When a funder donates to a Non-profit, it is understandable they will want to be reassured that their investment will achieve the result that they envisaged. But what counts as Non-profit success?
Funders will want to know that the Non-profit will make a measurable impact in the population they support with the budget that they have received. But how can donors evaluate whether or not a non-profit will deliver on its mission? How can they be reassured they are making the right investment decisions? Put another way, what really counts as Non-profit success?
Success in the business world is often measured by net profit – simple. Financial statements can be analysed, staff development and turnover can be measured and customer feedback collected and analysed. Measuring the success of a traditional business is straightforward and established but it is not the same for the world of non-profits! Here there are often no common measures of success or historical standards.
Many Non-profits use the statistics related to their own programs as measures but this can sometimes be difficult to understand or appreciated by even their own stakeholders. As well, not all the outputs created by non-profits relate to their programs, which means other measures must be used as additional parameters of success. For example, an obvious measure of success for a non-profit could be the number of attendees that join a planned online event, however, being present does not help non-profits in measuring more importantly whether the attendees have actually learned or retained the information that was provided. The latter measures of course are more valuable measures for donors!
This is what I now like to call, the success conundrum. There are 3 forms of data that can be considered when measuring a Non-profits success but only one of the below is really a truly useful measure:
Inputs: Inputs describe how much resources (financial and non-financial, this might include volunteer time, materials, etc) was used to conduct an activity.
Outputs: Outputs measure the activities achieved by an organisation. This could be for example be: the number of classes, webinars, or number of members. The key flaw with this data is that whilst it shows a quantitative measure, it does not show if there were any direct benefits. How do you know if the viewers of your webinar retained all or any of the information presented to them? If an event was exclusively set up for members, how well was it received by the members, and what benefits resulted?
Outcomes: Outcomes are a measure of how much better the non-profits clients, or society as a whole, are as a result of a non-profit’s activities. For example, this could be how much more a community or group is exercising through the efforts and motivation of a non-profit organisation. Or even trickier, how has the mental health of the community improved in relation to an intervention of a non-profit?
From these 3 types of data, only ‘outputs‘ are traditionally found in financial statements, however, true successes are measured not only by outcomes but by inputs. Inputs are rarely found in financial statements and at best, lost in the accompanying commentary.
When lacking output and outcome data, non-profits are often left with input data as a substitute for measuring their successes but this data can be unexacting and not always convincing for donors. Consider, input data for a hospital. This might include: how many staff hours are invested in treating patients. This input data will not show how many patients were actually cured of their condition or how quickly they were released home. What is also relevant is such data is historical and does not guarantee that this budget will be used in the same way in the future.
So after reading the above you might now be wondering ‘how will I show more credible and impactful outcomes to my funders?’ or ‘How do I know I’ve made an impact in my community!
The answer could be more straightforward than you think. Our tool ‘Katala’ has been specially developed for non-profits to help measure the impacts they make in their communities. It can be fully customisable to any non-profit allowing you to measure what really matters most to you and your funding partners.
If you think Katala might benefit you and organisation then please do not hesitate to contact us so we can discuss your specific needs. We also have a demo version of Katala available, so you can give it a try!