How Can Nonprofits Measure Success and Impact?

How do you know if your nonprofit is making an impact—if your mission is a success? The answer to this question affects everything about your organization, from day-to-day operations to the success of your fundraising efforts.

The National Council of Nonprofits alludes to five actions:

1. Identify what success looks like to you.
2. Make a plan to achieve that success.
3. Collect information along the way to evaluate performance.
4. Communicate what you’re learning.
5. Use lessons learned to continuously improve performance.

Together, these steps are known as “outcomes measurement,” “performance management,” or “evaluation.”

The Council further recommends reading Leap of Reason, a book that explains the responsibility nonprofits have to those who are served to be as effective as possible. Leap of Reason points out that measuring outcomes is about more than just attracting resources to your nonprofit; it’s about the mission. Only by evaluating performance can you know if you’re helping individuals, solving problems in the community, or protecting the environment, for example. In addition, you need to identify and communicate that impact to donors, who want to know their giving is making a positive difference.

Resources for evaluating performance & measuring outcomes

There are several ways to measure performance: engage in formal evaluation, monitor progress toward specific goals, and use feedback loops to learn what is or isn’t working. Whatever method makes the most sense for your nonprofit, the Council has identified several resources to help you effectively deliver your nonprofit’s program and services, as well as advance its mission.

Tools

• Data Playbook (Shusterman Foundation)
• Tip sheets and other free evaluation resources (Point K Learning Center – Innovation Network)
• Logic Model Development Guide (W.K. Kellogg Foundation)
• PerformWell offers tools, such as sample surveys and assessments, for human-service organizations to use to evaluate outcomes.
• Measuring Outcomes (U.S. Dept. of Health and Human Services, Compassion Capital Fund)
• Charting impact resources for GuideStar profiles

Resources

• Download the free ebooks Leap of Reason and Working Hard—and Working Well, and keep up with the latest thinking in outcomes evaluation, performance management, and evaluation via the Leap of Reason website.
• Just for small nonprofits: Small, But Mighty (Leap of Reason’s Performance Imperative for Small Nonprofits)
• What Matters: Investing in Results to Build Strong, Vibrant Communities (Nonprofit Finance Fund and Federal Reserve Bank of San Francisco)
• Getting Started with Data-Driven Decision Making (workbook from NTEN)
• Evaluating Advocacy (National Council of Nonprofits)
• Read about organizational self-assessments and the self-assessment process for a nonprofit board. (National Council of Nonprofits)

Measuring success with technology

A memorable line in the first chapter of Leap of Reason reads: “‘We’re lost, but at least we are making great time’ approach to nonprofit impact doesn’t work.” As George Weiner, founder and CEO of Whole Whale says, “This quote captures what many organizations with the best intentions may actually be doing: driving quickly toward an undefined destination. Driving quickly in the wrong direction, or to translate, errant hard work can quickly take you off course and worse be wasteful or even detrimental to the cause.”

So, know where you’re going. Once you’ve decided what success means to your nonprofit, rely on technology to help you evaluate performance and measure outcomes. Cloud-based fund accounting solutions such as Sage Intacct automates tracking and reporting of outcomes and performance metrics. Plus, point-and-click functionality makes reporting quick and easy, and dynamic dashboards provide real-time visibility so you know immediately how you’re doing. Start your journey to success by contacting the nonprofit financial management solution experts at JMT Consulting today.