Does your nonprofit mission statement drive donations?
Does a nonprofit’s mission statement influence its fundraising efforts? New research conducted using data from Candid suggests that understanding this relationship can boost your nonprofit’s fundraising success.
An effective nonprofit mission statement draws supporters and donors to an organization. It gets them excited about helping to achieve that mission. As a fundraising professional and nonprofit consultant working on a doctorate degree in business, I was curious about just how much a mission statement matters when it comes to nonprofit fundraising. I decided to conduct two studies with my colleagues to get to answer this question. The results were dramatic, and they caused me to re-think how nonprofit mission statements relate to fundraising effectiveness.
I was familiar with using data from Candid to evaluate a nonprofit as a prospective employee or when considering giving a donation—I love digging into a 990! So, it was a natural place to turn to for data to use for this research. My colleagues and I randomly chose 200 U.S.-based nonprofits from the Candid’s GuideStar that serve the homeless population. Candid made it easy for us to search for nonprofits that serve the homeless and have tax statements on file. Then we used a random number generator to select which of those records would be pulled into our nonprofit mission statement studies’ sample.
After finding our 200 nonprofits, we created a spreadsheet where we recorded their names, websites, and each organization’s mission statement. We also downloaded their IRS Form 990s from 2016–2018 and added a number of financial metrics to the spreadsheet. That data was used for the following two studies, which examine the relationship between nonprofit mission statements and fundraising success.
Study 1: How sad is your nonprofit mission statement?
For our first project, How Sad is Your Mission Statement? The Moderating Effect of Mission Statement Polarity on Performance, we used a package in the statistical software R Studio to measure the emotional polarity of the 200 mission statements. R Studio is loaded with databases of words, and after we entered the 200 mission statements into the program, it looked at each word in each mission statement and gave us a numeric representation of how positive, negative, or neutral the nonprofit mission statement sounds. We then compared that emotional polarity score with the organizations’ financial data from the 990 tax documents.
Unexpectedly, we found that the results depended on an organization’s size. For nonprofits with gross revenue under $1 million, a more positively-worded mission statement was associated with more money raised per dollar spent. However, for larger organizations, the relationship was reversed.
The graph below compares the money spent on fundraising to the money earned and by nonprofit mission statement polarity for organizations that earn less than $1 million annually.
This second graph compares the money spent on fundraising to the money earned and by nonprofit mission statement polarity for organizations that earn more than $1 million annually.
Study 2: Who do nonprofits serve?
For our second project, Who Do Nonprofits Serve? An Exploratory Analysis of Nonprofit Mission Statements, we ran a different kind of analysis. We manually read each mission statement and identified what percentage corresponded to 10 codes based on prior research conducted on mission statements. These codes identified which words talked about beneficiaries, donors, products/services, market (geography), technology, organizational survival, philosophy, self-concept, public image, or employees.
We then applied a statistical method called exploratory factor analysis to uncover themes that might be present in the data set. This allowed us to understand patterns across organizations when it comes to the topics their mission statement addresses. Like in our first study, we could then take numerical information about the mission statements and compare them statistically to spending and earning.
The first thing that caught our eye was that a nonprofit mission statement that focuses on the organization
It was also apparent that nonprofit mission statements which focus on beneficiaries and on the organization’s philosophy were strongly related to higher revenue compared to expenses, which aligns with industry wisdom.
Advice for crafting your nonprofit mission statement
Two studies conducted with a sample of 200 of the thousands of nonprofits in America is hardly grounds to re-work your fundraising and communication strategies. As is always the case with scientific research, there are limitations to each study and a need for additional research to come. Marketing and fundraising include a lot of touchpoints, and certainly it is unlikely that donors decide whether to donate based solely on a nonprofit’s mission statement.
That said, this research provides some food for thought and potential advice for nonprofits. If your organization is drafting a new or revised mission statement, consider doing the following:
- Include your organization’s beneficiary and philosophy as central pieces of your nonprofit’s mission statement.
- If your organization’s annual budget is less than $1 million, make the tone of your mission statement as positive as possible. This should be a hopeful message focused on your philosophy and vision for the world you’re working to create.
- Conversely, if your organization’s annual budget is more than $1 million, consider putting more emphasis on the problem you’re working to solve and create a statement with language that skews slightly less positive in tone.
I hope this helps you when thinking about your mission statement and thank you to Candid for the data that let us conduct these studies.