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Why It’s Time to Rename the Nonprofit Sector to the For-Impact Sector

By Michael Seiler January 12, 2022

If this post’s catchy subject line made you click to read it, we just proved that when it comes to marketing, the words we choose make all the difference.

So if messaging is so important, why is the nonprofit sector referred to by a tax code assigned by the IRS 100 years ago? Can we agree that we are put at a disadvantage when we describe ourselves as what we are not? If we mobilized and rebranded as the “for-impact sector,” our purpose would become more clear, united by our mission to create positive change in our world. This small change would create inspiration and be a more worthy way to celebrate the 12.3 million changemakers working at our country’s mission-driven organizations.

The implications are vast. We live in a time when many social and environmental crises beg us to rethink not just what we call ourselves, but more importantly, how we get the good work done. Agility is more important than ever, and modernizing our sector is critical to achieving our missions and addressing the world’s biggest challenges.

We recently convened a cross-section of leaders in the for-impact sector to discuss best practices for implementing innovative strategies and tools to support constituent engagement, fundraising, and reporting. Below are some of the key takeaways from our conversation.

Child playing with toy spaceships in a hospital room
St. Jude Children’s Research Hospital is the charitable beneficiary of Inspiration4, the world’s first all-civilian mission to orbit the Earth, which went into space on September 15, 2021. ​​

“If you don’t reinvent yourself, somebody else will do it for you, and you’ll lose leadership.”
— David Jacques, CIO, ALSAC

ALSAC, the fundraising and awareness organization for St. Jude Children’s Research Hospital, has helped St. Jude drive the survival rate of childhood cancer patients from 20% to 80% since the hospital was founded in 1962 — how’s that for impact? In our conversation, David Jacques, the organization’s chief information officer, shared that ALSAC was named number one on Fast Company’s “2020 Best Workplace for Innovators” list, beating out expected names from the for-profit sector.

“We have a guiding principle that we need to be continually reinventing ourselves, and that comes directly from the CEO,” Jacques says. ALSAC has an internal accelerator where new ideas are explored and tested. They’ve raised tens of millions of dollars by creating fundraising campaigns inside virtual gaming worlds. And last September, they launched an unprecedented fundraising initiative with the launch of Inspiration4 – the world’s first all-civilian mission to orbit the Earth.​​ ALSAC also has an innovation advisory council composed of executives from top technology and media companies. “Setting up an innovation capability and driving adoption of it is hard,” Jacques acknowledges. “Some things work, some fail. We learn from all of it.” The bottom line: “Donors and constituents today want to be engaged differently. It’s critical to go where they are, speak to them on their terms, and encourage them to want to be part of your mission.”

“Scarcity mindset is a significant limiting factor, especially for smaller organizations.”
— Victoria Wheeler, Leadership Giving Officer, The Good Food Institute

There are 1.8 million impact organizations in the U.S., roughly 70% of which operate on less than $500,000 annually. With small teams and tight budgets, it’s easy for leadership and employees to take on what Victoria Wheeler, leadership giving officer at The Good Food Institute, calls the scarcity mindset.

“There are two issues at play,” she explains. “First is the perceived constraint in financial and time capacity, and the second is the internal culture. Organizations operating with a scarcity mindset make do with the status quo.” While perceived as the safe way to operate, Wheeler suggests this works against the organization’s interests.

“When we innovate, we have the ability to deepen donor relationships. But more importantly, we can take the burden off fundraisers and avoid burnout.” To her, innovation means finding and removing bottlenecks. “Spend a day following where your organization’s generalists spend their time, and you will find opportunities for operational improvements.”

“Judging success by old standards makes it hard to do anything new.”
— Kari Bodell, VP of Development Programs, Susan G. Komen

When thinking about innovation, “Did we minimize the cost of fundraising in year one?” is the wrong question to ask, says Kari Bodell, vice president of development programs at Susan G. Komen. When organizational leadership needs help finding new paths to success, she suggests looking to constituents for the innovation they want to see, and creating new programs and metrics based on them.

“Our biggest revenue sources have always been our event fundraising programs, such as Race For The Cure.” She says innovation was forced when the pandemic brought everything to a halt. “We took quick action to pivot in spring of 2020. Last summer, with virtual fatigue, we adjusted again.” Smart organizations will continue to be responsive and evolve. With such passionate constituents, Bodell and her team are taking time to uncover local grassroots innovation coming from their community. “Look at what your constituents are doing without you telling them, and let that bubble up, then replicate, proliferate, put a megaphone to it. We are looking to them to tell us what they expect from us in years to come.”

“Don’t change what’s working. Instead, use funding from your ‘cash cow’ to go and test new things.”
— Bonnie Caver. President, Reputation Lighthouse

“We think there will be five years of constant change,” says Bonnie Caver, president at Reputation Lighthouse. ‘With COVID-19, we’ve seen reductions of staff, especially in development teams. It’s clear that some of our tactics need to be changed to meet the demands of the times.”

Bringing experience from her consulting work, Caver suggests that impact organizations double down on the programs that drive the most revenue, and use some of those proceeds to test innovation. For organizations that don’t have a “cash cow,” she suggests we look to the for-profit sector for partnership. “There is massive growth in corporate social responsibility and cause-related marketing,” she says. Corporations are actively looking for partnerships that are aligned to their core offering and company culture.

“Innovation doesn’t mean changing everything you do. One small thing can trigger an impact that has positive effects across the organization.”
— Tal Frankfurt, Founder and CEO, Cloud for Good

For organizations that are just exploring new approaches, Tal Frankfurt, founder and CEO at Cloud for Good, reassures that it shouldn’t mean a complete overhaul. “We want to push the ecosystem to try new things,” he says. “For impact organizations, something simple like streamlining gift entry and donor acknowledgments can allow development teams to raise more funds in less time.”

Tal and the Cloud for Good team are helping their clients use the data they collect to make business decisions. A major component of this is helping them wean off legacy donor management solutions that have not evolved in decades and onto their first CRM. Others are embracing more advanced techniques, such as artificial intelligence, to forecast fundraising revenue. When it comes to modernization of the impact sector, Tal emphasizes “fast time-to-value is a critical first step to embracing innovation.”

Learn more about how your peers are innovating to ensure success now and in the future by downloading the State of Nonprofit Marketing Report.

About the Author

Michael Seiler, Community and Marketing Strategy,
Michael Seiler
Community and Marketing Strategy,
I am a social impact strategist, helping mission-driven organizations grow by leveraging new technology, cross-sector partnerships, and creative media campaigns. With a background in scaling and capacity-building in technology and startup acceleration, tech education, nonprofits, music industry, and events/festivals, I am passionate about creating big cultural and business-for-good movements to drive needed impact across our world’s most pressing challenges.