1. MEET U.S. Performance Measurement Confidential – Do not Distribute NP STRATEGIES MEASURING PERFORMANCE IN THE NONPROFIT ORGANIZATION MEET U.S. In-Region CSO Training Program 21 – 31 January, 2007

2. MEET U.S. IMPACT Assessment Intro Confidential – Do not Distribute NP STRATEGIES “MEASURING MISSION IS LIKE THE HOLY GRAIL FOR NONPROFITS— MUCH SOUGHT-AFTER BUT NEVER FOUND.” John Sawhill & David Williamson

3. MEET U.S. IMPACT Assessment Intro Confidential – Do not Distribute NP STRATEGIES OBJECTIVES FOR TODAY 1.Understand the opportunities that performance measurement presents 2.Select metrics that make sense for your organization 3. Determine how you will use performance measures

4. MEET U.S. IMPACT Assessment Intro Confidential – Do not Distribute NP STRATEGIES WHY IS MEASURING PERFORMANCE IMPORTANT? 1.It enables you to know when mission is achieved or progress is made 2. It facilitates continuous improvement 3. It establishes a culture of accountability 4. It helps improve and refine the organizations theory of change 5. It assists with fundraising efforts and building public support 6. It provides accountability to stakeholders

5. MEET U.S. IMPACT Assessment Intro Confidential – Do not Distribute NP STRATEGIES MEASURING PERFORMANCE MORE CHALLENGING IN THE MISSION-DRIVEN ORGANIZATION Bottom Line = Profit Program decisions based on costs and benefits All stakeholders have common, clear objectives Facilitates communication, both internally and externally BUSINESS ORGANIZATION Bottom Line = Mission Program decisions based on wide range of indicators Each stakeholder has different incentives and objectives Leads to varying messages for internal and external audiences NONPROFIT ORGANIZATION

6. MEET U.S. IMPACT Assessment Intro Confidential – Do not Distribute NP STRATEGIES WHAT CAN NONPROFITS MEASURE? ACTIVITIES Inputs Measures what you have as an organization to utilize Examples Dollars raised Number of volunteers Staff/volunteer time Gifts in kind Number of applicants Outputs Measures quantity and quality of actions Examples Number of people served Level of satisfaction Quality ratings % of people placed (e.g., workforce) Relatively easy to capture but don’t tie back to mission Important to track but tell you nothing about results

7. MEET U.S. IMPACT Assessment Intro Confidential – Do not Distribute NP STRATEGIES WHAT CAN NONPROFITS MEASURE? ORGANIZATIONAL PERFORMANCE Utilization Measures ability to operate, perform activities and impact mission Examples: Administrative cost ratio Fundraising ratio $ spent/activity accomplished (e.g., dollars spent per increased academic results) Time measurements (e.g., increased results relative to time passed) Most nonprofits track internal efficiencies but an opportunity exists to show organizational effectiveness

8. MEET U.S. IMPACT Assessment Intro Confidential – Do not Distribute NP STRATEGIES WHAT CAN NONPROFITS MEASURE? IMPACT Direct OutcomesSystemic Outcomes An important part of the picture, but not the whole picture Challenging to capture but truly ties back to mission Measures direct results of your actions Examples Results of service to individuals (e.g. improved principal skills) Participant success rates Measures broader, systemic results of your actions Examples Community-wide results of services/ activities (e.g., overall academic improvement) System-wide reform

9. MEET U.S. IMPACT Assessment Intro Confidential – Do not Distribute NP STRATEGIES WHY IS IMPACT MEASUREMENT SO HARD? Mission success is not easily quantifiable whereas profitability is There can be misalignment in goals/objectives if mission is not clearThere can be misalignment in goals/objectives if mission is not clear Measurements can be misleading if they do not tie back to missionMeasurements can be misleading if they do not tie back to mission Outcomes are often difficult to ascribe to specific actionsOutcomes are often difficult to ascribe to specific actions Differing theories of change and management priorities can impact the measures used or valuedDiffering theories of change and management priorities can impact the measures used or valued

10. MEET U.S. IMPACT Assessment Intro Confidential – Do not Distribute NP STRATEGIES WHY IS IMPACT MEASUREMENT SO HARD? Tracking impact can be very expensive and time consuming, but it doesn’t need to beTracking impact can be very expensive and time consuming, but it doesn’t need to be Different constituencies require different measures or use different vocabularies, adding to inefficiencies in collecting and reporting measurementsDifferent constituencies require different measures or use different vocabularies, adding to inefficiencies in collecting and reporting measurements The “bottom line” of each nonprofit is different – no single measure or best practice has been establishedThe “bottom line” of each nonprofit is different – no single measure or best practice has been established

11. MEET U.S. IMPACT Assessment Intro Confidential – Do not Distribute NP STRATEGIES “WE KNOW WHEN WE HAVE PLAYED A ROLE, BUT WE DON’T KNOW THE EXTENT OF OUR CONTRIBUTION.” Kim Smith, CEO of New Schools Venture Fund

12. MEET U.S. IMPACT Assessment Intro Confidential – Do not Distribute NP STRATEGIES MEASURING PERFORMANCE Determine How to Measure Performance and Gather Information from Multiple Sources Use Results to Drive Decisions and to Build a Culture of Continuous Improvement Identify the “Drivers” of Change Select Criteria for Measures Attributable Usable Affordable “Capturable” Measurable Relevant Clarify Mission

13. MEET U.S. IMPACT Assessment Intro Confidential – Do not Distribute NP STRATEGIES MEASURING IMPACT – EXERCISE Mission: Model of Change: Main programs/activities: Activity MeasuresImpact Measures Organizational Performance Measures

14. MEET U.S. IMPACT Assessment Intro Confidential – Do not Distribute NP STRATEGIES PERFORMANCE MEASUREMENT IN USE Automate measurements wherever possible Where metrics are difficult  Develop milestones and manage to these  Invest in research to prove causality between activities and mission  Create microlevel goals that imply success at the macro level Include measurement tools and objectives in the design of new programs When possible, include cost of measuring and monitoring when calculating program budgets Use measurements and results in planning and strategizing Use results to “sell your story” – show causality, show impact, show organizational effectiveness and efficiency at meeting needs of constituents

15. MEET U.S. IMPACT Assessment Intro Confidential – Do not Distribute NP STRATEGIES COMMON PITFALLS TO AVOID Selecting measurements that are too hard to collect Not including program managers in defining, collecting and utilizing data Always looking at numbers in the aggregate (don’t forget to look at impact in terms of the people served) Confusing institutional achievements with mission achievements Using measurements as a report card on past performance rather than a guide for future actions