Almost all the not-for-profit agencies I know stay pretty busy providing service to people who need it.  Any other time there is, is probably spent “putting out fires”.  When time, money, and person-power are short, it’s natural to prioritize what’s urgent and right in your face.

It’s very important (not urgent, but important), however, to take the time to figure out how to measure your impact.  What difference are you making to your clients, the community, and the public?  And your staff and volunteers as well?  And how do you know you’re making that difference?  Foundations, donors, and boards all want to be able to measure your success in ways that make it easy to see increasing impact.  They want the warm feelings as well, but data to back them up is crucial for getting grants and donations.

Lots of impact is intangible, resists measurement.  But applying creative thought and soliciting varied perspectives can help you figure out the best way to measure it.  Don’t think just of things you can count, simple “outputs”.   Think also of degrees of difference, before-service and after-service feelings and knowledge, changed behaviors, and significant next steps that you might be helping your clients attain. 

Finding the right indicators to measure success is crucial, because whatever you measure is going to gradually become what your organization makes a priority.  If you stress quantity and don’t measure quality, quality is bound to go down.  If you focus on near-term indicators and ignore what long-term success looks like, you may find clients coming back to your door after you thought you had helped them.  At the same time, it’s not great to be so inattentive to quantity that masses of people are suffering on your waiting list while you enjoy quality with just a few.  Impact is about both quantity and quality.

I found an old paper by Hauser and Katz that discusses metrics (i.e., what to measure and how) in the corporate environment, and some of it is not very clear to those of us without MBA’s, but if you wade through there are some interesting insights you might apply to a nonprofit.  There are probably much better sources out there (try www.whatworks.org), but I liked how these authors made their points.  Replace the idea of “profit” with “impact” and “increased pay and bonuses” with “recognition”.

The link is simple.  If a firm measures a, b, and c, but not x, y, and z, then managers begin to pay more attention to a, b, and c.  Soon those managers who do well on a, b, and c are promoted or given more responsibilities.  Increased pay and bonuses follow.  Recognizing these rewards, managers start asking their employees to make decisions and take actions that improve the metrics.  (Often, they don’t even need to ask!)  Soon the entire organization is focused on ways to improve the metrics.  The firm gains core strengths in producing a, b, and c.  The firm becomes what it measures.
 
If maximizing a, b, and c leads to long-term profit, the metrics are effective.  If a, b, and c lead to counterproductive decisions and actions, then the metrics have failed (Hauser & Katz, 1998, p. 1).

 

 

The authors describe seven pitfalls that lead to counter-productive metrics.  Let me know what you think.

 

Advertisement