“That is what every nonprofit needs, but can’t afford.”
This was said to me by a nonprofit director after I described that my organization helps nonprofits measure and communicate their impact and value. She is not alone. Many nonprofit leaders incorrectly perceive efforts to achieve high-performance cultures and taking a data-driven approach as luxuries they cannot afford.
My new acquaintance was correct in believing that every nonprofit needs to be engaged in efforts to measure and manage to their outcomes. Organizations with high-performance cultures systematically collect and use a variety of data to manage operations and demonstrate their effectiveness. New research outlined in the book Impact & Excellence reveals that nonprofits with high-performance cultures are significantly more likely to report increases in positive press, funding, efficiency, staff morale, and organizational change. Despite these outstanding benefits of using data to drive communication and management of nonprofits, only 24 percent of the social sector reported achieving these important cultures. Lack of funding and resources are often cited as the main obstacles.
There is good news, though. This perception is a myth! No correlation exists between an organization that is successfully using data to demonstrate effectiveness and its budget and size. In other words, there are several small nonprofits excelling in using performance measures while there are very large departments not using or collecting vital data.
How nonprofits demonstrate and communicate effectiveness are predictors of organizational success. Demonstrating impact is becoming increasingly more important as funders and donors have become more interested in paying for outcomes. Nonprofits that excel because of their data-driven practices go beyond using performance measures and outcomes data as an external reporting tool. They have the right performance measures, organizational structures, and leadership in place to systematically use data to manage programs, make improvements, and demonstrate their unique impact and value.
Greatness starts with the commitment of the board and leadership to move from merely collecting data, to achieving excellence with their information. Following are three distinct features that separate the “great” from the “good enough.”
1. Defining Success: Great organizations measure success based on the distinct impact they are making and the effectiveness of their services relative to their resources. In addition to measuring their number of services, they also should measure outcomes — the extent their programs and services have changed lives and circumstances for their participants, stakeholders, and communities. For example, this means having meaningful data to show your programs improve knowledge, attitudes, behaviors, and economic conditions.
2. Leadership: Great nonprofit leaders never take their eyes off their mission. They lead with humility and passion and do whatever it takes (ethically) to fully realize their mission. They align their measures with this mission. Great leaders use these measures to make course corrections when results are less desirable. Once the data has been analyzed, great leaders celebrate success when desired targets are met.
3. Communication: In order for performance measures to be a value for nonprofits or any organization, they must drive change or action by both internal and external stakeholders (e.g., staff, funders, and volunteers). Great organizations consistently use their performance measures to make adjustments to operations and programming to seek greater results. For example, if a nonprofit notices that success rates are declining or increased new behaviors are stagnant, they will use the data to investigate the reasons for these trends. They use this information to justify new programs or training. Performance and outcome data are shared publicly with donors and elected officials to help increase the support and budgets of their programs and services.
Great nonprofits will let go of the excuse that performance and outcome measurement processes are unnecessary or too costly. Instead they ask, “How can we achieve our desired impact and excellence?” Measurement is an essential tool that will help nonprofit leaders achieve greater community impact and positive public perception, regardless of the organization’s size and budget.
The first step toward achieving excellence is to create and use success measures. Once this commitment is made, nonprofit leaders can find the time or resources needed to successfully engage in measurement activities. Those who are successful know that high performance is achievable, can fit within their budget, can be done with their own staff, and will lead to positive results!
Image credit: FutUndBeidl