On this episode of A Modern Nonprofit Podcast, host Tosha Anderson welcomed Sheri Chaney Jones, CEO and Founder of SureImpact, to discuss how nonprofits can leverage data to better engage donors and stakeholders.

The Shift Towards Impact Investing

Sheri highlighted a significant shift in the nonprofit world over the past two decades. What was once seen as a luxury – the ability to measure and evaluate program impact – has now become an expectation. Donors across the board, from individual philanthropists to government funders, are thinking more like impact investors. They want to see quantifiable evidence of how their contributions are creating social change.

This shift has real consequences for nonprofits seeking funding. According to Sheri’s research, organizations that can quantify and communicate how they’re changing lives are 68% more likely to win grants compared to those who only report on outputs (e.g. number of people served).

See the full Youtube video here:

Debunking the Size Myth

One of the most enlightening parts of the conversation was Sheri debunking a common misconception – that only large organizations have the ability to effectively collect and analyze impact data. In reality, her research has shown no correlation between an organization’s size/budget and their capacity for impact measurement.

The number one factor predicting success in this area is the willingness and commitment of leadership to prioritize impact measurement. This means even small, grassroots organizations can excel at quantifying their impact if they make it a priority.

Key Metrics Every Nonprofit Should Track

Sheri emphasized that nonprofits don’t need to track endless amounts of data. She recommends focusing on three key areas:

1. Who you’re serving (demographics)
2. What you’re doing with them (services provided)
3. How they’re better off as a result (outcomes)

To determine what specific outcomes to measure, Sheri suggests nonprofits ask themselves three key questions:

1. Why does your organization do what it does?
2. Why do participants seek out your services?
3. Why do funders support your work?

The answers to these questions should guide what outcomes you measure and report on.

Overcoming Data Hesitancy

The conversation touched on why some nonprofits might be hesitant to fully embrace data-driven decision making. There can be fear around what the data might reveal – perhaps programs aren’t as effective as believed. Sheri emphasized that while confronting these “brutal truths” can be difficult, it’s essential for truly mission-driven organizations to know if they’re having the intended impact.

A Holistic Approach to Organizational Metrics

While the discussion focused heavily on programmatic impact data, Sheri noted the importance of taking a holistic approach to organizational metrics. Just as for-profit businesses use balanced scorecards, nonprofits should have data-driven goals for every department – from finance to marketing to programs.

Practical Steps for Getting Started

For organizations feeling overwhelmed by the prospect of implementing robust impact measurement, Sheri offered some practical advice:

1. Start small – focus on those three key metrics mentioned earlier
2. Utilize user-friendly tools – from simple spreadsheets to more robust platforms like SureImpact
3. Have a clear purpose for each metric you track – know how you’ll use the information to improve programs, communicate with funders, etc.

The Power of Leadership

A key takeaway threaded throughout the conversation was the critical role of leadership in creating a data-driven culture. As Tosha noted, “it all goes back to leadership” – whether it’s fundraising success, financial management, or program quality.

While the task of creating a culture of excellence across all these areas can feel daunting for nonprofit leaders, embracing data and KPIs is crucial for any successful organization.

Take the Next Step

As the nonprofit sector continues to evolve, the ability to effectively measure and communicate impact is becoming increasingly important. By embracing impact measurement, even small organizations can better engage donors, improve programs, and ultimately scale their impact.

For those interested in learning more about implementing impact measurement in their organization, Sheri invited listeners to visit sureimpact.com or connect with her on LinkedIn.

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About The Charity CFO

We are an accounting partner that truly understands nonprofits. We know the missions that drive you, the obstacles that challenge you, and the dedication your job demands. We “get” nonprofits, because nonprofits are all that we do. If you need help with your accounting and bookkeeping, let’s talk. Book a FREE consultation here

It’s obvious that well-run and successful nonprofits need the security and flexibility that operating reserves provide. 

