The Critical Link Between Impact Measurement, Sustainable Funding, and Nonprofit Success
Creating long-lasting social change is not a simple task, but it is the core mission of countless non-profit organizations and their funders. The best organizations define their success by the measurable impact they are making in the lives of those they serve. In other words, they measure and communicate how individuals, families, and communities are better off as a result of their programs and services.
For-profit businesses have the best chance of success when they cater their products and services to the needs of their buyers. This is also true of the non-profit sector. But in your case, your “buyers” are the individuals who rely on your services and the funders who make it possible with their financial donations. The need for non-profit organizations to focus on improving outcomes for individuals and ensuring the organization has sustainable revenue is frequently referred to as the double bottom line: the revenue bottom line vs. the social-impact bottom line. Your non-profit organization must be financially stable in order to have the needed resources to fulfill your mission. At the same time, you must keep your mission at the center of everything you do as an organization because it is your very reason for existing.
The highest-performing non-profit organizations focus equally on both the social impact and revenue bottom line. To do this, they implement processes and technology that create a continuous loop where each bottom line helps fuel the success of the other. For example, the best way to improve your revenue bottom line is to start by improving your social-impact bottom line. Measuring and communicating your organization’s quantifiable social impact is a powerful way to engage stakeholders and funders. By demonstrating the degree to which you are changing the world, funders and other stakeholders will become more invested in your cause than ever before.
Impact Measurement 101: Data Is an Asset, Not a Burden
Many nonprofit leadership teams view tracking and reporting on key metrics as daunting and unnecessarily time-consuming. Though they are likely trying to conserve their limited resources, treating data as a burden overlooks its critical role in an organization’s future sustainability. Data is a positive asset, not a burden. For example, data will help you realize higher levels of operational effectiveness, saving your staff valuable time. Data will also help you understand how and why your programs work, as well as the connection between the services you provide and the outcomes you produce. The right metrics will also allow you to understand who you are serving and whether the services you provide are equitable. And by providing this data to funders and collaborators, you can demonstrate the success of your organization in implementing community-level change, which leads to increased funding.
But it’s not enough to measure any data; you need to measure the most important data.
Measuring Outcomes, Not Just Outputs
Your goal as a non-profit organization is to create a positive impact on individuals, communities, and vulnerable populations. Yet, according to Arnold Ventures’ Evidence-Based Policy team, many charitable organizations and programs achieve minimal to no impact. How can you tell if your organization is creating a positive impact?
The first step is understanding the different categories of information you should track and what each of them tells you. This is the basis of impact measurement and a great place for you to start if you are new to measuring social impact.
Outputs: What was done?
Outputs are likely the most commonly tracked metrics. How many job training sessions did your participants attend? How many hours of tutoring did your volunteers provide? How many meals were served to homeless veterans? This type of information is critical to understanding how your program is being run and what resources are being utilized. But outputs alone cannot provide insight into the true success of a program. You also need to measure quality and outcomes.
Quality: How well was it done?
You may know what is being done, but do you know how well? Did your programs fulfill their stated obligations? Did the recipients of the services feel valued and respected? Were their needs met? Were the services delivered in a way that was applicable to the individuals? The quality of your services reflects the commitment and professionalism of your organization.
Outcomes: How are program participants better off?
Many organizations believe they are defined by the number of services they provide. But what funders really want to know is how individuals and families are better off as a result of their investment. Are you able to demonstrate that your program is producing positive outcomes for your participants? What positive changes have occurred in their individual lives because of your programs? Do your impact measurement tools help you answer these questions? Is your impact data readily available? Nonprofits must work to deliver impactful, equitable, cost-effective, and sustainable solutions to complex social problems. Whether or not you achieve those goals is best measured by the outcomes of your efforts, not just the outputs. Knowing the answers to the above questions will help you progress in your impact measurement expertise.
The Relationship Between Funding and Impact Measurement
As anyone working in the nonprofit sector knows, financial resources are essential for providing any services. Yet, it feels like there is never enough money to go around. You may feel like the path from revenue to impact is a straightforward cause-and-effect relationship. You receive more funding, which then allows you to create more impact. But the truth is that revenue and impact are part of a dynamic cycle.
Financial resources allow you to provide services that are designed to create social impact. If you are able to prove that impact using real-time quantitative and qualitative data, you can use that information to solicit more funds from outcome-oriented funders and donors. Those investments then allow you to create more impact, and the cycle continues.
As you continue on this cycle, always remember to keep your funder’s goals in mind. Outcome-oriented funders are investors who seek social change rather than financial returns. Just as you have a mission as an organization, funders have their own motives and priorities for investing in nonprofits. Donors are often less formal in their requirements than government grants or private foundations, but they still have their own reasons for why they give.
Using the Right Tools To Measure Your Social Impact
Turning data into an asset requires using the right tools to empower your organization to increase your impact. Technology must be part of any successful strategy for becoming a data-driven organization. The old methods of data collection and analysis are burdensome and often inaccurate. Manually collecting data and then inputting and organizing it in spreadsheets takes valuable time that could be used elsewhere. It also opens up the process to higher risk of human error.
Even when the final reports are nearly perfect, manual collection and analysis take time. This means that once your data are organized and analyzed, you don’t know where you are right now. You know where you were days, weeks, or even months earlier.
Modern impact measurement software provides an effective and efficient way to track, measure, and share your organization’s positive impact. It also enables you to aggregate data by demographics to help ensure that you are creating equitable outcomes.
SureImpact is a user-friendly data collection, reporting, and analytics platform that connects nonprofits, funders, collaborators, grant managers, evaluators, and grantee staff with real-time impact data. SureImpact’s simple and collaborative case management and outcome tracking tools are designed to help you manage, measure, and communicate your social impact while also increasing data capacity for your team members and supporting a high-performing culture. Learn more about SureImpact in this quick SureImpact product tour.
Your non-profit organization exists to improve outcomes among the most vulnerable members of your community, and create long-lasting social change. Though often viewed as a burden, or a necessary evil, data has the potential to be one of your greatest assets as you work to achieve your nonprofit’s mission. With the right tools to streamline the process, quality data will help you better understand the people you serve, identify the strengths and weaknesses of your own programs, and increase your revenue as you prove your impact to funders and donors.