imperfect metrics

Are Nonprofit Boards Capable Evaluating Themselves?

Are Nonprofit Boards Capable of Evaluating Themselves?

By: Eugene Fram       

A 2025 survey of business boards by PWC (Accounting/Consulting Firm) yielded the following results;

  • More than half (55%%) of board members think someone on their board should be replaced.
  • Most board members (78%) do not believe their boards’ asssessment process provides a complete picture of overall board performance.
  • A majority (51%) say their boards are insufficiently invested in the investment process.
  • About half (45%) seek addiktional education or training on key topics.*

Given that many of these business boards have the financial power to employ legal counsel or consultants to conduct a rigorous impartial evaluation, what can a nonprofit board, with limited financial resources, do to make sure that the board and its members are being fairly evaluated to drive change?

Ask The Tough Questions:  No matter what process is used in the evaluation, the board has to address some difficult common questions.  These include:

  • To what extent are board members overly compliant with the wishes of the board chair or CEO? Having been a veteran nonprofit board member or a consultant with dozens of others, I find there is a tendency for nonprofit board members to “go along to get along.” As a result, the board tends to be compliant with the wishes of the board chair, the CEO or an influential director. Rigorous/civil dissent is not part of meeting discussions.
  • Leadership selection discussions are rarely a priority. Often, through lack of interest or the organization’s formal culture, the board has little contact with staff members below the senior management level and little interest in assessing where future management strength can be developed.
  • I have yet to encounter a nonprofit board that is willing to discuss its effectiveness in terms of overall strengths or weaknesses. Critical tough questions are: Are all members contributing at a minimum “get or give” level?  Especially between meetings, how can board’s internal communications be improved? To what extent does the board become involved in micromanagement or perpetuate it long after the board has outgrown the startup stage?   For example, I observed one mature board make a decision about the timing of fundraising events and then spend the next hour brainstorming the types of events that might be developed—clearly a management responsibility to investigate.
  • The strategic strength of the board. Nonprofit board member backgrounds should be aligned with the emerging needs of the nonprofit.  Examples, if fund development is going to be a priority, a person with event planning experiences should be recruited. If the reserve fund return is not being maximized, a person with a financial background, not a CPA, is required.
  • The ineffective nonprofit director. It is the most vexing problem that boards face. This person’s behavior can range from one who monopolizes discussions to the person who attends meetings but never makes any financial or other types of contributions. Some boards claim that they can approach the problem by asking each director to assess the effectiveness of his/h colleagues, but in decades of nonprofit governance experiences, I have never encountered a board that has had this process in place.

Review Current Practices:  If the board has never been self-evaluated, to do a proper self evaluation, these steps are important:

  • Develop a questionnaire to be completed by all board members.  It should be carefully crafted to determine how the board as a group and each individual board member contributes to enhancing the organization’s mission.
  • The committee assigned to the project should seek the assistance of someone with professional evaluation competence to guide the work.  Hopefully he/s will accept the assignment on a pro bono basis. This also can be an interesting project for a small group of graduate students, guided by a knowledgeable professor.  Because of the confidential nature of the material, no more than three students should be involved.
  • Develop the processes for dissemination, confidentiality, collation of materials and organization of survey information. Again, engage a professional to assist with these efforts.

Traditionally, nonprofits use a simple questionnaire to evaluate the organization and the CEO. Their development processes vary widely, and their usefulness often can be questioned when not all board members take the time to thoughtfully respond to the survey or when it is developed by committee. However, board self-evaluation needs to be completed with professional assistance, and the results reported with diplomatic care to drive positive board change.

*https://www.pwc.com/us/en/services/governance-insights-center/library/assets/pwc-2025-annual-corporate-directors-survey.pdf

Reversing Traditional Nonprofit Board Barriers

Reversing Traditional Nonprofit Board Barriers

By: Eugene Fram         

Clearly the purpose of a nonprofit board is to serve the constituency that establishes it—be it community, industry, governmental unit and the like. That said, the “how” to best deliver that service is often not so clear. An executive committee, for example, can overstep its authority by assuming powers beyond its scope of responsibility. I encountered this in one executive committee when the group developed a strategic plan in an interim period where there was no permanent ED. The board then refused to share it with the incoming executive. In another instance, an executive committee took it upon itself to appoint members of the audit committee—including outsiders who were unknown to the majority on the board.

