“Super metrics” can win the day

Everyone, it might seem, wants to know how effectively your not-for-profit is fulfilling its mission and running its operation. Performance, or outcome, measurement — essentially a way to determine the impact of a program or activity — can supply interested onlookers with the proof they need to know you’re doing your job. Unlike traditional measures, such as number of clients served or amount of donations received, these “super metrics” allow an organization to assess whether a program is achieving its intended results.

Defining the terms

An “outcome” is generally described as a specific desirable result or the impact of a not-for-profit’s services. Outcome measures should gauge the level of accomplishment of a program goal in terms of changes in the lives of individuals, families, or the community at large. For example, a program designed to help return unemployed mothers to work by improving their job-seeking abilities might measure the number of job interview requests these women get compared to how many resumés they send out.

Bear in mind, though, that outcome measurement won’t prove that the results — good or bad — are due solely to your efforts.

An outcome measurement program requires an organization to identify appropriate outcomes and indicators of those outcomes. It also involves the collection of data relevant to the indicators (for example, by client surveys or interviews with program dropouts) and the analysis of that data. And, of course, the organization must take appropriate action based on those findings.

Deciding to measure results, anyway

Some not-for-profit s have no choice when it comes to outcome measurement — grant makers or other stakeholders might require it. But even organizations free of such demands should consider engaging in the process because of its many benefits.

Outcome measurement can act as a check for board members, staff, and volunteers that the not-for-profit is successfully working toward meeting its mission and goals. A side benefit: Measuring and reporting outcomes can shift the focus away from how resources are being allocated, such as the percentage of funds spent on “program-related activities.” Achieving sustainable success may include investing in such non-program-related activities as training, leadership development, and strengthening internal controls.

The results of outcome measurement should be shared with existing and potential stakeholders to show the impact of the organization’s programs and activities and, in turn, support marketing and fundraising efforts. The results also can prove helpful with short- and long-term planning — it becomes easier to identify effective programs and activities, as well as those that need improvement when you have hard metrics.

Understanding limitations

Outcomes need to be measured on an ongoing basis. Rather than examining client effect or other conditions only shortly after the completion of service, a not-for-profit also should return to evaluate the effects at some point down the road.

Additionally, you won’t be able to measure every important outcome immediately. Some outcomes take years to materialize. In such cases, a not-for-profit might be able to identify milestones to measure progress against as time goes by. So-called “soft” outcomes — for example, stronger relationships between teachers and parents — can be difficult to measure but still merit regular consideration.

Finally, while outcome measurement can be helpful for planning, organizations should remember that it’s backward-looking. Budgeting, policymaking, and other long-range planning decisions, on the other hand, are about the future, and conditions might be different then.

Prove it!

Stakeholders today often scrutinize a not-for-profit’s outcomes to see if it is performing the way it says it is. Super metrics provide a way to substantiate your impact.


Seek the services of a legal or tax adviser before implementing any ideas contained in this blog. 

GET IN TOUCH TODAY

Topics: Accounting Tips, Not-for-Profit, Audit