How Do Nonprofits Measure Success and Impact?
In the business world, success is typically measured by bottom line financial results. For example, a company is deemed “successful” if it turns a meaningful profit. Shareholders, the executive team and employees are all rewarded – even celebrated – when this happens.
However, in the nonprofit world, success isn’t defined in such a cut and dry way. Yes, there are ways to monetarily measure success. For example, you might measure success by the amount of money you raised last year and/or the total number of donors who gave to your organization, or increased their donation, for example.
However, I believe the real measure of success for a nonprofit comes with how the organization moved the needle toward achieving its vision.
For example, an organization’s vision might be to stamp out homelessness in a specific city. Success should then be measured not just by how many meals the organization provided or how many winter coats you handed out; rather, it should be measured against its vision. You can do this by comparing the number of homeless people in the year prior to the current year. Did your organization contribute to the decrease in homelessness in that city? Why or why not?
Sure, it might seem far-fetched to think you can stamp out homelessness in a specific city, but the truth is that every organization has a vision that is, well, visionary. The belief that something so “out there” CAN happen is the foundation that moves people to dedicate their hearts and souls to an organization.
As you look back at the year and start to quantify your success, remember to not only count how many meals you provided and how many people you helped, but also look at how much closer you came to achieving your vision – or at least moving the needle in the right direction.
Once you truly measure your success against your vision, then you can start to build the framework for the next year. For example, if the homeless population dropped by 2%, you might be mindful that your work is helping move the needle in the right direction. However, if the homeless population rose or was stagnant, perhaps feeding homeless isn’t the way for you to achieve your vision and you could look to supplement your current efforts with other efforts such as job placement or life coaching services, etc. You can then set fundraising goals for the next year knowing you need to do so much more to create lasting change.
Furthermore, I believe that nonprofits shouldn’t feel pressured into spinning their efforts into a home run, banner year like corporations often do (usually under the pressure of having to meet Wall Street expectations). If the homeless population hasn’t changed as a result of your efforts, that only means you try something different or do more. You can then use this information to rally your base of supporters and encourage them to help you even more in the coming year. (“Hey donors, we need to go above and beyond our initial efforts and want to add XYZ. Can you help?”)
If your organization’s efforts did move the needle in the right direction this year, this, too, can motivate your base to help you do what you did last year on an even larger scale (“Hey donors, this is working, let’s do even more of it.”). Of course, such work is going to take more manpower and more money.
Remember, your nonprofit exists so that is can make a positive impact on the world. Measure your success against your vision and don’t be pressured to meet some artificial measure of success imposed by a corporate world obsessed with bottom line results. Stay true to your vision to change the world – and use that to communicate your success and motivate your donors and staff in the year to come.