Yesterday I wrote about the importance of nonprofits tracking their outputs, outcomes and impact to the best of their ability. Reader Nick Temple of the School for Social Entrepreneurs commented:
“[Nonprofits should see outputs, outcomes and impact]… not just as ‘reporting’ to donors, philanthropists and investors of all types, but also an important part of improving an organisation’s work: we need to prove that what we are doing is making a difference, but we also need to improve those services wherever possible, learning from what we’ve done so far.”
This point of view is one that I agree with completely and one that I think needs to be more broadly accepted for nonprofits to fully embrace tracking their results.
In our current system, funders typically decide what sorts of reports they want to see from nonprofits. Nonprofits then have to create these reports for each funder. These might be elaborate, custom reports for major foundations or it might require spending time responding to the idiosyncratic requests of an individual major donor.
I believe that nonprofits are best positioned to know what information is most important for them to track. The most relevant information is that which reveals how well a nonprofit is performing and the degree to which its programs are making a difference. This information should be mission critical for the nonprofit, even if no funders are asking for reports. It is also the information that funders should be most interested in receiving.
This means that high performing nonprofits should be tracking their outputs, outcomes and impact for their own purposes and funders should be seeking to support these sorts of high performing nonprofits. The reporting burden then becomes much lighter on the nonprofit and specialized reporting might only be available for very large donors.
For too long, the conversation around measuring and tracking results has been framed as a sort of finger wagging campaign by the funding side of the table who often waste their grantees time by requesting information that is of little relevance and which ends up sitting on the shelf at the foundation.
But nonprofits perpetuate this dysfunction by not bothering to track mission critical outputs, outcomes and impact.
This is why my definition of a high performing nonprofit focuses on how they interact with the data they track. While nonprofits may often view the process of collecting this data as a waste of time, that is only because the dysfunctional grantee/funder relationship drives nonprofits to report on information with little value to their work. But if a nonprofits leads the creation of their data tracking process, the result is a better run organization, that has more impact and which can far more easily fulfill the understandable reporting needs of funders.
High performing nonprofits…
- …base their programs on research about what works.
- …actively collect information about the results of their programs.
- …systematically analyze this information.
- …adjust their activities in response to new information.
- …operate with an absolute focus on producing results.