The finance director role is critical to the success of any nonprofit, making it one of the most important hires an organization can make. They are responsible for the financial health of the organization. They create and maintain financial records, prepare financial reports, and oversee the organization’s budget.

Financial managers often work closely with the organization’s executive director to ensure that the organization’s financial needs are met and help drive best financial practices within the organization. They handle all payroll and accounting functions and manage investments and fundraising efforts.

If you are looking for a finance director, it is important to find someone who is not only qualified for the position but also fits well with the organization’s culture. Here’s a look at some of the qualifications you should look for in a nonprofit finance director and tips on how to verify those qualifications:

Qualifications For A Nonprofit Finance Director

1. A Bachelor’s Degree In Accounting, Finance, Or A Related Field Is Required.

This is the minimum educational requirement for most nonprofit finance director positions. A bachelor’s degree will give the candidate a strong foundation in accounting and finance principles, which is essential for the role.

They should demonstrate an extensive understanding of accounting and finance regulations and best practices for financial management in a nonprofit setting. 

Why this is important

A bachelor’s degree in accounting, finance, or other related fields prepares them to analyze financial data and advise the nonprofit on financial decisions. This background helps them provide oversight for and manage all forecasts, budgets, and investments for the organization.

How to verify

The best way to verify that a candidate has the necessary educational qualifications is to request a certified copy of their transcript from their college or university. If in doubt, you can always contact the school to confirm that the candidate did indeed graduate with the degree they claim to have.

2. Certification As A Certified Public Accountant (CPA), Chartered Financial Analyst (CFA), Or Certified Financial Planner (CFP) Is Preferred.

While not always required, certification from one of these professional organizations is highly preferred for finance director positions. These certifications demonstrate that the candidate has the necessary skills and knowledge to perform the job effectively.

CFAs are best known for investment analysis and wealth planning, CPAs for tax preparation and financial statement auditing, and CFPs for financial planning. Working with a CPA with additional certification, such as a CFA or CFP, can bring a well-rounded perspective to the finance director role.

Why this is important

Nonprofits are subject to a unique set of financial rules and regulations. A CPA, CFA, or CFP designation shows that the candidate is familiar with these rules and regulations and is, therefore, better suited to advise the organization on financial matters. CPAs. CFAs and CFPs will provide a more micro analysis of how the organization’s finances and assets are managed and allocated.

How to verify

The best way to verify that a candidate has the necessary certification is to request a copy of their certificate from the issuing organization.

3. 5+ Years Of Experience Working In Accounting, Finance, Or A Related Field Is Required.

You want to work with someone with extensive industry-specific experience. Look for a nonprofit finance director with at least five years of experience working in accounting, finance, or a related field.

The candidate should be able to show that they have progressively more responsibility in their previous roles, as this will demonstrate their ability to take on more complex tasks. 

Why this is important

Work experience ensures the candidate can hit the ground running and be an effective team member from day one. It also allows them to bring their own unique perspective and insights to the role.

How to verify

Candidates should have a clear career progression that shows they have taken on more responsibility over time. This progression should be evident from their resume and/or LinkedIn profile.

4. A Strong Background In Nonprofit Management

This is quite a common requirement, as most organizations will want to see that the candidate has some experience working in the nonprofit sector. This experience is essential for understanding the unique financial challenges that nonprofits face.

Why this is important

The success of a nonprofit organization depends on its ability to deploy its financial resources efficiently. The finance director plays a vital role in ensuring that the nonprofit uses its resources and assets in the most effective way possible.

How to verify

The best way to verify that a candidate has the necessary experience is to request references from previous employers. These references should be able to attest to the candidate’s experience and skills.

5. Experience In Integrating IT Systems

Today, technology is at the center of most businesses—and nonprofits are no exception. As nonprofits become increasingly reliant on technology, finance directors must have experience working with and integrating various financial systems and software programs. This experience will be invaluable in ensuring that the organization’s finances are managed effectively and efficiently.