The fuzziness of boundaries and lack of defined authority call for an active nonprofit system of checks and balances. For a variety of reasons this is difficult for nonprofits to achieve:

  • A typical nonprofit board member is often recruited from a pool of friends, relatives and colleagues, and will serve, on a median average, for four to six years.   This makes it difficult to achieve rigorous debate at meetings (why risk conflicts with board colleagues?). Directors also are not as eager to thoughtfully plan for change beyond the limits of their terms. Besides discussing day-to-day issues, the board needs to make sure that immediate gains do not hamper long-term sustainability.
  • The culture of micromanagement is frequently a remnant from the early startup years when board members may have performed operational duties. In some boards it becomes embedded in the culture and continues to pervade the governmental environment, allowing the board and executive committee to involve themselves in areas that should be delegated to management.
  • The executive team is a broad partnership of peers –board members, those appointed to the executive committee and the CEO. The executive committee is legally responsible to act for the board between meetings–the board must ratify its decisions. But unchecked, the executive committee can assume dictatorial powers whose conclusions must be rubber-stamped by the board.

Mitigating Oversight Barriers: There is often little individual board members can do to change the course when the DNA has become embedded in the organization. The tradition of micromanagement, for example, is hard to reverse, especially when the culture is continually supported by a succession of like-minded board chairs and CEOs. No single board member can move these barriers given the brevity of the board terms. But there are a few initiatives that three or four directors, working in tandem, can take to move the organization into a high-performance category.

  • Meetings: At the top of every meeting agenda there needs to be listed at least one policy or strategy topic. When the board discussion begins to wander, the chair should remind the group that they are encroaching on an area that is management’s responsibility. One board I observed wasted an hour’s time because the chair had failed to intercept the conversation in this manner. Another board agreed to change its timing of a major development event, then spent valuable meeting time suggesting formats for the new event—clearly a management responsibility to develop.
  • “New Age” Board Members: While millennial directors may be causing consternation in some legacy-bound nonprofit and business organizations, certain changes in nonprofits are noteworthy. Those board members in the 43- and- under age bracket need some targeted nurturing. I encountered a new young person who energized the board with her eagerness to try to innovative development approaches. She was subsequently appointed to the executive committee, deepening her view of the organization and primed her for board chair leadership.

Board members who understand the robust responsibilities of a 21st century board need to accept responsibilities for mentoring these new age board people, despite their addictions to electronic devices.

  • Experienced Board Members: Board members who have served on other high-performance boards have the advantage of being familiar with modern governance processes and are comfortable in supporting change. They are needed to help boards, executive committees and CEOs to move beyond the comfortable bounds of the past. They will be difficult to recruit, but they are required ingredients for successful boards.
  • NEW Projects: Boards and the CEO must be bold and try new approaches to meet client needs. For example instead of going through a complete planning process for a new program the board must ask management to complete a series of small experiments to test the program. When a series of results are positive, the nonprofit can work on a plan to implement the program.

Conclusion: Individual board members working alone will probably become frustrated in trying to contend with the three overview barriers discussed. But working with three or four colleagues, over time, on a tandem basis, they can make inroads on the barriers. Meetings can become more focused on policies/strategies, new age board members can become more quickly productive, experienced board members can become role models and new programs and other projects can be more quickly imitated via the use of small scale experiments.

Is Your Nonprofit Forward Focused or a Prisoner of the Past?

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By Eugene Fram                          

It’s no secret that some board members cruise through their term of board service with minimal involvement. McKinsey Company, a well-known consulting firm, has suggested five steps that can be used to counteract this passivity in for-profit boards. * With a few tweaks, McKinsey suggestions (in bold) are relevant to the nonprofit board environment where director engagement is often a challenge.

