How do you know if your nonprofit is making a difference?
Impact is the difference your nonprofit makes: There's the work you do, and the results that flow from it. More and more nonprofits, grantmakers, and government partners are focusing on outcomes, rather than "outputs."
The National Council of Nonprofits and its state association network encourage nonprofits to embrace a culture that supports evaluating the difference your nonprofit is making. This requires first identifying "what does success look like?" Then, you need to make a plan that will get you there and collect information along the way to evaluate whether your nonprofit is actually getting closer to success.
Finally, it's important also to communicate what you are discovering, and use those lessons to continuously improve performance. All of this is referred to variously as, "outcomes measurement," "performance management," or simply, "evaluation."
If you are just becoming familiar with this topic we recommend a powerful and easy-to-read book, Leap of Reason, that explains how nonprofits and grantmakers (and governments) have a responsibility to the individuals and communities we all serve to be as effective as possible. The authors go on to stress that in an environment of increasingly limited resources, those nonprofits that can demonstrate that they are truly making an impact will be the ones most likely to attract resources and talent, and therefore be most sustainable.
As Leap of Reason points out, measuring outcomes is not just about attracting resources to your nonprofit; it's about the mission. Your nonprofit will only know that it is indeed helping individuals, solving problems in communities, protecting the environment, [insert your nonprofit’s mission here], if it is evaluating its performance. Identifying and communicating impact are also important activities for any charitable nonprofit since donors understandably want to know that their contributions are making a positive difference.
Evaluating Performance, Measuring Outcomes
Whether your nonprofit engages in formal “evaluation,” monitors progress towards specific goals, or uses feedback loops to learn what's working and what's not, each of these activities is a type of “performance measurement.” What makes the most sense for your nonprofit?
Here are some resources to help your organization along an intentional path that we hope will lead to the most effective delivery of your nonprofit's programs and services and advancement of its mission.
Related Insights and Analysis
- Download the free ebooks Leap of Reason and Working Hard and Working Well and keep up with the latest thinking in outcomes evaluation, performance management, and evaluation via the Leap of Reason website.
- Data Playbook (Shusterman Foundation)
- Outcomes matter (Nonprofit Finance Fund and Federal Reserve Bank of San Francisco)
- State of Evaluation: Evaluation Capacity and Practice in the Nonprofit Sector (Innovation Network)
- The State of Evaluation in Colorado's Nonprofit Sector (The Colorado Trust, CO Nonprofits, Community Resource Center)
Disclaimer: Information on this website is provided for informational purposes only and is neither intended to be nor should be construed as legal, accounting, tax, investment, or financial advice. Please consult a professional (attorney, accountant, tax advisor) for the latest and most accurate information. The National Council of Nonprofits makes no representations or warranties as to the accuracy or timeliness of the information contained herein.