In our previous blog article from AcctTwo’s series about tracking nonprofit outcomes, we highlighted some of the metrics that nonprofits can define their success with. You can use these indicators to assess whether the nonprofit is on the right track, and prove your positive results to donors and grant managers who want to invest in effective nonprofits only.
Knowing what to track is an important start, but the hard part comes next: figuring out how. Nonprofits are in the dark about outcomes because the necessary data is hard to capture, categorize, and quantify in a meaningful sense without the right nonprofit dashboard indicators.
Consider this example: A nonprofit has a mission to improve the lives of adolescents by connecting them with mentors. That’s an admirable endeavor – but it’s also abstract. How do you identify and quantify an improvement in someone’s life? Furthermore, how do you evaluate whether a nonprofit is using resources (money, time, staff etc.) as effectively as possible based on the outcomes achieved? It’s a complicated calculus.
3 Types of Data to Measure Success
In the same way that height and weight don’t reveal someone’s health, it takes lots of data points to evaluate whether a nonprofit is successful. They segment into three categories:
- Inputs – The resources used to conduct activities.
- Outputs – The number of activities conducted.
- Outcomes – The results of each activity.
Returning to the mentoring nonprofit: It takes a certain amount of staff and funding to run the program (inputs), which attracts a certain number of adolescents and mentors (outputs). The final result (outcomes) might translate as better performance in school, healthier relationships with friends and family, or less contact with drugs/alcohol.
Most nonprofits have plenty of data on inputs and outputs (money spent, program attendance etc.) but much less related to outcomes. The qualitative nature of outcomes makes them harder to observe directly, so consider using surveys or interviews (whatever makes sense) to investigate how programs impact the participants.
One Place to Evaluate Nonprofit Outcomes
What data you collect and how will vary widely, but all nonprofits will need to rely on a centralized platform for managing everything relevant to outcomes. Combining in-depth financial data with comprehensive operational data, the platform should incorporate everything necessary to understand outcomes and streamline how complex data crystallizes into clear insights.
In the absence of such a platform, nonprofits would have to solicit data from multiple stakeholders, integrate it manually, then analyze it methodically before they could understand anything about outcomes.
Relying on a nonprofit KPI dashboard that updates outcome metrics in real time sounds much simpler. It’s possible with today’s technology, and accessible with the right partner. Stay tuned for our next post on using nonprofit dashboard indicators to tell the story of your success. In the meantime, explore the KPIs that demonstrate your outputs and impacts in this eBook, "How Measuring the Right KPIs for Nonprofits Increases Donations."
In our next blog, we'll share what it takes to begin "Putting Outcome Metrics Into Action With Nonprofit Dashboards."