Why this is important

With the right technology in place, nonprofits can save time and money by automating various financial tasks. Expertise in various technology systems also helps improve bookkeeping and accounting productivity, accuracy, and compliance.

How to verify

When reviewing a candidate’s resume, look for evidence of experience working with various financial software programs and systems. You can also ask them specific questions about their experience during the interview process.

6. Robust Analytical Skills

A finance director must be able to understand and analyze complex data sets. They should also be comfortable working with spreadsheets and other financial software programs.

Why this is important

Analytical skills are critical for evaluating financial data and making sound decisions about where to allocate resources.

How to verify

Verify by asking the candidate to describe a time when they had to analyze complex data in their previous role. You can also ask them specific questions about their experience working with spreadsheets and financial software programs.

7. Excellent Communication Skills

The ability for communication, with various stakeholders, is essential for the finance director role. The candidate should be able to distill complex financial information into layman’s terms and present it in a way that is easy to understand.

Why this is important

The finance director is often the bridge between the accounting/finance department and other departments within the organization. As such, they need to be able to clearly communicate financial information to people with non-financial backgrounds.

How to verify

Communication skills can be difficult to assess, but you can get a good sense of a candidate’s ability by paying attention to how they communicate during the interview process. Do they speak clearly and concisely? Are they able to explain complex concepts in simple terms?

8. Leadership And Management Skills

In addition to being an expert in financial matters, the finance director must also be a competent leader and manager. They should have experience leading and motivating teams, as well as experience developing and implementing strategic plans.

Why this is important

The finance director is responsible for leading the organization’s finance team and ensuring it functions effectively. They must also be able to work closely with other department heads to develop and implement strategic plans that achieve the organization’s goals.

How to verify

Do they exhibit high emotional intelligence? Are they able to take charge and motivate a team? Do they have experience leading and managing people? These are all qualities that will be important in a successful finance director.

9. Strategic Thinking

The finance director should be able to think long-term, anticipate future trends, and develop strategic plans accordingly.

Why this is important

The finance director plays a key role in developing and implementing the organization’s strategic plan. They must be able to anticipate future trends and be able to adjust and execute the plan.

How to verify

Does the finance director have a track record of successfully implementing strategic plans? Do they have a history of being able to anticipate future trends? 

What If Your Budget And Staffing Needs Don’t Support a Full-Time Finance Director?

If your organization doesn’t have the budget or staffing needs to support a full-time finance director, you may want to consider hiring a part-time or freelance finance consultant. This can be a cost-effective way to get the expertise you need without breaking the bank.

When hiring a part-time or freelance financial consultant, be sure to verify their experience and qualifications just as you would for a full-time finance director. In addition, be sure to clearly define the scope of work and expectations upfront to avoid any misunderstandings down the road.

Get Outsourced Nonprofit CPA & CFO Services

If your organization is in need of top-notch financial leadership but doesn’t have the budget to support a full-time finance director, outsourcing your accounting and finance functions may help you close the gap and get the expert help you need.

At The Charity CFO, we offer a full range of professional outsourced CFO and accounting services to nonprofits of all sizes. Our team of experienced financial leaders can provide the expertise you need to keep your organization on track without breaking the bank.

Our bespoke services are designed to meet each client’s unique needs and can be customized to include as much or as little support as you need. Whether you need help with financial planning and budgeting, grant management, short and long-term planning, or a team leader who will play a formative role in building the culture, we’re here to help.

Contact us today to learn more about our nonprofit CPA and CFO services and how we can help your organization thrive and succeed in its mission. 

Why do people donate to nonprofits?

After all, giving away money isn’t rational. Moreover, from a human behavior standpoint, the psychology of fundraising doesn’t appear to make sense. And yet, people across cultures and contexts give generously to organizations that share their values. 

So, what forces explain fundraising psychology? And how can you harness those forces to raise more money for your organization?

