Return on Investment: The Key to Nonprofit Sustainability » (New Edition)

Tom Ralser, founder of Capital Strategists Group, LLC has worked with hundreds of organizations in forty-eight states. He has over eighteen years of experience working with organizations seeking his financial know-how and analytical skills. He holds the prestigious Chartered Financial Analyst (CFA) designation and applies his skills to the challenging task of investment justi-fication in the nonprofit world.

ROI for Nonprofits: The New Key to Sustainability

"Nonprofits are not that different from for-profits." This statement alone can cause heated discussion, but the truth is, nonprofits face the same challenges as for-profits when it comes to raising money and keeping investors happy. When investors in nonprofits are shown that their money is making a difference and their investment is paying off, they are more likely to keep investing—making return on investment (ROI) a valuable method for nonprofits to demonstrate the value of their organization.

Written by Tom Ralser—a CFA uniquely qualified to apply ROI methodologies to the nonprofit sector—ROI for Nonprofits: The New Key to Sustainability details the methods and processes to help non-profits raise money in an environment that increasingly demands accountabi-lity, transparency, and results. Divided into two main sections, the first section of the book establishes the benefits and motivations for the investment-driven approach, while the second section demonstrates the range in which ROI can be put to use.

Filled with an abundance of case studies as well as pragmatic tips, tools, and methods used successfully by hundreds of nonprofits, this practical book covers topics including:

• 
  Defining ROI
• 
  The Leverage of Investors
• 
  Learning from the For-profit World
• 
  Moving to an Investment-based Mindset
• 
  It's the Economy Stupid! Revisited
• 
  Treating Investors as Investors
  
  

The prospective investor in a nonprofit wants to know "What was accomplished with my money?" ROI for Nonprofits: The New Key to Sustainability offers imme-diately useful concepts that accentuate, enhance, and augment solid fundraising and represents a major change in how to capitalize on the motivations of those who are likely to invest in your organization.

Foreword     ix
Preface     xiii
Introduction     xix
About the Author     xxiii
Why ROI?     1
Demystifying the Status Quo     3
They're Big and in Business     3
Facts Are Facts     3
They're Everywhere     7
They Are Different     11
The Changing Philanthropic Environment     19
Dead Economists and Nonprofits     19
Three Paradigm Shifts     20
The Leverage of Investors     26
The Evolving Landscape     27
An Unlevel Playing Field     28
Organizational Reluctance     33
Learning from the For-Profit World     33
Five Classic Fundraising Misconceptions     35
More on "People Give to People, Not Causes"     38
More on "Nonprofits Can't Be Run Like a Business"     40
Success Leaves Clues     40
Fear of "Putting Your Mission Up for Sale"     41
Organizational Change     43
Moving to an Investment-Based Mindset     43
Nonprofit vs. For-Profit Models     44
Moving Up the Motivational Pyramid     45
Organizational Value/Nonprofit ROI     51
Beyond Logic Models-Moving from Outcomes to Outcome Value     51
The Silver Bullet Syndrome     56
Defining ROI     59
Valuing Values     60
The Value of Expected Value     62
Introducing the Organizational Value Proposition[Registered]     67
Market Pull     67
It's the Economy, Stupid! Revisited     68
Overcoming the Pushback     70
Structural Obstacles     72
Intended Uses     75
ROI Foundations and Techniques     77
Building an OVP[Registered] for Your Organization     79
Five Steps to Demonstrating Value     80
Areas of Focus     88
Suggested Methodologies     99
Present Value Basics     99
Capital Budgeting     102
Present Value of Future Benefits     105
Multiplier Effects     107
Comparison Basics     110
Return Ratios     110
Communicating an ROI-Based Program     113
Treating Investors as Investors     113
The Importance of an Investor Relations Program     114
Examples     117
But What Happens in Four Years?      118
Unconventional Wisdom     121
Putting OVP to Work: ROI Profiles     123
Rural, Small, and Dependent on Grants     123
Good Track Record, but Not Well Known     126
Demonstrating Importance to the Community     128
Large and Well Known, but Campaign Has Stalled     130
Large and Well Known, but ROI Not Obvious     132
Drilling Deep into the Private Sector     134
ROI Gone Wrong     139
Making the Economic Pie Bigger     142
Index     147