Tracking nonprofit impact critical

Nonprofits must do a better job measuring their performance.

As Jason Saul of Mission Measurement said in presenting a recent Philanthropy Journal webinar, effective measurement can help nonprofits advance their mission, compete for funding in an increasingly competitive charitable marketplace, and improve the way they manage their organizations and serve people.

Rather than simply counting the output of their programs or the number of clients they serve, Saul says, nonprofits should be measuring the outcomes or impact of those programs.

That may sound like a fine distinction, but it is crucial, showing funders and donors how nonprofits actually improved the lives of people by addressing their critical needs, improving their skills or changing the way they live and work.

And measuring impact does not need to be complicated, Saul says.

He suggests a simple exercise that applies a “success equation” based on an organization’s mission statement.

A mission statement typically states the impact an organization wants to achieve, and the intermediate outcomes needed to achieve that impact.

Saul suggests that nonprofits, working with their boards, staff, donors and other constituents, define the ultimate impact they want to have and then spell out three outcomes they want to accomplish.

Nonprofits also should establish one or more “performance measures” they can use to gauge progress in achieving each outcome.

And the process can drive continuous improvement: While a nonprofit’s board “owns” the overall success equation, Saul says, each department or program manager owns an outcome.

And nonprofits should communicate the measures internally and externally, and integrate them into their finance, human-resources, fundraising and communications operations.

“Measurement is a culture, not a project,” Saul says, and nonprofits should work on measurement within their existing business processes, keep it simple at first, and make it positive, not punitive.

Ultimately, Saul says, nonprofits can keep an online “dashboard” that tracks a broad range of measures, including detailed metrics on a series of outcomes to gauge program performance, community engagement, financial sustainability and management effectiveness.

By engaging their entire organization in a culture of measurement, using simple and practical tools to track progress, and sharing results within the organization and with constituents, partners, funders and the public, nonprofits can better equip themselves to advance their mission, secure the resources they need, and improve the way they operate and serve clients.