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Viewpoint: How to use data to measure the effectiveness of nonprofits

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By Patrick Callahan and Patrick Callihan

Over the past few years, a spotlight has been put on measuring the efficacy of a nonprofit and its mission. This has come about partly because of the ease of new tools in capturing and analyzing data. It is now expected, by most funders and supporters, for a nonprofit to have quantitative measures available to support the need being addressed as well as the effectiveness of the organization addressing the need. In fact, in recent times, for-profit organizations are being set up for the sole purpose of measuring an organization’s impact on society.

While data to manage constituents, funders and their finances are crucial, so is the data used to measure and evaluate the effectiveness of their programs, helping organizations gain insights into how to create more impact. Though revenue raised, number of social followers, constituents served, or the cost to run the organization are all important – these factors may not necessarily completely communicate, or measure, how impactful an organization is in line with their mission or amongst their peers. Ultimately, the question of “how successful is the nonprofit in achieving its mission” must be answered.

A recent survey of nonprofit donors by a leading research group found that overwhelmingly, to no one’s surprise, “Donors would support high-impact nonprofits if they could readily find information on organizations’ effectiveness.” By following a well-structured framework and focusing on key impact indicators, real progress can be made in measuring success. This is not only good for donors and the beneficiaries of nonprofit services, it’s good for the nonprofit industry as a whole as true comparisons amongst their peers can make all the groups better.

In Delaware, there is no shortage of organizations that exemplify the benefits of self-measurement. For these organizations, they start out with three core questions: What is the true aim of the organization? What quantitative data is being collected to track the progress of that mission? How does that data inform the operation of the organization on a daily basis?

It is not enough to simply count visitors to a museum or number of people served, it’s important to understand the enrichment of the visitor or the true wellness of those served. Measurements derived from pre and post awareness surveys of the subject matter being presented is a simple example. A well-known measurement for Rotary International is the group’s mission to eradicate polio from the planet. Until that number is zero, the Rotary will continue to invest and show progress. Every measure of every effort points to that final quantifiable outcome. The three questions should be invested in, adopted, and communicated as much as the mission itself. Before any execution is discussed (such as which technology is leveraged) the question being asked must be correct and the measurements actionable.

As an example, The Warehouse, a nonprofit community-based organization that is part of the REACH Riverside Project, needed a platform to not only provide a resource and reference for programs and events, but also to track teen engagement. This strategy was informed by the measures of the mission and every data element collected is for the purpose of meeting the vision and long-term outcomes assessment desired.

Though qualitative measures were not ignored completely, they were backed up by sound measurements confirming their outcomes. These metrics are actionable in that they allow a decision to be made or action to be taken based on the numbers.

Over the past few years, volumes have been written in on the correct process, methodology or framework to follow when structuring your measurement program. This is largely due to growing awareness on the subject, a spotlight on big data and technology, and the stepped-up efforts of donors and grant makers demanding proof that their investment is paying off. Though this can be cumbersome and time-consuming, it does make the industry as a whole better for it. The process does not need to be expensive or full of technology, but it does need to be self-reflective and communicative of the true mission of the organizations.

Besides an uncanny name resemblance, and over 10 years of friendship, Patrick Callahan, of CompassRed, and Patrick Callihan, of Tech Impact, share a common belief that data in the nonprofit sector has a critical role to play and that organizations need to embrace its role in every aspect of operations. Both CompassRed and Tech Impact have worked with numerous organizations in and outside of Delaware that have made progress in self-measurement.

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