Engaging between meetings: Nonprofit boards traditionally meet monthly, bimonthly or quarterly. Unless the board is a national one, these meetings range from one to three hours, with the three hours being typical of quarterly meetings. The meeting agendas are usually packed, and they leave little time for individual directors to enhance discussions. ** In addition, a sense of anonymity develops among board members who do not know each other personally, a significant barrier to team building. I have encountered nonprofit boards where disconnect between board colleagues is simply a nod—or less– when passing each other.

Board cohesion based on interpersonal relationships has an important impact on the quality of board discussions. It allows a board member to more fully understand the perspectives and goals of his/her fellow board members or “where they’re coming from.” With this information at hand on both sides of a discussion, it increases the possibility of creating “win-win” impacts for the nonprofit.

Responsibility for promoting between-meeting engagements needs to rest with the board chair. As a staring point, the chair can sponsor a few informal Jefferson dinners. The topic should be a cause which can excite the invitees. It needs to be, a challenge to the directors. ***

Engage with strategy as it’s forming—do not just review & approve it: Traditionally most of what becomes an organization’s strategy will emanate from the management and staff. But the board must proactively help to form strategy or step in to fill gaps when the management refuses to do it.

In forming strategy the board has an obligation to make certain all viewpoints are heard. Staffs as well as management ideas need to be considered. In addition, the board may need to take direct actions when the organization fails to fulfill a mission obligation. Example. A counseling agency only offered services during normal business hours–9 am to 5pm, five days a week. Its board required management to offer services, 24/7 with an emergency line when the office was not open. The management, a creative group, found a way to do it, without increasing costs.

Cultivate talent: The nonprofit board has several responsibilities in regard to talent.   First, it must engage and then evaluate the CEO. This is a complex duty because the vast majority of the board members are not full-time employees and many have only tangential attachments to the organization’s mission field. Second, the board must overview the quality of the staff talent so that it is in line with budget constraints. Third, it must be aware of those within the staff who may be promotable to management. Finally it must be alert to succession opportunities internally and externally in the event the CEO were to leave abruptly. Succession planning for the CEO must also include considerations about the talents that will be needed beyond the current one.

Engage the field: Since nonprofit board members have full-time occupations outside the mission field, it’s important that they receive a flow of information about leading edge changes taking place outside the organization. However, CEOs sometime can operate a “mind the store” nonprofit, by looking at past successes without a visionary component. To help avoid this occurrence, specific directors might be assigned to become more deeply familiar with key projects in order to assess their progress.

Engaging on tough questions: A difficult task on a nonprofit board where politeness is an overriding value. Peers are friends and business associations and generally there are few potential penalties for “going along to get along.” In all my decades as a nonprofit board member, I have yet to see one board member ask that his/h dissenting vote be recorded in the minutes. A necessary action when he/she feels that the vote being passed by the majority may lead to harming the organization.

*http://www.mckinsey.com/business-functions/organization/our-insights/changing-the-nature-of-board-engagement

** In California, the Brown Act might prohibit such meetings. The Brown Act covered concerns over informal, undisclosed meetings held by local elected officials. City councils, county boards, and other local government bodies that were avoiding public scrutiny by holding secret “workshops and study” sessions.

***For details on the background and planning for Jefferson dinners see: http://jeffersondinner.org/jefferson-dinner/

How A Nonprofit Board Member Can Initiate Positive Change

How A Nonprofit Board Member Can Initiate Positive Change 

By: Eugene Fram             

A nonprofit board member comes up with an idea that he thinks will do wonders for the organization. He is convinced that establishing a for-profit subsidiary will not only be compatible with the group’s mission but may even bring in new sources of revenue. It’s his ball–now what’s the best route to run with it? All too often in the nonprofit environment, initiating change can be as daunting as trying to get consensus in the US Congress! There are, however, certain interpersonal levers, which, if pushed, can accelerate the process–although one hopes that not all the levers will be needed in any specific situation.

