Some people will love this subject because it has the potential to shine light on the remarkable work that they and others like them do each day, often times with little recognition and sparse compensation.
Others will be uncomfortable with this subject, probably not read too far into this blog and hope that no one else does either, especially no one that they are accountable to.
This post is about measuring the success and impact of non-profit organizations.
Before we get into it, let's go back to March 29, 1992. It's the NCAA Men's Division I Basketball Tournament, East Regional Final. Pitting Duke versus Kentucky at The Spectrum in Philadelphia. Sports Illustrated deemed it the greatest college basketball game of all time. With 2.1 seconds remaining in overtime, Duke trailed 103–102. Grant Hill threw a pass the length of the court to Christian Laettner, who dribbled once, turned, and hit a jumper as time expired for the 104-103 win.
I care about about college basketball about as much as preschool basketball, but there is something I like about every basketball game: that every player and every team is striving towards a clear objective and that at the end of every game, there is always a clear winner. At the end of every season, we know who the champions are, and we also know who had the worst record. One coach is deserving of a bonus while another needs to be fired. All of the fans and owners can easily confront the brutal facts of their team's record, as the outcomes of each game are clearly documented.
Winning a basketball game is not an indicator. It's a hard fact.
When I look into the world that I and many of many Virtue Center customers inhabit, rarely can a non-profit organization lay claim to such a firm fact of their success. In a best case scenario, they rely on indicators, sometimes referred to as key performance indicators or KPIs to measure their health, success and overall impact.
In a worse case scenario, a non-profit may recruit a seemingly capable team and a prestigious board, rent out and office and do work. What work? Some work that someone decided pertains to the mission of the organization or advances it's cause. How effective? No one knows. Some people feel good about it, others are saying bad things about the work of organization – but it's all based on sentiment and gut-level instinct because there simply is little available empirical data to be relied upon. No one decided what to measure and no measurement is taking place.
I'm not going to tell you how important the JIm Collins' book Good to Great is or how much the concepts have been integrated into the work we do at Virtue Center for non-profits and small to medium sized businesses, I'll save that for another post. What I will tell you, is that Good to Great documents the scientific proof that organizations that have made a sustained transition from “good” to remarkable “greatness” had KPIs – and they focused on a just a few, perhaps event just one – and they measured it relentlessly as they had identified it as the common denominator of their success that drives their economic engine.
Non-profits need money just like for-profits, but they also have a higher purpose which is the fulfillment of their core mission that delivers value to society. It is for this reason that I advise every non-profit organization needs to identify two metrics that are critical to their success. One economic, and the other related to impact.
When you have these core metrics, you can monitor them regularly, sometimes even daily and know with confidence where the organization is headed financially and how impactful it is. If there is a problem, it can be addressed – before it's too late. And if things are going well, then supporters and others can be confidently informed and called upon to stand-up to support an organization that is providing real and measurable results and is deserving of all of the funding it can get.
Two simple examples of KPIs are:
Economic: Subscription Donors Added per Month
This is the number of people who have signed up to have a monthly donation automatically deducted from their checking account. If hypothetically this source of funding was the central way that an organization sought to sustain itself – then tracking the number on a weekly or monthly basis can help the organization set goals and know it they are on target to meet them.
Impact: Workshop Attendance by Month
An impact KPI is going to be extremely specific to the mission of the non-profit. Suppose there was an organization that was focused on educating populations about their civil rights, they could track the total number of people who attend their workshops as a measure of impact.
At the beginning of the post, I had mentioned that some people will be uncomfortable with this subject. These are the people who are squandering the resources that they have been entrusted with from people who want or need thier organization to succeed. They thrive in chaos and resist all measurement out of fear of being exposed.
It must be understood that purpose of KPIs is not to hurt anyone, but to help an board and staff within an organization to work together and collectively decide and commit to what is important to focus on and then to help the organization consistently achieve results. With KPIs in place, many problems can be realized and addressed through brutal and empirical honesty before there is a crisis. If in a worst case scenario, if someone needs to be fired, it should be because there was clear communication about missed goals and measured failure – not because of someone's whim or personal feelings.
At Virtue Center, we love to see organizations setting, measuring and achieving their goals. If you are interested in a KPI workshop for your organization, please let us know.