Monday, May 13, 2013

Why Measure Impact

The finding that intrigued me the most from the Nonprofit Finance Fund survey was that 53% of the 6,000 respondents regularly collect data on the impact of their programs.  I thought the number would be higher.  In a time when nonprofits are facing government funding cuts and will be looking to individuals and businesses for more funding, they need to be measuring and communicating impact.

The 53% that measured impact corresponded closely to 54% of respondents who noted that funders ask them to measure long term impact.  While the survey does not note that the same nonprofits who measure impact are the same ones who are asked to do so, the similar percentages lead me to believe that is the case.

The number one reason nonprofits did not measure impact was that they noted they did not have enough time (69%).    The other reasons related to not having enough knowledge to measure impact.  These reasons included:  impact is not easily measurable (54%); no resources to hire an outside consultant to help collect data (52%); and not having the right staff expertise (40%).

Nonprofits must make the time to measure impact.   If they cannot explain to their donors, staff, and stakeholders that what they do makes a positive difference, how will they sustain the organization?

Now I know that studies show that 2/3 of donors give without consideration of the data.   I also know that many organizations provide services to recipients that they cannot track in the long term.

But consider this—1/3 of donors do give with consideration of the data.  So those organizations that regularly measure impact will appeal to more donors and be better positioned to thrive.  

On the difficulty of measuring long term impact, nonprofits need to engage in robust conversations, locally, regionally, and nationally to make sure that what they are doing is truly impacting the community.  They need to clearly define how they will validate and measure the impact.   Small local nonprofits can and do use national studies that refer to research based results.    This can provide the long term impact statistics that some donors consider.

Of all the survey results, this is the number to improve.  Over time, if this number increases and the impact is communicated to donors, staff, and stakeholders, not only will the financial viability of nonprofits improve but the impact of the nonprofit sector on the community will improve as well.