Demand for Social ROI Reporting Puts Pressure on Nonprofits

Many nonprofit leaders say donor demands on grantees to report social outcomes make for a challenging fundraising environment, a survey conducted by accounting firm Marks Paneth finds.

Based on online survey responses from a hundred and fourteen CEOs, executive directors, presidents, CFOs, and board members of nonprofits with  budgets ranging between $10 million and $200 million, the Nonprofit Pulse: A Leadership Study found that 47 percent of those surveyed said it was "challenging" or "extremely challenging" to raise funds in an environment in which donors have high expectations for measurement of social return on investment (SROI). In addition, 68 percent of respondents said their organizations will change their approach to SROI measurement in the next three years to meet donors' expectations.

The survey also found that nonprofit leaders embrace a "can-do" approach to increasing demands for SROI measurements, with 53 percent saying it is possible to report definitive SROI results within a year of a grant award. However, only 19 percent said their donors allow a portion of their gifts to be used to cover the cost of outcome measurement.

"While the call by donors for more insight into the impact of their giving raises new expectations," said Michael McNee, partner-in-charge of the Nonprofit and Government Group at Marks Paneth, "nonprofit leaders sit on the same side of the table as their donors and are eager to supply the metrics they are requesting."