Nonprofit executives believe that outcomes measurement supports their top three priorities for 2019 — financial stability, staff turnover and donor retention — but effectively measuring the outcomes of dollars invested is only happening in 29 percent of nonprofits. That’s happening even though 76 percent of nonprofit executives identified increasing the effectiveness of outcomes measurement as the top priority for 2019.
When it comes to measurement, just 18 percent of nonprofits offer donors and funders access to real-time reports. The most popular methods for communicating value to funders and donors are annual reports (65 percent), emails (54 percent) and one-on-one meetings (39 percent).
Those are some of the results of a survey of nonprofit senior executives conducted by Oracle NetSuite, titled “Connecting Dollars to Outcomes.”
NetSuite worked with FINN Partners to survey 353 nonprofit senior decision-makers, manager level and above. These executives were surveyed regarding their experiences working in the nonprofit sector, general decision-making processes, and rationale in buying online products or services that serve their organization’s mission. Participants were based in the United States and surveyed this past April.
“Nonprofits are constantly required to do more with less, all while also proving to watchdog agencies and funders that they’re using donations effectively,” said Cheryl Gipson, nonprofit industry principal, Oracle NetSuite. “At a time when consumer trust in institutions of all types is dwindling, being able to effectively measure the outcome of all investments in real-time is increasingly important for the nonprofit industry.”
Nonprofit managers have consistently been challenged with measuring their impact, according to Lauren Woodman, CEO of NetHope, a nonprofit technology organization in McLean, Va., and a founding member of the Center for the Digital Nonprofit. “As these organizations work to expand their mission by acquiring more donors and increasing gift size, there’s never been a more important time to provide visibility into the results. While the majority of nonprofits noted they struggle measuring impact, this study shows the focus organizations are putting on investing in the resources that will allow them to change their approach to measurement,” said Woodman.
Operational issues and executive skepticism are the top obstacles to nonprofits embracing outcomes measurement, according to study respondents. The largest operational challenges are lack of people to manage measurement (37 percent), no system in place to measure outcomes (30 percent), and data silos (27 percent).
Executive skepticism is focused on the applicability of outcomes measurement, with 69 percent of respondents believing that it primarily rewards well resourced, larger nonprofits. Executives also believe that it oversimplifies social issues (60 percent) and is too short term focused (45 percent).
Despite executive skepticism, executives acknowledge that being able to effectively measure outcomes will support financial stability, staff turnover and donor retention. Some 84 percent of nonprofit executives surveyed believe outcomes measurement will increase their probability of successful fundraising. Slightly fewer than half (49 percent) believe it will increase recurring donations while 35 percent believe it will increase gift size.
More than half of executives (52 percent) believe it will help them tap into new donor demographics and 42 percent believe it will help meet funder requests.
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