In an age when nonprofits face intense scrutiny by everyone from donors to people while hoping to remain relevant, organizations rely on a variety of measurements to keep both outsiders and insiders happy.
Outcomes metrics are necessary for funding, accountability, stewardship, reputation, credibility, growth and impact. The pressure to prove credibility, however, can lead organizational leaders to try to document every number that comes down the pike, resulting in a huge, incomprehensible blob of numbers.
Speaking during the American Institute of CPAs (AICPA) Not-for-Profit-Industry Conference, Joan Benson and MaryFrances Pidgeon outlined the metrics that matter for nonprofits. It isn’t just about gathering numbers, they said, but the right ones.
Their first piece of advice: Link metrics to mission. They used the Nature Conservancy as an example of using metrics the right way.
- Mission and Vision: Impact Measures — Long-term mission and objectives. For the Nature Conservancy, this would include biodiversity health and threat abatement.
- Goals and Strategies: Activity Measures — Progress toward goals and program implementation. Examples: projects launched and sites protected.
- Tactics and Activities: Capacity Measures — Progress at all levels of the organization, enabling execution. Examples include memberships, public funding, growth in financial resources, market share.