Big Data Are Great—But Imperfect Metrics Work for Nonprofit Boards!

By Eugene Fram

Nonprofit boards need to expand their evaluations of nonprofit managers and their organizations adding more behavioral impacts * to their evaluations.
For example it might be the number of volunteers that have been trained by the organizations. But boards must go to the next level in the 21st century.
In the case of volunteers, they must seek to understand the impacts on those trained. They need, for instance, to understand how well these volunteers are assisting clients and how they are representing the nonprofit to the clients. The training is a process, but their relationships with clients are impacts.

Qualitative data must be developed to the next level, and the average nonprofit CEO will argue that he/she doesn’t have the staff or expertise to develop impact data. Engaging an outside organization to complete a simple project can cost thousands of dollars.

Yet funders are asking for these types of data because they know in the nonprofit environment that good program outcomes do not necessarily mean that the organization is creating impacts related to its mission. As one current analyst reported: ** Clear measure of performance and impact will be required by donors (in the coming years). Over and over donors are looking for performance metrics. They want proof that you are doing a good job with their money. …. They want efficiency and effectiveness. Some nonprofits are:
• Talking about their accomplishments in meaningful and measurable ways.
• Demonstrating clear results for the people and causes they serve.
• Turning their annual reports into “impact reports.”

Are Nonprofits In a “No Win” Situation?

They are not in such a situation if they are willing to use imperfect metrics to track progress and drive change. Most funders will accept such measurement if the organization shows it is trying to develop impact data and learning from their experiences over time. With the data, nonprofits can assess impacts on such honorable but vague goals such as “enhance quality of life,” “elevate artistic sensitivity,” or “community commitment.”

The following five-step process can be utilized: ***

• Agree on relevant outcomes: The board and management should agree that the metrics reflect organizational outcomes or impacts, not activities or efforts. Outcomes should focus on a desired change in the nonprofit’s universe rather than a set of process activities.
• Agree on approaches to evaluation: Many way to measure—personal interview, mail questionnaires, sampling client records, comparisons with other agencies, comparing imperfect data with similar types of national data.
• Agree on specific indicators: Develop behavioral outcomes desired. Example: Mentions in the local newspapers can be used as an indication of public presence.
• Agree on judgment rules: Board and management need to agree at the outset upon the outcome metrics the organization would like to achieve for each specific indicator that contributes to the desired mission related objective.
• Compare measurement outcome with judgment rule: Determine how many of he specific objectives have to assess whether or not the strategic objective has been achieved.

Who implements the process?

Few nonprofits will have the person-power or budget to implement the process, but there are other ways to accomplish it to develop impact results.

• Seek a local college class that will assist under the close direction of a professor or a knowledgeable volunteer professional.
• Engage a recently retired professional volunteer, provide him/her with an organizational title (e.g., Director of Measurement Projects) and seek funds from local foundation to cover costs.
• Ask a local service organization, like Rotary, to fund the project, as a demonstration for X number of years. A business organization might also agree to such funding.
• Seek a doctoral or masters student who might conduct the project in exchange for the ability to publish an article about it. Submit a funding grant to cover costs.

Without some ways of measuring their impact on a variety of stakeholders, nonprofits can easily degenerate into monitoring staff activities, mistaking efforts for outcomes and impacts. That danger is much greater than the danger of using imperfect metrics. Efforts involve process that can easily be measured, but an imperfect metric can be improved with experience over time to reveal impact.

* See– http://amzn.to/1OUV8J9

**http://boardassist.org/blog/top-10-fundraising-trends-and-predictions-for-2016/
*** https://nonprofitquarterly.org/2012/07/24/using-imperfect-metrics-well-tracking-progress-and-driving-change/

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