Increase ROI Without Sacrificing Innovation

Posted by on Jul 29, 2011 in Innovation | One Comment

By Derrick Feldmann, CEO.

Return on Investment is a common threat to experimentation in the nonprofit community.  When a nonprofit is worried about the bottom line, there isn’t a lot of energy left over for creative brainstorming sessions or grand ideas for big changes.

It’s understandable that organizations would be devoted to ROI without allocating enough energy to new approaches to giving and fundraising.   As understandable as it is, ultimately it means the organization will not broaden their horizons when it comes to new techniques such as online giving, social media, and text.  When their current tactics stop yielding positive results, there will not be any replacement tactics ready to contribute to ROI.

It’s time for ROI and innovation to coexist peacefully within the nonprofit sector, and yes—it’s possible. So how do we balance ROI with experimentation? Simple – find your Research and Development (R&D) Donor who can lead the way for internal organizational innovation.

In the for-profit world, most corporations have some form of R&D when it comes to budget and or staffing and they devote time and resources to innovation, testing, and creative development of new products. The nonprofit sector doesn’t have the same emphasis on research and development because money and staffing is tight.

Lack of money and staffing for R&D can be circumvented, however, if fundraisers find donors to support their ideas. These donors don’t just support your organization, but invest in your organization’s innovation. Board members, major donors, and other entrepreneurial constituents could lead the way in your organization’s research and development by providing the human and financial resources for important testing.  Many of these donors already understand the importance of R&D anyway, having business experience that relies on this department.

By getting donors to underwrite costs of text campaigns, new software, and other approaches to fundraising, you will enter into each experiment not with an ROI in mind, but rather a pure R&D emphasis that will help you understand the worthiness of the next big fundraising idea.

Be brave. Experiment. Include your donors in the process. You may be surprised at their interest in your innovative thinking.

  • http://www.givealittlenow.com Wendy Smith

    Many nonprofits use unrestricted donations from everyday citizen philanthropists making affordable donations to fund their R&D. I profile PATH in my book, “GIve a Little.” They are a multi-million dollar nonprofit that creates technology that aids in the distribution of medicines in remote areas of the world. They receive large foundation grants, yet it is the smaller pool of funds rec’d from individual donors in smaller amounts that funds their crucial work in research and development. Individual donors are powerful in their cumulative donations! It needn’t be a single R&D donor – make your case to your affordable giving friends!