techniques. Use the following tips to enhance your organization’s reporting efforts:

  • Focus on specific program outcomes. Depending on your nonprofit, you may track and report data on the number of people you serve, relevant demographic details, and the services you’ve delivered.
  • Incorporate impact stories. Storytelling is a powerful way to help funders visualize the change your nonprofit is effecting in the community, leaving a deeper impression in their minds.
  • Leverage software to collect and analyze data. With the right technology, you’ll be able to easily collect and track down specific data for sharing relevant impact stories with funders.

Furthermore, you can make your reports more engaging by depicting your impact data using visual elements, such as charts and graphs. This makes it easier for funders to evaluate the extent of your impact at a glance.

2. Nonprofit purpose

A clear and compelling statement of purpose motivates your staff and volunteers, guides your strategic planning, and informs your supporters on the best ways they can contribute. Remember that funders have their own purposes and values, so they’ll be looking to see how closely yours align with theirs.

Your nonprofit’s purpose should encapsulate the overarching cause you’re working toward, those who will benefit from your work, and the services you’ll provide to support those individuals.

Tips for communicating purpose

Do you prioritize incorporating your purpose into the everyday work and strategies of your nonprofit? The more consistent your decisions and activities are with your purpose, the clearer your overall impact will be to funders. In addition to your funding applications, be sure to emphasize your nonprofit’s purpose in your:

  • Social media posts.
  • Website’s About and Home pages.
  • Annual report.
  • Email newsletter.

Take the time to review your nonprofit’s statement of purpose periodically to ensure that it’s accurately capturing all that you do and aim to do. Whether you’re communicating with funders, staff members, donors, or volunteers, your nonprofit’s purpose keeps everyone aligned on the important work that you do.

3. Legal nonprofit status

When nonprofits apply for funding, they must often provide documents that prove they meet predetermined criteria, including key staff information, financial statements, and legal documents showing your nonprofit’s 501(c)(3) status.

Tips for ensuring compliance

Effective data management ensures that your organization remains as transparent and trustworthy as possible in the eyes of funders and the public, so aim to stay on top of paperwork such as your Form 990 and remain in good standing with charity watchdogs such as Guidestar.

The easier you make it for funders to verify your details and understand the value of the work you do, the more successful you’ll be in securing funding to power your goals.

Paving the way for more funding

At the end of the day, mutual trust and purpose alignment between a nonprofit and a funder is essential for the long-term sustainability of their relationship. To make the most of your fundraising efforts, seek out funders that are already closely aligned with your organization’s core purpose. 

Building your nonprofit’s impact takes time, but a shared understanding and focus on your purpose will go a long way toward securing the funding needed to create lasting change in your community.

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