How Do Nonprofit Organizations Measure Their Success? Your Questions Answered.
It’s been historically difficult for nonprofits to measure their success since your success is based on how much good you do with your cause. Measuring the good in the world typically involves more subjective metrics, which make it difficult to show a potential donor a number or a pie chart. But with the right tools, measuring nonprofit success becomes far easier and far more demonstrable!
Since there are often limited data points to measure, you will need to come up with a system that works for you, your organization, and will optimize the factors that are directly contributing to your success. A tool like a membership management software can assist in creating quantifiable goals through member retention and new member orientation.
Here’s what we will cover in this article:
- Why It’s Important to Track Your Success
- How to Start Measuring Your Success
- Compare Previous Years’ Data
- Universal Factors to Help Measure and Improve Your Results
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Why It’s Important to Track Your Success
Maybe you’re reading this article and thinking, why should I even bother with the efforts to track nonprofit results? It’s important to track your progress rather than go off intuition because actual tracked data will show you whether you’re succeeding or not.
Operations are Optimized
For one, it helps make sure your operations are optimized. You can look at the number of volunteer hours accumulated and what tasks got done.
For example, let’s say volunteers spent three hours on mailings for an upcoming event. This volunteer work will surely lead to a number of people attending the event. However, could you speed up that process by reaching out for more emails from a membership database and going that way rather than traditional mail? Not maybe, 100%!
Maximize the Efficiency
In addition to optimizing your operations, you know better than anyone that resources are thin in the nonprofit world. It’s important to maximize the efficiency of money, time, and supplies. By looking for ways to improve the way you work, more money and time can go directly to the cause that you are fighting for.
Amplify Your Impact
That leads us to the last reason it’s important to track your success: You will amplify your impact. When it comes down to it, the ultimate goal is reaching more people with your message and services. Whether your group focuses on donations or education or even on volunteer time. If you become more efficient at evaluating your success, you can create a bigger impact in your community, and increase membership in turn.
Pro Tip: Want to amplify your impact and maximize efficiency? Spend time developing a membership communication plan to truly help reach more individuals through email, social media, and more.
Suzanne is loving her
optimized time and effort!
How to Start Measuring Your Success
The problem with measuring success in nonprofits comes down to one ultimate thing, that every nonprofit is different! You and your organization are unique compared to every other organization out there. Because of this, the ideas present in this article are universal guidelines, but it is important that you tailor them to the specific needs of your organization.
Compare Previous Years’ Data
Some examples of KPI’s (or key performance metrics) you can track year to year are:
Number of members added to your organization
The amount of money made this year
How much money the organization donated
The percentage of donors who also actively attended events
The number of volunteer hours logged
Amount of money spent on supplies and events
The number of "Welcome New Members" emails that were opened
You can use multiple categories or just start with one or two. Don’t overwhelm yourself out of the gate. Measure a couple of items and be as detailed as possible and then go from there. Not only will these metrics help you measure effectiveness, but also trends within your nonprofit too.
Create Annual Objectives
Next, create tangible and realistic objectives for the next year. If you look at profit and membership from the previous years, create goals based on that data.
Examples could be fundraising $10,000, or applying for three grants, or adding 10 new members. Goal setting is all about creating objectives that can be reached if you work for them.
Pro Tip: Just don’t make them so impossible that you start to feel like reaching them is a hopeless endeavor.
Bertrand is feeling good about
his annual objectives.
Determine and Measure KPI’s
Once you have the goals, you can determine and create many KPIs to help measure the progress and success of the goals you set. KPI’s stands for "key performance indicators" and is a quantifiable way to measure how you’re doing.
Define what key performance indicators you’d like to measure that best fit your organization and what they mean. For example, if you’re going to measure how many members you’re bringing on in the next year, set a date range and several members that you want to reach. That will be one of the important KPIs that you track.
Then, put processes in place to track the inputs and outcomes. For tracking memberships, a membership management software (like Springly!) could be a great option for you! Set up a regular reporting cadence (ex: monthly, quarterly, yearly) to keep track of the data and make sure you’re on track.
Universal Factors to Help Measure and Improve Your Results
Now that you have a basic understanding of why to measure for success and how to do so, let’s look at different data points that you can focus on. Remember, each organization is unique and what works for one nonprofit, may not work for another. There will be some level of trial and error in measurement and improvement, but it is worth it in the end.
Measuring Your Time
Understandably, you may look at measuring time and think, "But I want to give as much of my time as possible to this cause! I give my time freely because it’s my passion." However, your time is valuable and is an important metric to follow. After all, it is years of learning and hard work that have led you to have your particular expertise. How much is one hour of your time worth? Look at how long it takes you to do certain tasks and how you can create efficiency within them.
By taking a measurement of "time per program" you can view exactly how much of your time is dedicated to a specific program or event.
