How do you react to words like “evaluation” and “effectiveness?” Do you roll your eyes and mutter “here we go again” or get excited about demonstrating your nonprofit’s impact and learning how to enhance it?
Evaluating effectiveness matters. Not just because your largest donor wants to see outcomes or the report to the funder is due next week. Effectiveness is fulfilling your mission in ways that make a real difference. It’s your impact on and for those you serve. It’s personal: Effectiveness that produces meaningful impact is why you do what you do every day.
Many nonprofits evaluate their work as a response to external demand from funders, donors, policy makers, watchdogs and the media for measurable performance. As Bob Ottenhoff, GuideStar USA’s president and CEO, recently wrote in his blog, “the era of assumed virtue in the nonprofit sector is over…people want to know how their contributions are being used.”
Some nonprofit professionals think having evaluation results will increase giving. Myriad surveys do find that donors value impact, and evidence of impact is vital to fundraising. But the effect on giving is not always as direct or immediate as hoped, and it might not be the deciding factor in donors’ giving decisions.
In a Hope Consulting survey, 85 percent of donors said performance is very important. However, just 35 percent checked out nonprofits before giving. Only 3 percent decided which charity to support based on comparisons of effectiveness. Other studies, in contrast, indicate that assessment can influence giving. Research by Margaret Sloan, an assistant professor at Morehead State University in Morehead, Ky., found that if the BBB Wise Giving Alliance, in Arlington, Va., reported that a charity met all 20 of its standards, the result had a statistically significant effect on the contributions received.
Measurement should be as much an internal tool as an external tool. Evaluating effectiveness keeps your organization’s focus on your core mission. You get a better handle on whether your work is actually making a difference, and how you can do it better. If you’re not measuring your nonprofit’s work, you might become complacent, your organization might be underperforming and you might not realize it, or you could be inadvertently misallocating resources because you think you’re spending time and energy on things that have impact that actually don’t have it.
It’s easy, too, to conflate accountability and effectiveness, to assume that having accountability standards automatically makes organizations more effective, but that has not been proved. Many nonprofits — and the sector as a whole — have given more attention to accountability and transparency in the past decade as new resources provided by GuideStar, the BBB Wise Giving Alliance and others and sector-wide awareness efforts have increased the information available to the public. But this information doesn’t indicate whether the nonprofit is effective.
Accountability and effectiveness aren’t the same thing. Accountability is the obligation nonprofit professionals have to hold themselves and each other to high standards of fiscal and operational responsibility, ethics, transparency, and stewardship. It includes being accountable to donors, constituents served, the public and regulators. Effectiveness is making the greatest impact possible with the available resources to achieve the mission for the greater good of those served and society.
It is also misleading to overemphasize their separateness: Doing what’s effective must also be doing what’s right. Nonprofits must have processes in place to ensure that they are both accountable and effective.
It’s important to note that not everything nonprofits do can be easily measured. Nonprofit professionals need to help constituents and the public understand that there’s a difference between what charities measure — or what is measurable — and their contributions to the public good. Nonprofits tackle society’s longest-term, most intractable problems. Sometimes the most important programs charities undertake cannot be measured well, if at all. In other cases, the cost of a particular measurement is greater than the usefulness of the information it generates. Nonprofits should be prepared to explain why work that can’t be measured is nonetheless valuable, and should engage in meaningful evaluation of work that can be assessed.
Impact evaluation must be part of your organization’s culture, with buy-in and input from all parties. For many nonprofits, this is a cultural shift. It can be a challenge, in part because some staff might initially view evaluation efforts as forfeiting time that could be spent “on mission” serving constituents. Successfully integrating assessment efforts begins with a strong commitment from leadership to meaningful evaluation as a top priority and clear communication of how it directly improves the organization’s ability to fulfill its mission.
A study of how leaders of human services nonprofits perceive evaluation and build capacity for it in their organizations conducted by Salvatore Alaimo, an assistant professor at Grand Valley State University in Allendale, Mich., finds that the role of the executive director is crucial. Alaimo’s research shows that the executive director’s ability to successfully balance the “external pull” of evaluation as a means of satisfying external stakeholders, such as funders’ expectations, with the organization’s own “internal push” — its desire to evaluate for the sake of program effectiveness and to glean information that will further the nonprofit’s goals — is a key factor in achieving evaluation that can lead to improvement.
Approximately 67 percent of executive directors in Alaimo’s study said that their nonprofit uses evaluation information to alter its programs. Those who focused on the “internal push” reported that the “aha” moment for stakeholders comes when evaluation results are implemented and stakeholders realize how program evaluation can be used to improve the program, the organization’s work toward its mission and their individual work performance.
Your nonprofit’s mission and values should be the foundation for any evaluation. Start by identifying the most important things your organization does, then determine how best to measure them. Overcome the temptation to let low-priority but easily measured programs divert focus, time and funding from high-priority programs that are harder to assess. Recognize that different types of nonprofits or programs might call for different types of measurement. Be creative about what and how you measure. Qualitative measures could be as or more informative as quantitative measures for your particular needs.
Figuring out where to start to assess your nonprofit’s effectiveness and how to convey it in ways that will be meaningful to people outside the organization can seem overwhelming. An initiative called Charting Impact, scheduled to be released this spring, is designed to help nonprofits begin to document their effectiveness. Created by Independent Sector, GuideStar USA and the BBB Wise Giving Alliance, it provides a framework for nonprofits to consider their work and describe their impact.
Using the Charting Impact framework, organizations can ask themselves five questions involving their aims, their strategies and capabilities, the indicators of progress they use, and their actual progress. The common framework can be used by nonprofits of all types and sizes and by staff, board, stakeholders, donors, volunteers and others as well. If broadly adopted, the format can help organizations within the philanthropic sector better identify, communicate and collaborate in effective practices.
Building the capacity and culture for evaluation means integrating awareness of effectiveness throughout the organization, from including it in the budget and strategic plan to incorporating evaluation into job descriptions, Alaimo said. He recommends establishing a “culture of learning” that encourages ongoing feedback and adjustment for continual improvement.
Sharing the results — good or bad — with external stakeholders is a critical part of assessing impact. Tell your constituents and the public where you succeeded, where you didn’t, and what you’ve learned. Be transparent about shortcomings, seek their counsel, and share your plans for turning learning opportunities into program successes. Then follow up, and report the results of the changes you make.
Discussions of evaluation and effectiveness in the nonprofit sector are often fraught with anxiety and tension. Some of that can be addressed by recognizing that measurement ought not to be an end unto itself. Measurement is a way of assessing who we serve, how we serve them, and how we can do it better. Nonprofits that regularly evaluate their work and use what they learn to improve their effectiveness are better positioned to engage partners, volunteers, donors and other stakeholders more effectively. Most importantly, they serve their clients and constituents better and increase their impact. And impact is what it’s all about. NPT
Patrick M. Rooney is executive director of the Center on Philanthropy at Indiana University. His email is email@example.com. Art Taylor is president and chief executive officer of the BBB Wise Giving Alliance. His email is firstname.lastname@example.org.