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One of the core problems that many nonprofits face is that although we work to serve or protect people or resources that are often called “priceless,” this failure to monetize our causes has the ironic effect of rendering them valueless. Certain sustainability and environmental business stakeholders are now taking the step of monetizing to try to force corporate leaders to manage natural resources more effectively.
A close examination of these tactics reveals several strategies that other nonprofits can use to monetize the work they do every day and add value to their time and output in corporate terms. Assigning value to nonprofit work in this way isn't just good for business; it's great for the vulnerable people and resources that nonprofits work to protect and serves the greater public interest, too.
Sustainability advocates are now starting to have success showing corporate leaders just how costly it is to run a business without green, environmentally friendly practices in place. For example, while many businesses have resisted building more energy efficient buildings, it's now clear that doing so reduces their costs over time. This kind of investment in sustainability pays off, especially for big businesses.
But how does this work for other nonprofit messaging? That depends on the cause, but in most cases there's a good angle somewhere. For example, for domestic violence advocates, the monetizing pain point to hit is the billions of dollars that domestic violence costs American businesses alone. If we already know that domestic violence eats up 8 million days of paid work each year in the US, not to mention almost 6 billion in lost productivity, we have a great starting point for how much domestic violence work in the US is potentially worth.
In many cases a natural capital approach to sustainability is working for environmental groups. For example, Palau, a small island nation in the Pacific, depends on tourism for most of its economy. In 2011 researchers found that the average shark off the coast of Palau was worth approximately $1.9 million over the course of its lifetime—but only if it was not hunted. Its worth was as an attraction in prime scuba diving areas; once made legally fishable, that same shark's value drops to less than 1 percent of that figure.
Does your nonprofit focus on something that is worth far more in one form than in another? If your nonprofit works to teach adults to read, for example, you are definitely working on a natural capital issue. In the US alone the effects of low literacy cost at least $225 billion annually in crime, loss of tax revenue due to unemployment, and non-productivity in the workforce. And worldwide illiteracy is linked to extreme poverty, gender abuse, the spread of preventable infectious diseases, and high infant mortality.
One way we have all always tried to monetize our work is by showing how much value we provide for the funding we receive. Of course this is still important (and for many of us it is necessary). However, this is only the first step.
For example, say your nonprofit provides educational programming for kids in your community. Most of your funding is from government grants and private donors. You're probably in the habit of providing a detailed accounting of how the grant money is spent as a matter of course and showing how you give a dollar-for-dollar value back to every source.
Start focusing on how you squeeze three dollars (or more!) from every dollar you get—and you probably do, because that's how most nonprofits operate. Do this by assessing things like natural capital and the ways your cause relates to the cost of running other businesses, but also account for the value of volunteer work, the value of the impact you have on the community impact, and other value-added factors.
Remember, you're moving one step beyond your unique value proposition here, although of course that proposition is essential. You're not just showing your value to donors; you're showing how much value your nonprofit is contributing to the entire community.
Karla Lant is an experienced freelance writer and editor and an adjunct professor. Her particular speciality areas as a writer include technology, science, technical writing, business, law, finance, insurance, education, course development, copywriting, academic writing, and other nonfiction. Lant serves as the Lead Writer for the Museum of Science and Sustainability.