April 1, 2012 | Read Time: 7 minutes
Over the last decade, nonprofits have faced intensified pressure from government, foundations, and other donors to demonstrate their results.
No wonder that in naming the people who would benefit most from their measurement efforts, twice as many nonprofits identified grant makers and boards as they did their own leadership teams and staff members, according to a survey by the Innovation Network, a group that aids charities in rethinking their operations.
Of course, it’s good to have tools that inform people outside the organization. In a race, the yellow tape and the clock tell us who won and how well each runner did.
But for the runners themselves, the stopwatch is their everyday measurement tool. It’s what allows them to compare today’s results with yesterday’s, measure their actual performance against their aspirations, and get better.
Nonprofits that want to achieve better results need their own versions of the stopwatch—tools they can use to assess how they’re doing and manage their performance. Yet only 31 percent of nonprofits with budgets of $5-million or more had even one full-time employee devoted to measurement, and only 13 percent of all nonprofits had such a staff member, according to the Innovation Network.
Nonprofits, it appears, are not spending enough effort to measure how well their programs and organizations are doing.
But as more and more nonprofits consider augmenting their measurement skills, they would be wise to listen to the lessons of those that have taken similar steps.
Among the main pieces of advice we got from interviews with a wide range of nonprofit executives:
Leadership comes first. “If the CEO is not dedicated to performance measurement, it’s simply not going to happen,” one nonprofit leader told us.
This often requires the leader to make a mental shift, no longer viewing measurement only as a tool to report results to grant makers but as a means to improve an organization’s ability to meet its mission.
For Graham Windham, a 200-year-old child-welfare organization in New York, it was a board member with business experience whose simple question five years ago—“How do we know we are making a difference?”—prompted the chief executive, Poul Jensen, to make performance measurement a priority.
External pressure, of course, has its value. As another leader said, “We had to complete all of these extensive reports to donors, which made us realize we had to get much clearer about what outcomes we were trying to achieve.”
Provide incentives that make improvement an integral part of the organization’s culture. By itself, collecting data won’t improve performance. How do you get staff members at all levels to use data to help the organization get better at its work?
Some organizations offer direct incentives, such as altering job descriptions and criteria for performance reviews to make employees formally accountable for measuring performance.
Yet, according to the leaders we spoke with, the most effective incentives are those that build staff members’ comfort, confidence, and capabilities in using data to improve their work.
For example, it’s important to focus on the opportunities for improvement that data show, rather than concentrating on mistakes. “If staff believe they will be punished every time something doesn’t work, you have no hope whatsoever of succeeding,” one nonprofit leader told us.
Attract outside expertise. Every executive we spoke with mentioned the value of asking experts (academics, evaluators, nonprofit leaders, and others) to help build the skills of staff members in designing and measuring programs and other activities. In fact, a common mistake was waiting too long to get counsel because groups assumed outside experts would not be valuable until the organization was ready for a large-scale evaluation. But understanding the best knowledge and ideas from the top thinkers about a nonprofit’s cause proves to be invaluable throughout every stage of making measurement work.
Anisha Chablani, chief knowledge officer at Roca, an $8-million nonprofit that helps young people escape poverty and violence, says getting outside help was critical as her group clarified how its program would work best and designed tools and approaches to measure performance.
“We did do our own work to get clear, but getting someone in from the outside who wasn’t vested either way and could push and challenge us was absolutely critical.”
Seek a leader who has more than just data skills. Nonprofits that grow beyond a certain size will eventually face the question of whether to create a full-time performance-measurement position. Many organizations reported that because their programs and measurement approach were not yet fully refined when they created the role, their first measurement director needed to be able to motivate staff members and leaders to do the hard work of testing what was working, analyzing the data, and making improvements.
Horizons for Homeless Children, a $10-million Boston organization that provides early-childhood education, hired its first measurement director in 2011, when the organization wanted to shift from counting the number of children served and other such figures to measuring what difference the program made in the lives of the children and families it serves.
Nathan Hutto, the organization’s first director of evaluation and innovation, says he has “a strong background in statistics and econometrics, but I don’t think this is the most important thing. Especially when you’re starting up, it is more important to have someone who is good at designing measurement around the vision for the organization and building relationships with the staff, children, and families to ensure measurement is helpful to them.”
The position requires a person who is good not only at managing data but also at managing change.
Evolve the measurement function as the organization grows and priorities shift. If each part of the organization needs to use data to improve its performance, then each one must take responsibility for the measurement work. Especially as organizations grow, however, nonprofits will want to find some balance between a centralized measurement function (which sets measurement standards, aggregates data from all programs, and coordinates evaluation studies) and a diffused one (so that people at the program level are not merely entering data but also using it).
Many organizations have adopted this kind of hybrid structure as they have expanded. While some staff members who handle measurement tasks remain part of the program staff, where they support data-driven decision making, other workers join a centralized measurement unit to take on new roles that arise as the organization grows. Youth Villages, a $165-million large multi-state nonprofit that helps emotionally troubled youths live successfully with their families, has long had such a hybrid approach.
Hughes Johnson, the organization’s director of performance improvement, says: “We made a conscious decision from the beginning to decentralize measurement; this makes sure it is everybody’s data. However, we do have a few folks who provide central support that lets us go up or drill down to whatever business unit we want to examine.”
The leaders we spoke with also shared insights into how grant makers can support an organization’s efforts to follow these lessons. They can:
- Let the grantee decide what to measure and how to gather it so the organization’s top priority will be to focus on data that improve its work.
- Make investments early in an organization’s evolution that promote performance measurement, such as supporting data systems, hiring outside experts, or hiring a full-time measurement director.
- Provide expertise and other non-financial support (such as opportunities to learn from peers) to enhance the rigor of the organization’s approach to measurement.
Measuring the results of nonprofit work is no longer an option, it’s a necessity. It is one of the few really powerful ways nonprofits have to improve services, manage costs, and attract the resources they need to do good in the world. But it will take a culture shift among nonprofit leaders for the measurement movement to become widespread. What everybody should keep in mind is this powerful way that Ms. Chablani of Roca thinks about measurement: “There’s a lot of belief that measurement takes away from thinking about your clients, when in fact I think it is the very thing that demonstrates the level of respect you have for them.”