  • Board Colleagues – Quietly enlist as many board colleagues as possible to support the idea.  Enlisting support from board opinion leaders is critical — then open up the discussion to others in informal conversations. Premature presentation to the entire board could stall the process.
  • The CEO – Either before or during conversations with board colleagues, be certain to review the proposed change with the CEO.  He/S will voice acceptance, rejection, or asks to consider it.  If s/he is opposed to the change, the board member only has these alternatives – wait until a new CEO is engaged; seek board termination of the CEO that is generally not a good move; or wait for better timing and board support.  It is foolhardy to seek the change in face of the full opposition of the CEO. If the CEO will support the change, it may be a good idea for the board member to step back and make the CEO the leading change agent.
  • Revenues – No matter how good the change, implementation will likely require financing beyond current budget allocations.   Consequently, a plan for fund  development from foundations and individuals will be needed for the final proposal.
  • Other Organizations—Other organizations with similar situations could serve as useful models. An on-site visit will provide information and enable the nonprofit to develop benchmarks that will reassure those that remain skeptical.
  • Measurement–Establish measurement metrics before the change is launched.  Do not hesitate to use imperfect metrics to track progress and drive change during the development period.  (http://bit.ly/OvF4ri)

Nonprofit board members have relatively short tenures—typically four to six years or less– and are often regarded as temporary overseers. There are opportunities to be much more than that if the board operates in a 21st century generative manner. The board climate should be open to ideas of positive change, and the creative board member must appropriately adapt or adopt the above levers to ensure effective acceptance and implementation

When Nonprofit Missions Get Muddled

 

By: Eugene Fram  

It happens over time. A passionately conceived mission starts to drift from its original intentions. Stakeholders begin to view a nonprofit’s purposes from a different angle. There is a discrepancy between how the organization is committed to act and external perceptions of its current actions. Nonprofit boards need to be on the alert to such misalignments that can go unnoticed in the perceptual “fog” of daily challenges. It can limp along for years without acknowledging the impact of the client reality by which the nonprofit is being judged.   

A good start would be a five year review of how others see the organization, i.e. volunteers, funders, clients, members, etc. The study can be conducted by an outside firm or developed internally by analyzing imperfect metrics. (See this article: http://bit.ly/OvF4ri). Based on those findings, nonprofits can either be assured that the perceptual status quo is congruent with the mission as stated– or, if there are material inside/outside differences, take steps to begin to rectify the discrepancies. These can range from mission modifications to a complete mission overhaul. Here are some considerations:

• Is the name of your organization confusing? Take the Family Service organization, for example, multipurpose human services agencies that, in some cases, were being perceived as resources for family planning. A few organizations’ first move to reinforce their stated mission was to change their names to Families First.

• Is your mission statement clear and concise? Does the wording represent your core objectives? Is it targeted to the right clients? Has it been highlighted in both written and digital output? A university’s mission may be to develop its students’ intellectual growth over a college time period. Conversely, the student/parent perception may see a degree as a conduit to a good job. The school, in this instance, is obliged to better represent its mission statement to convey its rationale—or modify its mission to redirect its academic trajectory.

• Societal and demographic needs are constantly evolving. The former Elderhostel changed its direction significantly when it sought to attract a younger population and renamed itself “Road Scholar.” Although it’s important to accommodate a variety of new initiatives, the question is– do they fit within the organization’s framework? It’s obvious that a nonprofit can’t be all things to all people. It may be difficult to accept a new perceptual reality, but growth and survival may be dependent on accommodating it.

Are Your Board and Staff Ready For Change?

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Free Digital Image

Are Your Board and Staff Ready For Change?

By: Eugene Fram               

Ideally, change takes place only when is a critical mass of board and staff want it. A significant portion of leadership must realize that the status quo won’t do. Based on my experiences, this ideal is rarely achieved because:

  • The CEO needs to support the changes being suggested and/or mandated by a majority of the board.   But, if not fully invested in the change, the CEO can accede to board wishes for action but move slowly in their implementations. The usual excuse for slow movement is budget constraint.

