What are impact metrics and why do they matter?

impact metrics

Impact metrics are a set of measures that help us understand how our work is making an impact. They’re also important because they can be used to track progress over time, identify gaps in knowledge or services, and hold us accountable.

What are impact metrics?

Impact metrics are a set of measures that help you evaluate the effectiveness of your organization’s activities, programs, and projects. They allow you to determine whether or not a project has achieved its desired results.

Examples include the number of people reached by your organization’s programs (such as number served), number of volunteers who have participated over time (as a measure of engagement), the percentage increase in quality of life for your stakeholders, reductions in child mortality, etc.

Why do they matter?

Impact metrics help you understand what your organization is doing and how it is doing it. They help you focus on what is important to your organization. Impact metrics also help you understand what your organization needs to do differently in order to achieve its goals and improve its performance.

Donors and grantors demand that organizations use impact metrics. These metrics provide a way for donors, board members, staff, and other stakeholders to gauge whether their donations are delivering results according to agreed-upon objectives.

Differences in impact metrics

There are many types of impact metrics, but to keep things simple, we’ll focus on two types listed in Theory of Change: Outputs & Outcomes.

Outputs

  • Output metrics are used to measure whether or not your organization is progressing towards its goals and objectives.
    • Output metrics are always numeric.
      • Examples of output metrics: Habitat for Humanity
        • Housing projects completed (in specific geographic area) this month
        • Families placed in homes this week
    • Outputs are extremely important but only show a fraction of the work that your organization does. Most nonprofits have a hard time recording their output metrics because of inadequate software and reporting methods. The problem is that it is impossible to prove your value without output metrics and impossible to prove your real impact too.

Outcomes

  • Outcome metrics measure the actual results from your workOutcomes = Impact!

Outcome metrics are the most important element of your nonprofit. Outcomes are the real reason why funders donate to you, why your employees work with you, and why volunteers give you their most precious resource, their time, to your organization.

The problem is that most organizations struggle to report their outcomes (their impact). Too often, organizations are so focused on outputs they forget to measure their real impact.

  • Examples of outcome metrics: Habitat for Humanity
    • Quality of life improvement for families who now have safe housing
    • % reduction of homelessness in specific area
    • % reduction in at-risk homelessness in the specific geographic area

Outcome metrics help tell an overall story about what your organization accomplished. It also informs donors of the impact they are making alongside your nonprofit.

These metrics can be used to evaluate both short-term and long-term projects, as well as individual programs within the organization. They’re also helpful for determining what needs improvement within an organization’s structure so it can reach its goals more efficiently and effectively. If you are struggling with understanding how these metrics apply to your organization, don’t hesitate to reach out to our team of nonprofit consultants. Social Impact Solutions is here to help you prove your value and scale your impact. 

How to pick the right metrics

Before you pick your metrics, you need to think about what matters most to your mission. Then, consider the type of organization you are and how impact metrics will align with it:

  • What is the overall mission and vision for your nonprofit? 
    • Your metrics must be aligned with your mission.
  • Start by determining the outcomes you aim to achieve. 
    • Work closely with your stakeholders to ensure you are providing services they actually want and need. 
    • We strongly recommend conducting a needs assessment before overhauling your organization’s programs.

Impact metrics help clarify a nonprofit’s mission and vision for the future.

Impact metrics help clarify a nonprofit’s mission and vision for the future. A clear sense of your mission will help you identify the kinds of impact you want to have on society, and identifying those goals can help you decide which projects are most important to pursue—and how to allocate resources accordingly.

Knowing where you stand now lets you know if what you’re doing is working or not working, but it also helps guide future efforts so that they will be more effective in making an impact. Impact metrics also provide valuable information about how well your organization is performing relative to its peers: organizations with similar missions across different fields might be working toward similar goals, after all!

Conclusion

Ultimately, impact metrics are an essential part of any nonprofit organization. They can help clarify a nonprofit’s mission and vision for the future by providing direction for future projects and initiatives. The most important thing is to pick metrics that best reflect your organization’s values, goals, and priorities. It can take some time to find the right mix of metrics that works well with your organization, but once you do, it will be worth all the effort!

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