Guest Blog by Erica McGeachy Crenshaw, CEO, Execute Now!
During this time of year, high school seniors across the country are weighing which one of the nearly 4,500 degree granting colleges or universities they’re going to send a deposit check for the fall enrollment-a daunting prospect since the decision will have much to do with their success and fulfillment as adults.
Since highly competitive universities can cost as much as a quarter of a million dollars, the question everyone must ask is “Which school can provide the best long-term return on my investment or ROI?”
The Grateful Grad Index
Matt Schifrin of Forbes magazine has developed “the Grateful Grads Index. The measure simply ranks colleges by the median amount of private donations per student over a ten-year period. The idea is that the best colleges are the ones that produce successful people who make enough money during their careers to be charitable and feel compelled to give back to the schools that contributed to their success,” explains Shifrin.
After Schifrin created the index a year ago, he updated it this year to account for an institution’s alumni participation rate because many of his readers argued that alumni consistently give but don’t necessarily earn high incomes.
The Grateful Donor Index
Colleges and universities aren’t alone in this snowballing race to demonstrate a return on tuition investment. Other nonprofits throughout the sector are equally focused on answering the ROI question to their donors and stakeholders. Why can’t EDs and CEOs incorporate a Grateful Donor Index into their reporting vocabulary? The next question becomes, “What can we do to make our donors grateful?” The answer is in the ROI.
Creating a grateful donor base involves connecting the dots between quality programs and impact with the donor’s investment. A return on investment is irrefutably linked to sound financials. I explain in my March 11 post that strong financial management is a crucial component linked to organizations’ ability to tell the whole ROI story. Without a solid understanding of how a charity’s bottom line is tied to each of its programs and services, determining true impact or return is a futile exercise. By setting up cost centers for each of your programs, you can better comprehend how each program is carrying its own weight, or even better, surpassing expectations.
Foundations on the ROI bandwagon
Foundations further bolster this ROI argument because of funders’ growing interest in and keen awareness of terms like “impact,” “measurability,” and “metrics.” Holly Thompson, contributing editor for The Grantsmanship Center in Los Angeles says, “Foundations want results and in making funding decisions, they’re assessing the potential return on investment (ROI) their grant dollars will produce.”
Put your mortar board on
Borrow the student – university scenario for a moment and ask yourself where you would rank in the Grateful Donor Index if there was one. What impact are you creating on your mission and how is it capturing the gratitude of your donors who’ve made the careful decision to support you? Or, draw a more specific parallel to the Grateful Grad Index question and insert “nonprofit” where “school” is: “Which nonprofit can provide the best long-term return on my investment?”
I challenge you to answer with conviction.
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