Improving Your Nonprofit Through Performance Measurement

Posted on: 1/3/19 by Christopher J. Healy, CPA, CGFM

Technology has made it easier than ever for nonprofits to review large volumes of data. With the right tools and procedures in place, your nonprofit can use that data to evaluate your organization’s performance and best demonstrate its value to donors.

To measure your nonprofit’s performance effectively, you’ll need a plan that outlines the appropriate metrics, the right data to collect and a schedule to evaluate the results.

Choosing the Right Metrics

You can use a number of metrics to assess the effectiveness of your nonprofit’s fundraising outreach. They track whether you’re getting a good return on investment from the staff and services dedicated to various parts of your nonprofit’s operations.

For example, metrics can be used to track donation growth (both in terms of dollars and number of donors), the cost per dollar raised (the amount spent to acquire the donation), email open and click-through rates and social media impressions.

In addition to these standard metrics, you may want to implement more individualized metrics that better reflect your nonprofit’s specialty. An organization focused on community outreach may want to track the number of beneficiaries it serves, while a research nonprofit may be more interested in tracking the quantity and quality of what it produces, such as the media coverage it receives. The metrics you choose should allow you to communicate to supporters the impact of your nonprofit and the success it has in achieving its core mission.

Gathering and Managing Data

Once you’ve determined the metrics to track, think about the data you’ll need for an evaluation. First, conduct a thorough review of your nonprofit’s data inventory, so you know what information you already collect and where it is stored.

Then consider what additional data is worth collecting and different software options for managing that data. Salesforce, Microsoft, Oracle and other vendors have customer relationship management software that allows staff to track outreach to donors, potential donors and other constituents. There are also tools more specifically designed for email outreach (Mailchimp, Constant Contact), news coverage (Cision, Meltwater, Critical Mention) and social media influence (Buffer, Sprout Social). Before investing in any of these services, review the options available and ensure that they best suit your nonprofit’s goals.

Evaluating Performance and Improving Strategy

To get the most out of tracking your nonprofit’s performance, make sure the data collection process is streamlined and incorporated into your strategic plan. Having the best data on file won’t help if you don’t use it to improve outcomes.

As part of your strategic planning, set a review schedule for each metric. Some might require weekly or biweekly review, while others may only need to be reviewed quarterly. Assign metric monitoring to the appropriate team member, but keep all staff aware of the nonprofit’s evaluation plans to encourage collaboration. For example, if the social media team and donor relations team coordinate, they can implement more complementary strategies that improve overall results.

Whether these organizational evaluations uncover unnecessary or duplicative procedures, or highlight areas of strength, investing in tools that measure your nonprofit’s performance can help you better achieve the organization’s core objectives and reassure donors that their contributions are used effectively.

For questions on how to effectively use performance metrics for your nonprofit, please contact your Marvin and Company, P.C. representative.

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