The Psychology of Fundraising

There are many reasons your donors give you money, but we’ll list some of the most common ones here. 

Which reasons matter most to your organization depends on your audience, but understanding which psychological triggers motivate your donors is the first step to overcoming your fundraising challenges.

A Sense of Duty

According to one survey, 96% of donors feel a duty to give back to society and help others. 

They may use phrases like, “I have a responsibility to help my brothers and sisters.” Or, “This is just how I was brought up.” They associate donating with a sense of honor. At the very least, they feel giving back is an expectation placed on them by society.

Religious Faith

Tithing is a common practice in many faith traditions. While giving may be obligatory for this group, it doesn’t necessarily mean it’s joyless! Many give a portion of their tithe to support non-religious social causes or even increase their giving above 10% to live out their religious calling to help others.

Making a Difference

Givers from younger generations, like Gen Xers and Millennials, have a reputation for thinking globally. They want to make the world a “better place” or “change the world.” People motivated to make a difference often give money to organizations making things happen on a scale greater than an individual can accomplish alone.

Wanting to Belong

At our core, humans are social animals and your donors are no exception! Contributing financially to an organization can be a way of bonding with like-minded people or demonstrating membership in a pack. And research shows that donors give more when they have a sense of belonging! Savvy fundraisers will tap into this aspect of fundraising psychology and create opportunities for donors feel like they’re a part of a team or movement. Get your donors involved, and your donations will rise!

Anger

Many people are frustrated and angry about the way things are. And that righteous anger is a powerful motivator to support organizations fighting injustice. While it’s unfortunate that anger is a motivating force, it has tremendous potential to drive significant fundraising. So if your audience is angry, look for ways to help them channel that anger into finding positive solutions.

Why do donors give YOU money?

Understanding fundraising psychology is more than simply knowing what motivates your donors. You need to understand why they choose to donate to YOU.

After all, hundreds of nonprofits are working on almost every possible cause or mission. So why do they choose you?

What you offer your donors is a value proposition–you’re showing them why they should choose you and what they will get for their “investment.”

Your value proposition shouldn’t be an accident. It’s part of a well-defined communication strategy designed to attract your ideal customers. 

Here are the 4 elements of a compelling value proposition:

1. Appeal

Your appeal is simply your likability factor. What do your constituents like about your organization? What are you doing or producing that they appreciate? What’s exciting about how you are showing up in the world?

Emphasize the humanity of your organization, writing, and speaking like real people! After all, people prefer to give to people — not to anonymous nonprofit corporations.

2. Exclusivity

If your audience perceives that your organization is the same as other organizations, they’ll have no reason to give you money. Instead, help them choose you by identifying exactly how your organization differs from other nonprofits with a similar mission.

Highlight unique aspects of your services, including specific programs and the communities you serve. Even if your mission is similar to another organization’s (for example, many nonprofits feed the hungry), you can emphasize the unique way you carry out that mission.

3. Credibility

Do your constituents honestly believe your organization can achieve its mission? Or that their money will reach the community you claim to support? No matter a donor’s motivation, they won’t give unless they are confident that their money will be used effectively.

So, how can you use fundraising psychology to increase your organization’s credibility? 

• Include statistics — talk about what % of your donations goes to services, the dollar value of services provided, or the number of people impacted by your work.
• Tell stories that demonstrate your impact. Humans love stories and telling one individual’s transformation story is more effective than talking about your “mission” in generic terms.
• Provide case studies about your success and the work yet to be done.

4. Clarity

Your audience won’t give if they can’t clearly understand what you do and how their donation will make a difference. Your audience isn’t involved in the day-to-day running of your organization, so you can’t assume they know what you do. 

Your prospect needs to clearly understand what you do before you can tell them why they should give. Start by eliminating jargon, confusing words, and run-on sentences. Strive for clear, matter-of-fact messaging over clever or cute catchphrases. And ask for feedback from your target audience to ensure they grasp your mission and purpose.

