Donor Versus Investor

Every nonprofit has donors and investors. In general, donors give a little and investors give generously. Do you know why?

Investors as the name implies are vested or deeply interested in the mission and the promised outcomes. They are paying to have the mission accomplished and the outcomes achieved. They have a long-term view. Their long-term view causes them to be the foundation of a sustainable funding stream.

The difference between donors and investors is related to the willingness of the donor to give. Investors are disproportionately generous based upon their capacity and their other gifts.

Think about the individual who gives half of all his charitable funds to one organization and the other half to 10 organizations. In the one, he is an investor. In the other 10, he is just a donor.

Usually, an investor will cutback or eliminate gifts to the other 10 before reducing the gift to the one. The attitude that guides the investor’s thinking is the reason that he or she is part of a sustainable funding stream. The investor is as committed to sustainable funding as you are.

As you can see, donors are involved in the organization but investors are committed to the mission and the outcomes that the clients achieve. Donors give because the organization has a need for funds. They will respond to a plea for funds to keep the lights on, staff paid, and other operational activities.

The investors give because they want the results promised by the mission statement and the outcomes promised to the clients. The investors know that it is important to pay for lights, staff, and all of the operational expenses. They expect part of their gift to serve those purposes.

Investors want to know what the return is on their gift. They care about the evidence that proves lives were changed and that the change was positive, meaningful, and sustainable.

Donors will make a gift to feed the hungry. It is important to prevent people from starving. However, it fails to pass the investor’s test. The investor wants evidence (verifiable facts) that a sustainable and meaningful change occurred in someone’s life. From the investor’s point of view preventing someone from starving only maintains the status quo (keeps the person alive) nothing changes.

Next Step:

Review your mission statement and expected client outcomes to determine if they will attract the interest of an investor (Do the outcomes promise a sustainable, meaningful, and measurable change?)

Review how you communicate your success to your givers to ensure that you are emphasizing the evidence you have of success

Focus your appeals on investors

Donors will respond equally well to needs or evidence. Investors are more selective and place their emphasis on evidence.

Long-term sustainability depends on having investors. Investors are the foundation of a sustainable funding stream. The investor’s passion for the mission and outcomes motivates the investor to recruit additional givers (some will be donors and others will be new investors). The recruiting of new givers reduces the work you need to do and is another way they help to create sustainable funding.

If you want a sustainable funding stream with less work, focus on cultivating, recruiting, and nurturing investors.

As always, contact Mission Enablers if you want help. We use a special process that offers a guarantee. For more information about our process and guarantee, you can click here.

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