Five Reasons to Tell Your Nonprofit Story Using Financial Data
Stories about our clients and our impact are at the heart of the nonprofit sector. Development and marketing departments tell those stories to evoke emotional reactions through bold statements, compelling images and a myriad other tools and strategies.
When was the last time you were emotionally inspired by how effectively a nonprofit stewarded your donation? Or how financially stable or cost effective the organization is?
I think nonprofits have the opportunity to inspire confidence, trust and competence from their constituents simply by starting to include financial data in their communications, and even more specifically in their infographics.
And it’s not just me. This topic was inspired by a recent presentation I gave at the Minnesota Nonprofit Finance and Sustainability Conference (you can see the presentation here) and the lively discussion among nonprofit professionals that followed.
Here are five reasons to include financial information in your communications:
- Sharing financial data builds trust
- Financial data gives a story credibility
- Tell your financial story instead of reporting financials
- Tie your financial goals to your program and mission goals
- Financial data creates a call to action
Let’s dig into each of these a little further.
Sharing financial data builds trust
Transparency is a common theme in data conversations for a good reason--your supporters want to know how the money they give you is used to meet your mission. I have seen countless infographics describe the need for money in a very clear and compelling way. They may even include a financial ask at the end which describes how much it will cost to fix the issue in an actionable way. But these always seemed to stop short of telling you how the money would be spent to fix it.
For example, during my session, we looked at an infographic explaining the need for clean water in areas affected by extreme poverty. While it was well-designed and moved many of us, there wasn’t a single mention of what the organization does to address the issue or what it costs.
So what? Nonprofits don’t want their infographics to come across as focused on money or begging for donations, but if they don’t share how they intend to invest to make a change then how can they build trust?
Financial data gives a story credibility
Have you ever seen a story or an infographic from a nonprofit and wondered if it was legitimate, namely whether the organization even had the expertise and resources to make a difference? Sharing data on your financial stability, revenue mix, breadth of support and other key metrics will help establish your ability to act on your mission.
For example, I looked at a few areas where there are numerous organizations serving essentially the same mission in similar ways. So what sets them apart? Providing information about the resources an organization has to solve the issue you are describing in your infographic will go a long way in showing you are the right org to support on this issue.
So what? Think of small ways to demonstrate the sustainability of your organization and flex your muscles a bit to show you have the resources to make an impact.
Tell your financial story instead of reporting financials
Most financial data is presented in a very traditional reporting format with a couple pie charts, bar graphs and a quick commentary in an auditor’s tone. But do we take a minute to provide any context to the data?
We looked at a financial statement where the organization had a large jump in net assets due to the sale of a couple of properties. The organization explained that it hoped to use the money to establish an endowment and improve other buildings, but made not a single mention of how the endowment and property improvements would help them meet their mission. Nor did it include any sort of explanation for why the properties were sold. All of the financial gurus in the room quickly formed opinions since they had a number of unanswered questions.
So what? When creating your financial report be sure to understand what data, trends or inconsistencies will stand out in your data. Then take time to frame the story, preferably in a visual way, which will help your constituents make sense of the information.
Tie your financial goals to your program and mission goals
Many of the annual reports and infographics I looked at had no connection between the mission stories and the finances -- no explanation of how the dollars were spent to reach the outcomes. While you see the occasional tie between the program story and an ask for a donation, you don’t often see the connection between an org’s strategic plan, operating plan and budget.
A workforce development organization shared its story about how it uses a social enterprise to provide clients with job experience to help them get jobs. But there was no mention about the added benefit of how the social enterprise is diversifying their revenue stream to include earned revenue?
So what? Before you can include financial data on an infographic, there has to be a real connection to share between how you manage your financial goals and your program goals.
Financial data creates a call to action
Money is tangible and understood by your audience. When you include financial data, stories and goals in your infographics it will create an easily recognizable call to action. When done well, your audience will feel compelled to provide support even without a direct ask.
For example, an organization can tell the story of how it meets its mission through their program, but it also must include information about where the funding comes from, how it is spent and the outcomes. It would be easy to include how much it would cost for a donor to support a specific portion of the work.
We shouldn’t hesitate to share our financial data to drive support, knowledge and engagement, we depend on it.
As the nonprofit sector faces increasing donor expectations around transparency and impact, weaving financial data into stories will become increasingly important. Done right, infographics provide a compelling and easy-to-understand way to meet these expectations.
For more information on how a donation of NetSuite’s cloud-based business management solution is helping nonprofits and social enterprises manage their entire organization to gain visibility into financial health and measure impact, visit http://www.netsuite.org/apply-for-donation.