There has never been a lack of information to measure the effectiveness of the private sector or the public sector, but the nonprofit sector has little capacity to manage effective action through a system of measures.
This is very likely because non-profit organizations are not obliged to provide a multitude of requests that have become commonplace for the public and private sectors for many years. This article will only serve to incite (hopefully) non-profit organizations to strengthen internal measures that strengthen compliance with standards of ethics, governance, and accountability.
The type of measure to which we refer is usually called a “metric”.
To be effective, a systematic series of metrics must be defined, measured, and carefully applied. Among the most obvious mistakes made by organizations (of any kind) are the lack of specifics of the measure, its relationship to specific goals and objectives, and the ability to compare data over time. In other words, if the measurement method changes every year, then the organization does not have a point of reference (data for the previous year), to which the data for the current year refer. Another serious mistake (and very common) is the tendency to measure “results” instead of “results”, which hide the true effectiveness of the mission by a nonprofit tracking organization.
Several issues need to be taken into account:
- Data does not match the information.
- Measurements must be performed over time to ensure relevance.
- Only “outcome” indicators can judge performance.
So, how does a non-profit organization begin? Who in the organization should define the data, products, goals, and objectives for measuring performance?
A nonprofit organization should begin by formulating its mission; if the statement of the mission does not contain specifics that allows you to create obvious goals and objectives, as well as the basics of ethics, management and responsibility, first of all, you should pay attention to the quality of the statement of mission. However, for the purposes of this article, it is assumed that there is a suitable mission, goals and objectives for guiding the measurement process.
“Who” can vary widely among non-profit organizations? Ideally, the organization should be strong enough to have excellent staff capable of handling daily operations, and the executive director can be the “who” monitors the measures. In even larger organizations, the board of directors may appoint a “performance committee” to track and analyze performance indicators. But for the purposes of this article, we consider the worst case: the staff has already been exposed, daily operations are a problem, and fundraising is in a crisis.
Who has time to measure?
The main point of this article is that you cannot afford not to measure, so in our worst case this responsibility falls on the executive director, who is already overloaded with work.
However, the attitude to the benefits of the measures determines the propensity and possibilities for this. We argue that a non-profit organization cannot afford not to measure! Why? Because the measurement system becomes the same information that informs donors and grantors that your organization is on a business trip and makes “measurable” changes to its programs in the community. Let’s face it; no non-profit organization can afford to see otherwise, given the current economic problems.
How “products” are defined differently than “results” and why is this important?
Well, an organization that constantly measures itself by products causes’ great damage: it offers donors and grantors that it cannot measure its results. For example, if a job training organization recruits 100 laid-off workers, this is a “product” and an interesting number to track, but the numbers become significant when “results” are reported: 75 out of 100 people registered in Training have 75 left in the program from beginning to end, 60 have been certified and 50 are still working after 12 months.
Do you see how data becomes information and how the relevance is relevant in time?
After 5 years of collecting only “production” data, the organization could report that it gathered (or, more often, “served”) 1000 redundant workers and that the demand in its program is constantly growing. But what happens if the program doesn’t work? What does not correspond to what? For example, with regard to their “results”: over a 5-year period, the level of graduates increased by 20%, the level of employment increased by 50%, and the people served by the program still work after 5 years, which is 80%. The data has now become useful information!
This example clearly demonstrates the power of metrics that can be reasonably introduced into the operating system of non-profit measures in order to give a non-profit organization a distinct advantage in performance when competing with its non-profit groups. Couples for increasingly limited means.