Reader Jeane Goforth writes:
Evaluation. My co-founder and I spent 2 hours standing on a street corner ‘after’ work discussing how to measure and convey the profound experiences we have daily. My stomach churns and my shoulders ache when our expert non-profit adviser talks about metrics. I struggle to add one more thing to my to-do list and I know metrics don’t say enough about why what we’re doing works and why it is important.
To me, this comment sums up everything that is wrong with metrics, both how they are dismissed by detractors and how they are misapplied by advocates.
Bad metrics are “one more things to my to-do list”. If the metrics don’t help the nonprofit run their organization better, than their relevance should be questioned. At Ensemble Capital we track a number of metrics about the performance of the firm. We don’t do this to show them to anyone else, we do it because they help us understand our organization better. But we also know that the metrics that are trackable do not capture everything (or even most) about our business.
One of the most important events in Ensemble’s history (in my mind) was when I was making a presentation to the CEO of a public company about why he should consider opening a private foundation. Half way through the conversation he cut me off and said, “Let’s do it. This makes all the sense in the world. A couple of years ago I asked my CPA if I should have a foundation and he gave me one answer. Then I asked my lawyer and he gave me another answer. But clearly you understand the reasons that I personally need a foundation, so let’s get one started today.” This individual had access to some of the best advisors around. Yet they failed him when it came to philanthropy. That was when I knew Ensemble was going to be a success. But that statement doesn’t show up in any metrics that we track.
Every nonprofit should be searching for relevant metrics to track that can help them run their business. If you don’t realize that total donations are going up only because two large donors have significantly increased their giving, then you will not see the increasing risk to your budget of losing those two donors. If you are working with high school students to help them get into college and the rate at which students are going to college is not budging, you have some examination of your program to do (although it doesn’t mean by itself that you’re failing).
But metrics that do not help the nonprofit are probably useless to donors. If a donor asks for a metric that you do not think is relevant, it is either because you are mismanaging your organization, or far more likely, the donor does not really understand what you do.
Quantifying “doing good” is tough if not impossible. But the idea that nonprofits don’t have time on their to do list to think about whether they are doing a good job is poison. Anyone running a for-profit or nonprofit organization should be thinking everyday about how they can do better and what tools can help them understand their organization. If “tracking metrics” is something that is just busy work, then it is useless work.