Start Simple with Nonprofit Performance Measurement

Written by Jeffrey Haguewood on 6/18/13

Measuring performance has become a hot topic in the nonprofit sector. Measurement is using data and information to benchmark and evaluate progress toward goal achievement. Measurement is important because it provides insight into what is working and what isn't working in your fundraising, finances, and programs. In addition, measurement is the stepping stone to helping your organization improve.

Measurement is a big topic. It can also be complex and overwhelming. The goal of this post is to simplify the measurement process and try to make it approachable for all organizations. Even if you feel that your organization is less sophisticated than others, not to worry because this post will help you "get in the game" with performance measurement.

Step 1: Start Small

Measurement doesn't have to be complex. In fact, I always recommend starting small. Start with what you know. What you know is usually the simplest and most relevant place to start. If you know how to count program participants by demographics, start there. If you know that you want to grow your donor database by 5% per year, start there. Start with a base set of goals and metrics that you can "wrap your head around." These simple measures build the foundation. I recommend starting small because understanding is the most critical. Understanding is the key to learning. You can generate all sorts of metrics, measurements, graphs, charts, and figures but they are irrelevant if you don't understand what's behind them. Therefore, start measurement by building a foundation with what you know.

Step 2: Measure

Second, start measuring. If you haven't started measuring your programs, fundraising, or finances, start as soon as possible. Programs, fundraising, and finances are core functions. As a result, they are functions that you can improve and innovate. Measure progress and benchmark that progress against your goals. Then start sharing. Communicate your measured progress to friends, family, co-workers, the community, and anyone that will listen. Through sharing, you will have "ah-ha" moments where you realize new things you want to measure or new ways to understand the information you are currently measuring. It is important to start measuring, stub your toe, run before you walk, sprint, fly then find your wings, and go! The sooner you start the sooner you can build capacity and expertise in measurement.

Step 3: Keep Going

Third, combine steps one and two to inform what you measure next. You don't have to be a data analyst or data management expert to be good at measuring. As you start with what you know, let your work illuminate the next things to measure. As you are measuring the increase in the number of donors who give each year, you may realize that you want to measure the number of donors you retain year over year. Or as you track demographics for program participants, you may want to discover which program participants achieve your program goals. Let your curiosity with measurement be your guide. You can direct your own path through measurement because you started with what you know. Leverage your experience to build capacity.

Simple Measurement Planning Tool

The above three steps are a great process to get started with measurement. However, it is important to be intentional with measurement. I recommend using a strategic tool to map and blueprint your measurement process. Use the five questions below as a starting point. Create a matrix (grid) that is five columns by three rows. Each question below is a column header for the five columns. You can add more rows if you need more rows for more goals. This written matrix will codify your measurement process and help you define the strategic direction needed to prove progress toward your goals.

  • What is your goal?
  • What metrics show success toward the goal (i.e. what to measure)?
  • What trends or information identify goal achievement (i.e. what to look for)?
  • Who should you share the outcome with?
  • What is the timeline for measurement?

Measurement is a good business practice and it is also becoming more and more prevalent in the nonprofit sector. Funders and donors alike are becoming more savvy and looking for organizations that measure their performance. Specifically, they are looking for organizations that measure financial, programmatic, and fundraising performance. However, critical mass in this movement hasn't occurred yet. That means organizations can jump into measurement and "ride the wave." Whether starting with measurement or modifying something existing, always start small and start simple. Start with what you know and build from there. As your organization becomes more experienced and skilled with measurement, you will uncover new opportunities and learn more about what drives performance at your organization.

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