Complicating the situation is the fact that most nonprofit boards are hesitant to remove a CEO who has a nice personality but lacks vision, makes modest revisions each year and keeps budgets
in  balance. As volunteers, board members know that removing a “status quo” CEO can cause board and staff conflict. These events require more meeting times and can cause board members
to turn against one another. Volunteers accept board positions to promote positive outcomes, not to become involved with the stresses that accompany conflict.

  • Changing a CEO, board members or the governance model, etc., can easily send negative signals to the staff because they may view it as leading to disruption in their jobs and working environments. Most nonprofit staffs are only one or two organizational levels away from the board and may become concerned that new influential board members can have significant impact.

For example, two professors persuaded their board colleagues that the agency needed a “management by objectives program.”  The staff became so involved in establishing and measuring
objectives that they neglected client services .

Critical actions that boards can take to overcome these barriers.

  • Agreement about what “change” means. Perhaps it is increasing clients served and/or simultaneously having to increase donations to maximize the mission’s service? These changes can be readily measured. However, nonprofits often have revisions that can only be measured approximately in the short-term because of the significant costs involved. These include such items as improving public awareness or community influence. They require use of more qualitative measures over time to assess trends and improve the measures. *

Those responsible for change need to be reminded that words have meaning, and the words used to describe revisions can create negative attitudes from board members and staff. Those with
negative connotations include “profit, efficiency and restructuring.” Positive words include “mission, serving and compassion.”

  • Radical honesty about the hurdles standing in you way. It’s important to be upfront about the “bandwidth” in staff and board resources needed to implement any major modifications. This involves having three or four board members who are experienced with implementing change, willing to assume leadership of the process and have the interpersonal skills necessary to “sell” other board members on the benefits of the new plan. In one situation, where a governance model was changed and the ED’s title revised to President/CEO, a traditional board member was dissatisfied.  He complained about the new title “What do we call the ED now, Presco?”   The implication was that the new title was satisfactory for the head of a business organization but too sophisticated for the operating head of a nonprofit organization.
  • Commitment to do whatever it takes. Driving changed from a nonprofit board position isn’t for the person or team that gives up easily. A realistic plan is to anticipate the bumps in the road along the way. For example, if some board members agreed to a revision with limitations, it’s the responsibility of the CEO and board members to make certain they are consulted as the change progresses, helping them, if they can, to be more comfortable with it. If the change has substantial impact on the staff, the CEO and board members need to be certain that false rumors are handled appropriately when they appear. This also applies to rumors circulating in the community or in an industry, if the nonprofit is an association.

When boards fail to take the types of actions cited above, the impact can affect the nonprofit’s culture for decades. For example, a nonprofit engaged a new executive director with an authoritarian leadership style.  His long-term predecessor developed a relaxed culture, often casually taking staff meeting time to read poetry. The Board concluded major changes were necessary.

As a first step to solve the problem, the board made a mistake by demanding the new ED modifies his authoritative management style. But concurrently, a union organizer heard about the dissatisfaction and persuaded the social workers on the staff to form a union. Results: the problematic ED was finally terminated, and an experienced ED, who had worked previously at the agency, was engaged. But the social work staff is still unionized. Trust between management and the professional staff was never restored.

* https://nonprofitquarterly.org/2012/07/24/using-imperfect-metrics-well-tracking-progress-and-driving-change/

Can Business Board Experts Can Offer Nonprofit Gems? 

  

By: Eugene Fram                                 

Chinese Proverb: The wise person learns from his/h own experiences. The wiser person learns from the experiences of others

The CEO Forum published an article covering the governance views of five business board members, known for their wisdom and vision.   Following are some of topics in the article that relate to nonprofit boards. *

Good governance is dependent upon well-curated boards. This means that nonprofit boards must look beyond the functional competencies (e.g. accounting, marketing, law, etc.) for candidates. Within these groupings, they need to seek candidates who have strategic outlooks, are comfortable with critical thinking and have documented leadership skills.   This requires recruiting and vetting efforts that go well beyond the friends, neighbors and colleagues who traditionally have been the sources for board positions. Also related is the issue of board succession, since that many will leave the board after a four to six year period. The current board(s) has an obligation to make rigorous recruiting and vetting become part of the nonprofit’s culture.

