That is a great example and an excellent post on that study. You make a convincing case for how NPOs, should they choose, can simultaneously connect with donors emotionally while distinguishing themselves in terms of impact.

But while it is easy to understand why to shift to an impact focus is important, I am struggling to see who will drive this shift if not donors and and not the NPOs themselves? It does not seem like this is the sort of information that donors are likely to take the initiative to seek out (yet) nor type of information that NPOs are anxious (or even able) to provide.

Like i mentioned, I think socially beneficial for-profit organization will help stir the pot a little, but I dont think that alone will trigger a paradigm shift from “purpose” to “impact.” If NPOs dont want to provide it and donors dont know to ask for it, where does the shift come from? How do you create demand for something that neither side appears to want?

I agree that donors want emotionally appealing experiences. But I believe that funding an organization that manages to accomplish real good and have this good communicated back to a donor is far more emotionally satisfying than just giving.

An example: Imagine you want to provide funds to subsidize college eduction for disadvantaged kids. Let’s say one nonprofit promises to do this and tells you sad stories about the kids who need your help.

Nonprofit #2 tells you about the same kids, but also demonstrates that they system actually works. As you fund the organization, they don’t just keep telling you about the kids that need your help, they convince you that the kids you set out to help are actually being successfully helped! This is the emotionally satisfying outcome for the donor and the outcome the nonprofit is striving for and the outcome the served population needs.

On the NPO side, I really believe that the rise of socially beneficially for-profits is a huge disruptor in the non-profit space. As for-profits have been forced to explain how they will acieve social good within the context of a for-profit entity, the issue has naturally expanded to “how will you achieve social good, regadless of legal form?”

From the donor side the problem is a lot harder. Donors give primarily because it makes them feel good.
Attempting to “professionalize” donors by shifting their focus away from raw sentiment to more thoughtful forms of giving is difficult to say the least.

There is also the sticky issue of whether making the process of giving more of an “intellectual” exercise threatens the emotional basis with which most people give decisions. I recently read a study that compared fundraising appeals that used raw emotional messages and stories to those that used nubmers driven appeals and ones that used a mix of the two. The hands down winner was the raw emotional appeal – so much as adding numbers to an emotionally driven message made the package perform worse. That outcome is a rather tough pill to swallow for those that would hope to get donors to inject more thoughtfulness into the giving process.

Over the last decade or so, donors have been conditioned to consider things like the percentage of total fundraising that makes its way out the other end. I think we will start to see these sort of less useful metrics naturally supplanted by impact-based metrics, but it not clear who will champion this shift in the near term. I wholeheartedly agree with the need to awaken the donor community to the idea that “just ‘giving’ is not enough,” but it seems unlikely that non-profits (who are still struggling to articulate and measure their impact) will be the ones who drag donors along.

It is in some part objective, but it is also in some part relative.

A for-profit example: Companies have awesome CEOs as a start-up only to fire them when they grow to a certain size. At one point they had the best management objectively speaking. Later, they didn’t.

There is an element of “for you” that makes sense. But I would argue that some donors and some nonprofits are just objectively better than others. Just like some companies and some investors are objectively better than others.

Jonathan, glad you agree, but I’d also argue that most MBAs should spend more time in the social sector before they suggest that nonprofits are behind the curve. Some of my best friends are business students, but I don’t think MBAs are the key to optimizing the nonprofit sector. Maybe have tried and failed.

Nonprofits should spend more time in business school. Nevermind, looks like the business students are taking them over anyway.

But, I would append a “for you.” at the end of those statements. The goal is to find the best donor or grantee “for you.”

If we said, “Some customers are better than others!” I don’t think there would be any controversy.