A fundraising pro’s tip to multiplying online donations

Here’s a startling statistic:

Only 20% of people who click on a donate button make a donation.

In other words, even after you’ve convinced someone to navigate to the donation page, 80% of them will not give you any money!

That shows that not enough nonprofits are taking the psychology of fundraising seriously enough.

But Tim Kachuriak takes fundraising psychology very seriously as the Founder and Chief Innovation & Optimization Officer of Next After, a consulting firm dedicated to optimizing fundraising. He’s spent the last 15 years analyzing data from and implementing fundraising psychology within the nonprofit sector.

Tim has successfully raised conversion rates by 500% for his clients by adding more writing to their donation pages.

Many people think that “less is more” when it comes to copy in online marketing, but it’s not always true.

Donors want to be reassured that their money will be used wisely. And your donation page is your final chance to tell them exactly why your organization is the best choice for putting their money to good use.

So take advantage of this opportunity to sell your organization and your mission. Pull out all the stops and make the same argument you’d make to a donor face-to-face. Make them feel why they should trust your organization with their donation.

Understanding the psychology of fundraising can help you raise more money

Fundraising psychology tells us that people give to unique organizations that clearly communicate their effectiveness and likability. 

Furthermore, the data shows that spelling out the reasons to give — no matter how many words it takes — is the best way to convert prospects to donors.

If you’d like to learn more about how the psychology of fundraising can help your organization raise more money, check out our podcast episode with Tim Kachuriak for a professional’s tips on getting more (and bigger) donations:

We’re proud to announce that Sara Welch has been promoted to the role of Staff Accountant at The Charity CFO.

Sara joined our team as an Accounting Assistant, coming from a background in both healthcare and higher education. She showed an immediate aptitude and passion for accounting, making herself an invaluable part of our client service team.

Sara first explored her passion for helping others by attending Occupational Therapy Assisting school after completing a Bachelor’s of Science in Exercise Science at Southern Illinois University – Edwardsville.

And while helping others was always the main goal, neither healthcare nor higher education seemed an appropriate fit. A chance meeting with The Charity CFO Founder and CEO Tosha Anderson opened Sara’s eyes to the world of nonprofit accounting. 

She has excelled at her role and is eager to continue growing within the company.

In her free time, Sara enjoys camping, hiking, and all things outdoors. She also enjoys painting, traveling to new places, and hosting game nights for friends.

Please join us in congratulating Sara on her promotion! There are many ways to help others, and we’re so glad that Sara has chosen to help us support our clients and the valuable work they do in their communities.

We’re proud to announce that Triná Owens has joined The Charity CFO in the role of Accounting Manager!

Triná joins our team after serving in senior finance positions at two different local St. Louis nonprofits. Her knowledge of the nonprofit industry and her first-hand experience navigating the challenges of nonprofit accounting will make her an invaluable asset for our clients.

Triná holds a Master’s Degree in Business Administration and a BA in Accounting from Harris-Stowe State University. She decided early in her career to only serve nonprofits with her skills in accounting and finance, and she honed her talents working for several nonprofits in the St. Louis area.

She is dedicated to furthering her professional growth to better serve the nonprofit community, most recently graduating with the Spring 2020 Emerging Leaders cohort with Focus St. Louis.

When she isn’t working with our nonprofit clients, Triná serves in several volunteer roles, including:

• Board Treasurer for Black Girls Do STEM
• Incoming Board Treasurer at Deaconess Nurse Ministry
• Acting in a financial and outreach capacity within her church,
• And helping facilitate and lead groups on developing budgets for nonprofits and churches.

As if that doesn’t keep her busy enough, she was also responsible for her church’s finances and outreach for 10+ years and held small group sessions at small her church teaching congregants how to budget. Most recently, she assisted a class with Eden on creating a budget for churches and other nonprofits.

Please join us in welcoming Triná to our team! We feel fortunate to have her with us…and we know that our clients will feel the same way!