MEASURING NONPROFIT OUTCOMES
I was surprised to discover a vexing problem most nonprofits face. Although most have clear statements of mission, very few have developed performance measurement systems that reveal the impact their organization is having on its mission.
Nonprofits are encountering increased competition from a proliferating number of agencies, all competing for scarce donor, foundation, and government funding. These benefactors are no longer satisfied with reports that focus on financial measures, such as donations, expenditures, and operating expense ratios. They are interested in metrics that measure positive core-mission outcomes. Financial considerations are not a nonprofit's primary objective, they say. They now want to know how efficiently and effectively a nonprofit is meeting the needs of its primary constituents.
Forbes magazine once noted that nonprofit organizations lack the simple elegance of a financial measure, such as profitability or shareholder returns, used by for-profit organizations to assess their performance. Forbes also observed that "nonprofits have difficulty developing surrogate quantitative measures of organizational performance...because they frequently have goals that are amorphous and offer services that are intangible" (Forbes, 1998, p. 184).
Clearly defining the metrics for nonprofit organizational effectiveness is a challenge that has become more immediate as donors change their view of nonprofit missions. By embracing a few new concepts, nonprofits can change their understanding of strategy, mission, and outcomes.
1. An agency's "mission" should reflect a long term objective such as a reduction in poverty, illiteracy, malnutrition, homelessness, disease, pollution, or discrimination.
2. A nonprofit must define who its customer is. In a nonprofit, donors provide financial resources but constituents receive services. In terms of the mission, which one is the customer? Maybe both.
3. Agency management must break down long term strategy into short term initiatives and assign specific initiatives to each employee.
Here at Global Vision Technologies we have designed a fully customizable software program that enables every member of a nonprofit organization to measure mission-centric outcomes and report results in real time to management.
FAMCare software can be customized to:
§ Keep a clear and simple strategy statement in front of every worker, every day.
§ Define and measure mission outcomes for each individual client.
§ Establish a personal mission focus for each social worker.
§ Measure outcomes based on the organization's mission.
§ Collect mission-centric outcome reports daily from the entire organization.
§ Create an annual report that focuses on progress toward long-term goals.
When using FAMCare, accurate and powerful outcome reports practically write themselves.
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