Uncover new donors by creating economic value

“To be market driven, you have to determine who your customer is. And interestingly enough, it may not be the people your organization is dedicated to serve–your clients. Your customer is the one group from among all your stakeholders who, more than anyone else, determines your survival and your success.”

Steve Rothschild’s seven principles of success in his book The NON Nonprofit are rooted in his revelation of consistent methods he has implemented as an accomplished business leader in a Fortune 100 company and as a CEO of a thriving nonprofit that succeeded in creating economic value from social benefit.

If phrases like “Be market driven” (principle #3) and “Create economic value from social benefit” (principle #6) have you thinking you’re reading from a business book, think again. After creating the seven principles in the corporate world, Rothschild tested them in his own nonprofit, Twin Cities RISE!, and observed them in many other sector examples he discusses in The NON Nonprofit.

I asked Rothschild to explain his view of creating economic value in his own nonprofit:

CausePlanet: Principle #6 (Create economic value from social benefit) addresses the notion that “we are accustomed to thinking about social good in terms of moral imperative rather than economic benefit. But every improvement in social good does in fact have monetary value—to the participant, the state, or some other stakeholder.” Jason Saul, who authored The End of Fundraising, would wholeheartedly agree with you on this point. What did you determine was your “marketable” social benefit at Twin Cities RISE!?

Rothschild: Twin Cities RISE! trains underemployed and unemployed adults, primarily black men, with multiple barriers to employment, including low academic skills, criminal and addiction backgrounds, and poor work histories for living wage jobs. Over the last 15 years, it has been successful in boosting graduates’ pre- to post-training incomes from an average of @$5,000 to @$25,000. As its graduates’ incomes have increased, they pay more sales and income taxes and use less low-income health care, childcare and housing. They also save corrections costs. These cash benefits to the state of Minnesota and also the federal government derive directly from the social value that was created by lifting individuals and their families out of poverty.

What is your marketable value are you creating in your organization? If you can identify your marketable value, Jason Saul argues that you can pursue an entirely new set of stakeholders. He calls this new set of stakeholders “impact buyers,” who are willing to pay for social outcomes. Saul identifies the three highest value outcomes these funders want to buy and we highlight them in the Page to Practice™ summary.

See also:

Forces for Good: The Six Practices of High-Impact Nonprofits

Do More Than Give: The Six Practices of Donors Who Change the World

Nonprofit Sustainability: Making Strategic Decisions for Financial Viability

Image credit: EducationNews.org

2 responses to “Uncover new donors by creating economic value”

  1. Forcing yourself to think about the economic value a donor would place on involvement with your cause for “giving back,” “paying it forward,” or even “improving my community,” helps you understand there is always a balance struck between the donor and the cause. The DONOR is the customer and receives an intangible, but valuable benefit.

    • Denise says:

      You’re right, Heidi. I like Steve and Jason’s claims because they remind you to think of your donors as customers and receiving equal return, if not more, than your cause’s clients…espcially if your donors are highly altruistic.

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