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Blog
Best Practices 2 min read

ROI Analysis: Maximize Nonprofit ROI - Learn More on Our Blog

Rob Cardosi April 11, 2017
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Maximize Nonprofit ROI

Strategic tips to maximize nonprofit ROI

Does your organization struggle with managing resources? Nonprofits are always looking to save money and make sure every investment is cost-effective. With the changes in the economy, organizations want to make sure they are giving all they can to their causes. Every penny counts in the effort to maximize nonprofit ROI!

There are a few key elements that nonprofits should consider before investing. Although, money should not be the only factor when making a decision. Whether your nonprofit is researching volunteer management software or considering expansion of staff, taking a closer look at all options will help maximize nonprofit ROI.

How to Maximize Nonprofit ROI?

ROI (return on investment) is a term you may have heard discussed in the nonprofit community. At the highest level, a return on investment measures the gain or loss of an investment. But what does it truly mean? Your ROI is not only the financial benefit you receive from an investment but the overall impact it has on your organization.

When thinking about how to maximize nonprofit ROI, monetary results are not the only thing to consider. Here are a few other components and benefits your organization might receive from a successful investment:

  • Saving time
  • Creating efficiency
  • Increasing productivity
  • Inspiring innovation
  • Increasing the impact of your nonprofit’s mission
  • Encouraging leadership
  • Developing effectiveness
  • Increasing employee morale

For example, if your organization is considering automating your volunteer management efforts it could yield all of the above benefits. Making processes easier for your staff can have more than a positive impact on your nonprofit.

Taking a Closer Look to Maximize Nonprofit ROI

Now that you can see there are multiple factors in calculating your true return on investment, it is time to take a closer look. Picture this: your nonprofit has a big gala starting in 2 hours. You have 200 volunteers signed up to support your cause. Upon their arrival, you misplace one of the registration sheets. It takes you 20 minutes to find a printer and sign in the volunteers who have been waiting patiently to be assigned a job.

30 volunteers are waiting in line, who have now wasted 600 minutes altogether. The average volunteer hour is worth $23.56. This means that your organization has now lost $235.60 by not being organized and efficient. This might also discourage those volunteers from continuing to give their time to your organization. If their time was wasted they will feel as though they were not contributing to your cause.

A simple mistake that could have been prevented can have a ripple effect on the entire organization. By investing in volunteer management software, this type of situation could have been prevented.

By taking a deeper dive into missed opportunities you can see that how you invest can impact every aspect of your nonprofit.

What is the Opportunity Cost of the Investment?

Has your organization considered the opportunity cost of not pursuing an investment? An opportunity cost is the loss or gain of an alternative investment. This could be anything from a monetary investment to a time investment.

In the above example, this was a missed opportunity. By not making the investment the nonprofit missed out on $235.60 and disappointed 30 volunteers. It could have had an exponential impact. These situations can be detrimental to your organization.

Your organization spends countless hours organizing and planning fundraising opportunities. Why waste that because your organization is fearful of taking a risk and trying something new? When calculating and determining if an investment is right for your nonprofit, make sure you consider all options. Be open-minded to the bigger picture and see what you can accomplish with this investment. Remember, monetary benefits are not the only important benefits. Consider all factors that can have a large impact on your nonprofit.

  Check Out Our Additional Resources VolunteerHub provides a bevy of resources to help you succeed in volunteer recruitment, engagement, and management.       


Topics Discussed

  • Best Practices

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