Nonprofits are vital in providing infrastructure and support to those in need and where service gaps exist. Running a non profit effectively and finding a non profit to associate with as a volunteer or financial supporter can be difficult. To help with this, let’s look at techniques for measuring non-profit Impact.
According to expert Jonathan Craig Rich, formerly of National Securities in New York, the right techniques for gathering information are crucial for understanding how impactful the efforts of non-profit organizations are. These begin with building a model with a logical structure, understanding why measurements are important, and collecting the applicable financial and operating data.
In this article, we’ll cover the top 3 techniques for measuring a non-profit’s impact. By the conclusion, it will be clear that the financial state of any given non-profit is a great indicator for the effective impact of that organization. With such a lofty goal, let’s begin learning right away.
Techniques
Let’s begin by examining non-profit impact in the form of three different techniques.
- Build a logically structured model
- Understand why each measurement is important
- Collect all applicable data
Each of these three techniques tend to work in tandem as a beneficial whole for non-profit budgets and organizing individuals alike. Let’s examine all three in greater detail below:
1. Build A Logically-Structured Model
It is easy to end up measuring all the wrong things when trying to determine impact. This step begins with measuring the logical outcome of an activity in terms of meaningful change rather than measuring the efficiency or structure of the activity itself.
Look at the numbers that directly relate to the goals put in place during each activity. For example, if the goal was to lease out living areas, count how many living areas were leased. Calculate participation and other tangible numbers for a logically-structured model of information.
2. Understand Why Each Measurement Is Important
The “why” behind what is being accomplished is critically important when lining up techniques to measure impact. Measure both the information and outcome from the activity, as well as the processes and execution of it.
Knowing the reasons and causes behind the collected information helps to contextualize the information itself while keeping the focus on real impact.
3. Collect All Applicable Data
Finally, bringing it all together by collecting the data that truly applies is the most important technique. The finances of a nonprofit are critical not only to its survival, but to the length and breadth of it’s impact as well.
Make sure the applicable measurements include the actual amount spent on the programs or services versus administrative costs to implement and provide, are there audits and governance practices in place to oversee spending and account for them, specific details around services provided (ie how many hours of instruction, meals served, people impacted, etc.) and the actual dollar amounts of the overall budget and sources from fundraising, events, donations and other means.
In Conclusion
There are many benefits to measuring the impact of a non-profit organization and its efforts. However, these benefits cannot be seen without utilizing techniques to carefully gather information and understand it accurately.
The first technique to put into place is planning. We discussed how building a logically structured model is essential to the foundation of an impact’s measurements. Secondly, one of the main techniques needed for understanding a non-profit’s revenue and where the money is going is to first understand how it applies through measurements.
Finally, we examined the best ways to collect applicable data once the importance of measurements and logical structure were in place. By putting these techniques into practice, a non-profit organization can benefit through the encouragement of knowing their impact!