Assessing long-term sustainability. In the past, nonprofits have projected longevity because there will always be a need for the services or products they provide. This is no longer an assured proposition. Nonprofit day care centers now must compete with those that are for-profit. Improvements in medication have decreased the need for individual counseling and many new technologies can quickly solve problems that are embedded in the nonprofit’s mission.

Review governance best practices carefully! Know who is suggesting them and make certain they are appropriate for a specific organization. For example, some experts suggest that executive committees should be eliminated. However an executive committee that is responsible for a slim board committee structure can be effective in driving change and promoting better communications throughout the organization. **

Changing public accounting firms. Nonprofit accounting practice suggests changing public accounting firms about every five years. However one expert suggests, “It is important to ensure that judgment areas such as nonGAAP disclosures are well-defined, supporting calculations are well-documented and that the definitions and calculations are consistent across reporting periods.” At times of accounting firm change, nonprofit board members need to be able to add these issues to their question that they pose to management.

Ethics & Compliance. Like business organizations, nonprofits are subject to significant lapses in ethics and compliance. One study of  nonprofit fraud found that it 46% involved multiple perpetrators.  ***  As shown in the Wells Fargo debacle, establishing the tone for rigorous applications of a standard needs to start with the board and flow through all management levels. In the current environment, audit committees have to be especially alert and take immediate actions when red flags arise in either the ethics and/or compliance areas.   In my opinion, a nonprofit audit committee that meets only once or twice a year is not doing the necessary job.

Strategy. The nonprofit board has an obligation to help management see “around the next corner.” This involves board members assessing coming trends and sparking civil and meaningful board and committee discussions.

Board member comfort zones. Like their business counterparts, few nonprofit board members are “comfortable testing how to rock the norms.” It is easier to acculturate new directors to the current norms, a process that is inward bound and self-defeating. But a start can be initiated with questions such as, “If we were to start a new nonprofit across the street, what would it look like and who of the present board and a staff members would we ask to join us?”

*https://www.forbes.com/sites/robertreiss/2017/05/22/americas-five-governance-experts-share-perspective-on-boards/#2a2ee326659a   

**For documentation see: https://goo.gl/QEL8x3

***https://nonprofitquarterly.org/nonprofit-fraud-its-a-people-problem-so-combat-it-with-governance/

Can Using Imperfect Data Assist Nonprofits in Defining Impacts?

 

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, a nonprofit might count the number of volunteers that have been trained. 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 it determines their relationships with clients and yields impact data.

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.

(more…)

Stay on That Nonprofit Board!

By: Eugene Fram

Gene Takagi, noted San Francisco attorney, who specializes in nonprofit organizations published an article listing 12 reasons for resigning from a nonprofit board. It is worth reading.*

BUT

Nonprofit board members often become impatient with the slow pace of progress toward positive change. Here are some actions that may change the situation, improve service to clients and prepare the organization for any long-term mission disruptions.

• Talk With The CEO: He/s may feel the same frustrations and be delighted to find a board member who shares his goals. In fact, she/h may be thinking of leaving or be wedded to the current area only because of a family situation. As a result, your conversation may give a chief executive new hope and energy. On the other hand, if the CEO is too aligned with the past, it will be unlikely that the board will terminate the current CEO, unless there are some performance malfeasances involved. Then, estimate the CEO’s remaining tenure and use remaining time to find opportunities to make modest increments in change.

• Talk With Other Directors: Between board meetings, have informal coffee sessions with other directors to determine their views on the areas in which you feel change is necessary. Three or four board opinion leaders can garner positive movement, assuming there are no strong objections from the CEO.

• Outside Validation. If sufficient budget is available, ask the board to engage a consultant to examine the potentials for change. The rationale for the request might be: “We are doing well, let’s determine how we can better serve our clients.” If budget isn’t available or the CEO is against the expenditure, try to have the board arrange, for an outside speaker or two who might validate the need for change. This might be a person from the field or a local professor who has some insights aligned with change-focused board members .

