Setting goals and benchmarking success through outcomes and impact continues to be a hot topic of conversation for nonprofits and their funders. Both seem to be in a quandary on how to measure success and impact. Individuals, foundations and corporate donors want to know “How is my donation impacting the work of a nonprofit through its mission?” If one measures success through impact then are they one in the same? Many nonprofits are measuring their impact by tracking programmatic statistics like the number of people served, families fed or housed, number of patients served, but are those statistics really a measure of the impact your organization is making?
Success in the for-profit world is measured by profit, a low staff turnover rate and high customer satisfaction to name a few. Nonprofits work hard to create strategic plans, development plans and Board development plans – all in an effort to attain goals and achieve their mission and vision. Measuring the success of an organization for many entails ensuring a strategic plan is implemented and does not sit on a shelf, carrying out a development plan to create revenue diversity and sustainability and implementing a Board development plan in an effort to guarentee diversity in makeup, attain 100% participation as part of the annual Board campaign and training Board members to feel comfortable fundraising.
In an article written by Richard Larkin in the July, 2013 issue of Nonprofit Quarterly “Using Outcomes to Measure Nonprofit Success” he talks about the measurement conundrum and the three types of data that might be used to measure a nonprofit’s success:
1. Inputs describe how much in the way of resources (both financial and non-financial, such as volunteer time, materials, equipment, etc.) was used to conduct an activity.
2. Outputs measure the activities conducted by the organization, such as the number of classes held, the number of students enrolled or graduated, the number of concerts performed and number of concertgoers attending, the number of members enrolled, and the like. The problem with this type of data is that, while it shows the quantity of program services provided, it does not indicate whether any real benefits resulted. Did the students learn anything? What was the quality of the concerts? How well were the members served?
3. Outcomes measure how much better off the organization’s clients, or society as a whole, are as a result of the organization’s activities. For example, by how much has the teenage pregnancy rate in a community been reduced through the efforts of a charity whose mission includes educating children about the undesirable results of getting pregnant so young?
The subject of success and impact fascinates me. Over the years I have followed giving trends of foundations and corporate foundations who continue to change the requirements of their grant applications to include sections on “What impact will this funding make?” and “How will it be measured?” The Carnegie Corporation of New York and other national foundations have done a great job implementing a short application, phone screenings and stepping up site visits - really the only way to see a mission in action and hopefully see and hear about the impact a funder’s dollars are making.
When I entered the world of fundraising, no one was talking about impact. Donors were making donations out of the goodness of their hearts and did not ask about how their donation made a difference. Funders are struggling with this topic just as nonprofits are and what I fear is that while nonprofits are working so hard to prove impact, the dollars are being designated too narrowly. Nonprofits need more foundations giving capacity building grants to help ensure impact is being made. Success and impact will not be achieved as readily with a staff that is stretched or the organization cannot afford to pay the light bill. Funders like the John Rex Foundation, Triangle Community Foundation and Cary Oil Foundation are all doing a great job offering capacity building grants here in the Triangle while other foundations are turning away from capacity grants and narrowing their focus of giving.
Marc J. Epstein, coauthor of the new book Measuring and Improving Social Impacts: A Guide for Nonprofits, Companies, and Impact Investors says “If an organization is unclear or does not communicate clarity on what they specifically want to achieve, it will be more difficult to measure whether their activities or other factors caused changes. So the clarity is critical for both achieving and measuring success. Once they have clarity on objectives, they can focus on whether the sequence of activities they plan to perform can logically be expected to create the desired impacts.”
The conversation around success and impact continues and it will be interesting to see who will become a model that others can look to. In many cases it takes time to show impact. Nonprofits need to be frank with funders and make sure their measures used to show success and impact are already in place so that new funding requiring certain measurements will not make for mission drift.
“Don’t judge each day by the harvest you reap but by the seeds you plant.” – Robert Louis Stevenson