As a fundraising professional, it’s easy to get caught up in the day-to-day work of planning campaigns, building relationships with supporters, and making donation requests. Focusing on all these moving parts may sometimes leave you wondering, “Is our fundraising work truly making a difference to our beneficiaries?”
In other words, you may wonder if your efforts, (or, more broadly, your organization’s programs or services) are having a positive impact on those you serve. To answer that question, you need to engage in careful impact measurement.
To help you get started, let’s tackle a few frequently asked questions about impact and how nonprofits can measure and manage it.
1. What Is Impact Measurement?
Impact measurement is the process of evaluating different aspects of your nonprofit’s operations, such as your programs, services, or large-scale projects, to determine how effectively your organization is delivering its intended results or benefits to its community.
Measuring impact allows you to look beyond the outcomes of everyday tasks to the lasting effects of your nonprofit’s work. For instance, say your nonprofit is an animal welfare organization on a mission to provide shelter for pets in need and help them find their forever homes.
With the right methodology, you can break down your core mission into smaller objectives (e.g., deliver an effective first-time pet owner educational workshop) and gather data that helps you measure your progress toward accomplishing those objectives (e.g., workshop attendance rates). Then, with this concrete evidence on your side, you can understand your impact and confidently share it with your community.
2. Why Is Impact Measurement Important for Nonprofits?
Impact measurement is important not only for your internal team but also for those who support your mission. Let’s explore some of the specific benefits on both sides.
Benefits for Your Organization
Enhanced Accountability
Nonprofit work depends on the trust between an organization and the people who keep its mission moving forward. This is why staying accountable and being transparent with your supporters are essential skills nonprofit leaders need to learn. By tracking your impact, you can be transparent with your supporters about what is going well and what needs improvement at the organization.
Informed Improvements
Guessing what will make your services more effective or your programs more popular can lead to resources being allocated improperly or important initiatives getting pushed to the back burner. When you’re consistently measuring your impact and producing data that shows you how you’re progressing toward your goals, you can put the guesswork aside and make informed decisions about how to improve your operations. Over time, this will allow you to sustainably grow your organization and its work.
Improved Employee Morale
For your employees to stay engaged and motivated in their roles, they need to know that the work they’re doing every day is leading to positive outcomes for the beneficiaries your organization serves. Impact data helps assure them that what they do matters and can encourage them to continue performing to the best of their abilities.
Benefits for Your Stakeholders and Supporters
Better Organizational Governance
Your board of directors needs a clear picture of how effective your organization is in order to govern it in the best way possible. By sharing impact insights with your board, you can ensure that their decisions and recommendations will align with what is best for your nonprofit and the people it serves.
Strengthened Relationships
To feel confident that they are giving to a cause that matters, your donors, volunteers, and sponsors need to know about your organization’s impact. When you can tie their contributions to meaningful outcomes for your beneficiaries, your supporters will be motivated to continue giving and engaging because they’ll feel like what they’re doing is truly making a difference.
Meaningful Recognition
Which is more meaningful: Saying a general “Thank you!” or saying “Thank you for your donation—because of you, we were able to take in 10 more dogs in need at our shelter!” If you chose the second option, you’re correct! Being specific in your recognition and appreciation efforts by including concrete metrics makes them more rewarding for your supporters.
3. How Can You Start Measuring Your Nonprofit’s Impact?
To find accurate and useful impact information, you’ll need to take a strategic approach to measuring your impact. Here are five steps you can follow to get started.
Define the Objectives You Want to Work Toward
Your objectives are the numerous smaller goals that will help you accomplish your organization’s larger mission and realize your larger vision. To continue with the animal welfare nonprofit example, here are a few examples of objectives:
● Increase the size of our shelter to house more cats and dogs.
● Increase community access to our free spay and neuter services.
● Strengthen relationships with local pet retailers and other sponsors.
Select Key Impact Indicators (KIIs)
Similar to key progress indicators (KPIs), KIIs are the metrics that show you how much progress you’ve made toward an individual objective. You can track more than one KII for each objective.
For instance, if you were to focus on the last objective listed above, you might select the following KIIs:
● Objective: Strengthen relationships with local pet retailers and other sponsors.
○ KII: Number of quarterly touchpoints with local pet retailers.
○ KII: Percentage of renewed sponsorship agreements
○ KII: Percentage of sponsors who reported a positive experience with our nonprofit in our annual sponsorship survey
Collect Data
Next, gather data on your chosen KIIs that will show you how much progress you’ve made toward your objectives.
Start by looking at the data sources you already have access to, like your nonprofit’s database. If you need to supplement your data, consider collecting additional data yourself or using external tools or services. Publicly available data (such as studies conducted by academics or government agencies) can also be useful.
While quantitative data (data that can be given a numeric value) will certainly play a big role in your impact measurement efforts, don’t overlook the value of qualitative data, which is data that takes a descriptive or narrative form. Qualitative data can add color and depth to quantitative insights.
Analyze Your Data
Next, you’ll analyze your data for patterns and trends that tell the story of your progress toward your objectives. This step can quickly become complicated, so many organizations choose to leverage the services of a data scientist or use an impact measurement platform.
Report Your Impact Insights
Once you have a clear view of how your organization is progressing toward its objectives, you can create an impact report summarizing your findings. You can then use this information to inform your operations and share it with your stakeholders and supporters.
4. How Can Impact Measurement Boost Your Fundraising Efforts?
As mentioned above, impact insights can help you strengthen various parts of your nonprofit’s operations, including its fundraising program.
Specifically, when you can share the story of your organization’s impact on its community, you will find it easier to:
● Attract donors as you weave impact information into your marketing materials, showing that your nonprofit is a reputable organization whose actions have a positive effect on the community.
● Inspire giving as you demonstrate what your organization can do thanks to the generosity of your donors, volunteers, sponsors, and grantmaking organizations.
● Plan and execute your campaigns and events knowing what has worked well in the past to help you connect with donors and what could use refining.
Impact measurement is key for organizations that want to know just how well they’re driving their missions forward in the community. It can be a tricky process to get started with, but with the right methodology and tools on your side, you’ll soon have the insights you need to improve your operations, strengthen relationships, and keep doing more for the people you serve.