Nonprofit Best Practices: How Do You Measure the Impact Your Nonprofit is Making?

nonprofit best practicesIs it feasible to measure the impact a nonprofit is making? Most often, impact is measured through output metrics such as the number of people who have been helped, the number of animals saved, or the number of members served. All of those have one thing in common: they are measuring by numbers. What if we didn’t measure by quantitative, but by qualitative measures? How much good was done through your nonprofit?

Two organizations, GuideStar and Impact Genome Project, are attempting to not only measure how many, but how much.

GuideStar recently launched GuideStar Platinum, a platform through which nonprofits can report both outcomes and impact. About 20% of the more than 12,000 metrics shared on the GuideStar platform represent impact-based outcomes, whereas the remaining 80% measured output.

Impact Genome Project is an initiative curated by Mission Measurement. It aggregates more than 10,000 pieces of research, seeking to identify patterns of what works and, by extension, what doesn’t work. This analysis can help nonprofits replicate what works by sharing the outcomes.

Is the Data Necessary?

Many nonprofit managers ask, “Why bother with the data?” Measuring through output metrics has been the standard method of reporting for many nonprofits over the years. It’s easier to chart how many members have signed up through your nonprofit, rather than trying to figure out the impact that your nonprofit has made on those specific members.

Data is used throughout many industries to measure the quantity of success for their organization. In medicine, for example, hospitals rely on both outcome data (the number of patients who attend a diabetic symposium or nutrition class) and on impact data (changes in community data such as the number of diabetics diagnosed in a year). By measuring these two metrics, it builds a powerful story that clearly shows not just the effort but the effect that the effort had on the community.

Data is a Need

Donors want to feel the nonprofit to which they are donating is being translucent with their funds. They want to see the data regarding how well the nonprofit is utilizing the funds they generously donated. That’s where the GuideStar program comes in to play. GuideStar is well-known in the nonprofit world as a good place to research nonprofits before agreeing to donate to them.

GuideStar data enables donors to:

  • Research potential nonprofits
  • Read their financial reports
  • Understand how the nonprofit’s money is spent to support and sustain the nonprofit’s mission
  • Review leaders, their salaries, and the money that was spent on overhead
  • Read answers from the nonprofit on specific initiatives
  • Contact the nonprofit directly

Nonprofits that provide quantitative as well as qualitative answers to questions regarding resources, such as GuideStar, provide complete transparency to their potential donors. This transparency helps to encourage donations.

Donors want to feel that their money is making a difference. For example, if they are donating money to a bird sanctuary, they want to know not just how many birds were rescued, but what impact the sanctuary has made on the environment and the local wildlife.

Data Is Appealing to Donors

As tempting as it may be to jump right into working for your nonprofit’s cause, it is still important to provide all the data. The need for data will continue to grow as donors are becoming pickier about the causes they want to support.

If you haven’t already started tracking the outcomes of your nonprofit, now is the time to start. It may take time to ramp up your databases, your software, or any other tools that can help you measure and report your nonprofit’s outcomes. You want to make sure you give your nonprofit the time it needs to start accumulating data.

It would be wise to sign up for programs, such as GuideStar or the Impact Genome Project, so you can be fully prepared for your future donors. Most donors want to investigate your organization’s credentials, your mission, your finances, and so much more. The sooner you can provide the data, the more appealing your nonprofit looks to potential donors.

RBP Methods

RBP Methods helps right-brained people navigate a left-brained world. We offer consulting and software that conforms to nonprofit best practices and are happy to discuss security and other needs with you. We offer software for nonprofit financial management, donor and grant management, and more to help your organization run smoothly. Contact us today or call 503-648-9051.

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