• Seek Outside Financing: Personally seek sources for capacity grants that, if awarded, might be developed to further help clients. Ask the board to take leadership in applying for several of these grants. A single successful grant might be the linchpin to promote the type of change desired by the group having similar views.

• Chair The Nominations Committee: As chair, the director can be in a position to search for candidates who are forward looking. In addition, the committee, under the urging of the chair, can seek candidates who have served on other nonprofit boards and who have proven their meddle to bring about change.

Summary
For any single board member of a status quo nonprofit to lead a change on organizational culture will require tenacity, time and patience. The person will need to be extremely dedicated to the organization’s mission and want to improve the services to its clients. Very few board members have the grit to lead such a change. However, a small-motivated group can be an advanced guard to initiate some actions in the right direction. But the group will have to keep Peter Drucker’s insight in mind when the going gets tough, “Culture eats strategy change for breakfast.”

An unusual case of an ED accused of serious malfeasance, but the board refused to fire him. http://bit.ly/1om6XUw

*https://nonprofitquarterly.org/12-reasons-resign-nonprofit-board/

Measuring Nonprofits’ Impacts: A Necessary Process for the 21st Century

 

Measuring Nonprofits’ Impacts: A Necessary Process for the 21st Century

By Eugene Fram      Free Digital Image

Unfortunately, outcomes and impact are often unrelated, which is why a program that seems to produce better outcomes may create no impact at all. Worse, sometimes they point in opposite directions, as can happen when a program works with harder-to- service populations resulting in seemingly worse conditions, but (has) higher value-added impact. … Rigorous evaluations can measure impact (to a level of statistical accuracy), but they are usually costly (a non starter for many nonprofit), difficult and slow. * But how do the medium and small size nonprofits measure actual results in the outside world such as enhanced quality of life, elevated artistic sensitivity and community commitment?

A Compromise Solution:

To close the gap, funders and recipients would need to agree to apply imperfect metrics over time. These are metrics that can be anecdotal, subjective or interpretative. Also they may rely on small samples, uncontrolled situational factors, or they cannot be precisely replicated. ** This would require agreement and trust between funders and recipients as to what level of imprecision can be accepted and perhaps be improved, to assess impacts. It is an experimental approach

How To Get to Impact Assessment:

1. Agree on relevant impacts: Metrics should be used to reflect organizational related impacts, not activities or efforts. Impacts should focus on a desired change in the nonprofit’s universe, rather than a set of process activities.
2. Agree on measurement approaches: These can range from personal interviews to comparisons of local results with national data.
3. Agree on specific indicators: Outside of available data, such as financial results, and membership numbers, nonprofits should designate behavioral impacts for clients should achieve. Do not add other indicators because they are easily developed or “would be interesting to examine.” Keep the focus on the agreed-upon behavioral outcomes.
4. Agree on judgment rules: Board and management need to agree at the outset upon the metric numbers for each specific indicator that contributes to the desired strategic objective. The rules can also specify values that are “too high” as well as “too low.”
5. Compare measurement outcomes with judgment rules to determine organizational impact: Determine how may specific program objectives have reached impact levels to assess whether or not the organization’s strategic impacts have been achieved.

Lean Experimentation

The five-point process described above closely follows the philosophy of lean experimentation, ** now suggested for profit making and nonprofit organizations.

Lean allows nonprofits to use imperfect metrics to obtain impact data from constituents/ stakeholders over time. Under a lean approach, as long as the organizations garners some positive insights after each iteration, it continues to improve the measurement venues and becomes more comfortable with the advantages and limitations of using these metrics.

Organizationally the nonprofit can use this process to drive change over time by better understanding what is behind the imperfect metrics, especially when a small sample can yield substantial insights, and actually improve the use of the metrics.


* https://nonprofitquarterly.org/2012/07/24/using-imperfect-metrics-well-tracking-progress-and-driving-change/
** http://ssir.org/articles/entry/the_promise_of_lean_experimentation