As nonprofits rely heavily on donors to provide their revenue, the question becomes, how do prospects determine an organization’s donation-worthiness? What criteria do they use to make these decisions?

Motivations for their giving include receiving tax deductions and understanding the impact their investment is making. Studies show that donors ask less about where their money is spent and more about the impact their donation is making. But nonprofit leaders do not always know how to communicate their organization's impact to retain donors and attract new ones. So, how can nonprofit leaders effectively communicate impact to stakeholders?

The problem with ratios

Charity watchdogs are a type of nonprofit that publicly share information about charities, including reviews and ratings. They often use financial ratios to measure a nonprofit's impact, but these do not most accurately showcase a program's efficiency. High program ratios may be an attractive number to management, donors, and the public, who might mistakenly see these as evidence that an organization's revenue is going towards accomplishing its mission by providing services.

Storytelling as a solution

Evidence of impact comes through testimonies. Communicating what a nonprofit does through storytelling is a valuable and engaging tool for stakeholders. Storytellers strategically place the donor or prospect into the story, allowing them to help solve a problem, making them a hero. Feeling like a critical part of the story enables the prospect to emotionally and personally relate to the organization’s mission. Negative emotions are associated with the problem, while positive emotions connect to the solution. When a prospect sees themselves as a part of the story, helping solve the problem, the call to action is more meaningful on an intimate level.

Equip your nonprofit to tell stories of impact today

Where and how to tell the story

Nonprofit leaders can tell these stories of impact one-on-one or during events with stakeholders, but included needs to be both narratives and statistics. For example, "if you want action, you must help donors feel the pain of hunger by seeing it play out in one life. Then allow them to save one life – then another and another,” Emerson and Church share in Seven Cardinal Rules in Fundraising. Combining anecdotes with metrics that illustrate the problem can invite donors to be a part of the solution. Saying one child received one meal one day is an excellent metric to share to invite prospects to help solve hunger. However, sharing how this child is thriving, conquered health issues, and has the strength and energy to go to school paints a bigger picture of the impact of providing daily meals.

How to craft the story

The flow of a compelling story is audience → story → outcomes. You can draw the audience into the story through an emotional hook. Crafting your nonprofit’s story of impact occurs in three easy steps:

1. Audience: Who are you telling the story to? Define the audience as donors, volunteers, clients, staff, board members, or community supporters.
2. Story: How are you telling the story? Use the key elements and write the story adding the plot that addresses the problem, poses a resolution, provides chronology and context while using emotional engagement.
3. Outcomes: How will the story come to an engaging conclusion? End with a call to action to illustrate the outcomes such as behavioral change, financial support, volunteerism, community activism, and/or policy change.

A step-by-step plan on how to train your staff and board members today

• Training: Provide training on storytelling for impact to all staff and board members within your organization
• Story Writing Workshop: Define the spaces where you want to share stories of impact and have stakeholders engage in the process of writing these together
• Test Your Stories: Practice your stories on donors and get their input and feedback
• Database of Stories: Create a folder or electronic file that contains these stories organized by topic, audience, and purpose
• Implement a Follow-Up Plan: In following up after telling a story, you can demonstrate additional impact

Overall, storytelling in the nonprofit sector is critical to fundraising and stakeholder engagement. If nonprofit leaders neglect the art and science behind storytelling, they leave prospects to decide donation-worthiness or attempt to discern impact from ratios and ratings. The more equipped nonprofit leaders are to communicate stories of impact effectively, the more the nonprofit sphere will change dramatically. Nonprofit organizations will be free to spend their time, energy, and resources on accomplishing their missions rather than maintaining their ratios.

Casey Davis is a 2021 graduate of the Master of Nonprofit Leadership and Management program at Arizona State University. She is a fundraising specialist who has worked as a consultant for various nonprofits in San Diego for the past 14 years. She is currently the Senior Director of Development of Diabetes Research Connection.

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