Measuring impact—focusing resources
Joan M. Renner, CPA, CGMA, Director 501(c)(fit!)
Last week we discussed how the new tax law will affect your donors. Although donors who itemize can still deduct their contributions to your organization, fewer taxpayers will itemize. Many will take the standard deduction no matter what they give to charity. As we begin 2018, you may be wondering whether your donors will continue to give at the same level this year, and whether you’ll be making some tough choices.
How do you prepare for this kind of uncertainty? If your donations decrease, how will you make choices that preserve the most mission-related impact?
One thing that will help is focus. With clear focus, you can allocate resources to those things you can do best, that are needed the most. How do you know which of your programs have the greatest mission-related impact? Measure it.
You probably wouldn’t go on a New Year’s diet without a scale or a favorite pair of jeans to measure your progress. How would you know your program was working? How would you know what to change? Measuring your nonprofit’s success is no different.
A survey of more than 3,000 nonprofit leaders and donors just reported that “half of nonprofits struggle with impact evaluation”. * The authors urged nonprofits not only to measure their impact, but also to use the data to inform their strategic decisions.
Here’s a success story: A few years ago there was a YWCA that was struggling to fund its residential housing program. Even with full occupancy and a waiting list, the program’s funding was drying up. Continuing business as usual threatened to pull the organization under.
The organization’s leaders reviewed some measurable data, and found that the average stay in their housing program was 60 days. Based on this length of stay, it seemed that they weren’t running a residential housing program after all. Their program was serving as emergency housing.
The leaders knew that there was already a successful emergency housing program in town, providing resident support and counseling. Rather than duplicating those services, the YWCA decided to close the under-funded residential program, and partner with their neighbor, allowing them to focus on their own unique programs for women’s health and wellness.
Impact measurements helped produce a win-win for everyone.
What can we learn?
Don’t expect perfection. There’s a reason why half of nonprofits struggle with impact evaluation. Impact measurements are not perfect and they’re not easy. While the best measurements link participation in your program to favorable outcomes, any data is better than none.
Consider these steps:
- Identify what outcomes are most important to you. Older adults retaining independence? High school students going to college? Enriched lives for at-risk children?
- Determine what it looks like when those outcomes are reached. Continued participation in your program? College admission? Staying in school?
- Identify your opportunities to collect those observations. Participant data? Participant surveys? Personal stories?
- Summarize and report it what you find. Will you consider your current data as a baseline? How often can you pull it together for a report? What data-collection software can you use to streamline your procedures?
- Use it to sharpen your focus. Report your results to management, committees and the Board. Compare results to previous periods. Set goals for future periods. Evaluate trends and incorporate your evaluations into your organization’s future strategies.
- Fine tune your procedures as you learn.
Join our 501(c)(fit!) community for free weekly FIT! TIPS. so you won’t miss another FIT! TIP.
Learn more about our 501(c)(fit!) financial leadership training seminars for emerging nonprofit professionals.
*Yes it’s true, per The Stanford Survey on Leadership and Management in the Nonprofit Sector, by William F. Meehan, III and Kim Starkey Jonker, published in November 2017, in collaboration with the Center for Social Innovation at Stanford Graduate School of Business, the Stanford Center on Philanthropy and Civil Society, Stanford Social Innovation Review, GuideStar, and BoardSource.
©2017 501(c)(fit!) All Rights Reserved.