Ratios Versus Results

What does your non-profit stand for? How do you raise money? As donors ask more and more for outcomes and details about programs what sets your organization apart? What figures, stats and stories do you use to tell your story? Do you know if your programs are better than the programs of other organizations?

Too often many organizations focus to strongly on administrative rate to judge if a non-profit is a good steward. I’ve always had a really hard time with administrative rates because it can be such a relative number. The administrative rate is traditionally the percent of money that goes to fundraising and administration versus to service provision. It bothers me because many times getting a good administrative rate has nothing to do with good fundraising or good program development. I also find that it’s hard to separate what dollars are “service dollars” and what dollars are “administrative.” Administration and fundraising has a lot to do with service provision.

So what’s the answer? What do you think? Post a comment and share your thoughts. One answer is to set up measurable outcomes. Non-profits need to be able to clearly articulate what is happening with the money donors are giving. How are lives being changed and how is the organization continually improving? Are you the best at what you’re doing or is someone else? Make sure that you are setting up measurable outcomes to help you and your donors know you are doing a good job.

A few conversations on this topic that might interest you related to the topic of outcomes:
Give Well– a foundation that is breaking the mold regarding donor outcomes. They are pioneering some radical ideas on what organizations make the most difference for your dollar.
Tactical Philanthropy– Google Finance has started a listing of organizations and Tactical Philanthropy has been talking with them about what kinds of measurable outcomes to use to list non-profits.

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One Response to Ratios Versus Results

  1. Kim Braun says:

    I previously paid quite a bit of attention to on administrative rate in my personal giving. I just recently came across this TED talk that made me rethink how I evaluate nonprofits: http://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong
    Dan Pallotta’s “The Way We Think About Charity is Dead Wrong.”

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