Making the Case for Return on Philanthropic Investment

November 2009

The newest report from the Center for High Impact Philanthropy at the University of Pennsylvania is a guide for donors – but it holds important lessons for nonprofits as well. "High Impact Philanthropy in the Downturn" illustrates how nonprofits can present their case in the most meaningful of terms: return on investment. The Center, founded in 2006, synthesizes research, informed opinion and field experience to "provide information and tools to help philanthropists determine where their funds can have the greatest impact in improving the lives of others."

In illustrating high-impact funding opportunities to address the current housing, health and hunger crises, the report calculates the impact of philanthropic investments on broader indicators. For example, the cost to provide effective housing counseling ranges from $300 to $3,800, and this investment generates a $34,000 savings in municipal costs per foreclosure and helps stabilize home values and crime rates.

In addition to these quantitative measures, the report also utilizes case studies and testimonials, background information on social and economic trends, and charts and graphs to help make the case for funding organizations and programs that offer a high return on investment. Furthermore, the authors explain the factors behind an organization’s effectiveness – business model, exceptional business practices, etc. The report also emphasizes credibility indicators: certifications and accreditations, and links to federal and state agencies.

This blend of information is important in communicating to donors why an organization is a good philanthropic investment. Even organizations outside the social services sector can take a lesson from the techniques and messages utilized in this report.

Schultz & Williams is a national consulting firm based in Philadelphia; providing management, fundraising and marketing consulting for nonprofit organizations, along with full-service direct marketing, database and creative/production services.