Oct 2010 | The Importance of Metrics for Non Profits
by Meg Gammage – Tucker
Nonprofit professionals are regularly asked to justify the efficiency and effectiveness of their missions, programs, staff, and all other elements of their existence. The reason—we live in an era of substantial competition for limited financial and human resources; under the light of growing public attention and scrutiny; and greater demands from donors for evidence of organizational impact and importance.
How can nonprofits deal with the growing demands of volunteers, audiences, clients, and donors who need more justification to invest in us and our missions and programs? For the majority of the 1.6 million+ nonprofit institutions, the response has historically been to produce reports that generally outline the need for their “vital” services. The organization then lists the number and amount of gifts received.
It becomes somewhat circular as a justification process.
Our clients and those who attend my classes often indicate that those reports are the extent of what they can generate given the substantial limitations on their time and staff resources. Planning, modeling, evaluation, reports, impacts, outcomes—take too much time and they limit the energy available for running their organizations and developing and deepening donor relationships.
It is not enough, however. More justification and reports are necessary. Why? For the very reasons that you shy away from the concept:
- you have limited resources,
- your competition is growing, and
- you have to justify our existence, let alone any possibility of growth or greater impact or influence.
In other words, you simply need to work smarter, be better, and share the results of your successes (and, sometimes, your challenges).
How can we do this? Employ simple and effective models and metrics to:
- illustrate your effectiveness;
- gain the support and greater engagement of your volunteers and investors; and—certainly not last or least—
- justify your existence.
They do not need to be elaborate, but they do need to be meaningful, reflective, informative, and useful. Start simple and seek board input. Once you engage that audience and answer their questions, you can offer larger audiences more insights into your nonprofit’s efficiency and effectiveness.