For example, if an event is taking dozens of hours of your time, but its impact is low or not well attended you may want to spend less time on the event in the future. By tracking time you’ll have the capacity to calculate ROI on events too.
By measuring members' time involved with your nonprofit you can accurately know if members are engaging with your nonprofit or not.
Similarly, by measuring the number of volunteer work hours you’ll be able to gauge over time if your volunteer base is growing or diminishing,
Avoiding Member Churn
This is the key to many nonprofits' success. Welcoming new members is always more costly than retaining the ones you have. You want to have low member retention in your organization.
What is the best way to do this? The way to do this is to make sure your members are happy. Send out quarterly surveys to gauge how they are feeling their time is being used and if they are still engaged in the organization.
If you do notice turnover and churn in your nonprofit, you need to take some time to find out what the core issue is. It may take time, but evaluating the efficiency of your membership program is a worthy time investment. Keeping your members happy and involved will lead to additional success!
Matt is avoiding churn by checking in
on the health of his members!
Preventing Staff Turnover
On a similar note to member retention is staff retention. It’s costly to have to go out and hire someone new rather than to keep who you have. If you lose a good staff member, then you have to go out and recruit, interview, and fully train a new person to handle the responsibilities of the person who left. That means time is taken away from your list of normal duties.
If you’ve ever had to retrain someone, you can understand how challenging it is. By retaining your qualified and efficient staff, you are making your organization more efficient which turns into greater value to whatever you are working toward like donations for research.
Having a proper knowledge transfer system can also help you retain staff for the long term. One aspect of knowledge transfer is the process of training staff on the tools and procedures of your nonprofit. By helping a new employee not only understand but become proficient in the tools, systems, activities, and programs of your nonprofit they’ll be better equipped to do their job.
Employees that feel equipped for the work will not only do a better job, but they’ll be less stressed and more productive. Properly trained employees are less likely to get burned out and leave.
Focusing on High Customer Satisfaction
Everyone knows that keeping customers happy is a part of the roadmap to success. But, how does that work in the nonprofit sector where you don’t have traditional customers? Easy! Your customers are your members. This goes hand in hand with member retention.
A membership management software can assist you in looking at the data for retention and new members. In order to gauge how happy your current members are, make a phone call to some of your more active members! By holding a conversation and asking the right questions with members, you can get an idea of where everyone is at and you can also see what they want to see more of. It never hurts to ask for suggestions too!
Happy members mean high retention which means nonprofit success.
Evaluate if Your Business Model is Sustainable
When it comes down to it, successful nonprofits are ones that learn and follow some practices from "for-profit" businesses. When they are small and just starting out, they adopt principles and processes that can scale as they grow. You don’t want to focus on quick wins, but rather you should put your effort into the long run.
Do an evaluation of your business and ask the following question. Where will your organization be in 5 years? In 10? What about 25?
It may seem a little strange, but the truth is that you need to look at your nonprofit like a business. Sometimes, revenue matters just as much, if not more, than impact. That can be hard to digest.
Think of it this way. If your organization isn’t making money to cover the costs of being in business, you can’t make any impact. By taking the steps to guarantee that you can cover the costs of staff, equipment, events, and other expenses, you are planning to be a well-focused organization that will reach whatever goals you set.
Take a data-driven approach rather than only using your intuition and you will see the success that comes along with it. It takes time, effort, and trial and error, but you will get there.
Sam is taking a close look at his
business model's sustainability!
Optimizing your behind-the-scenes operations will lead to added profit. Let’s face it, time is money. It’s cliché, yes, but it’s true. The more efficient and automated you can make your system, the better off you’ll be. This could mean using a software like Springly that offers membership management and other tools to help drive success.
When determining how to measure the success of your nonprofit organization, there are multiple factors to look at. Each nonprofit is unique and has its own goals and mission, so the ways you measure success will be different from other organizations.
Luckily, some universal factors can be applied to any nonprofit: measuring your time, avoiding member churn, preventing staff turnover, focusing on high customer satisfaction, evaluating if your business model is sustainable, and optimizing your operations. By using a combination of these tools, you will find your organization on the path to tangible and scalable success.
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Why is measuring success important?
Measuring success allows you to optimize your time, money, and allocation of resources efficiently. In doing so, you are better positioned to achieve every nonprofit's ultimate goal: Maximizing social impact. Also, being able to track your progress keeps you focused on achieving your organization's own long-term objectives, whatever they may be. Find out more.
🗝️ What are some important KPIs for nonprofits?
The number of new members attained, the amount of funds generated, and the amount of money spent, are among the most important KPIs to keep track of from one year to the next. Some additional KPIs, which are just as important, include: Number of volunteer hours logged, member churn rate, and customer satisfaction scores. The exact KPIs you use depends largely on the setup of your organization. Find out more.
🔥 What are some ways to improve the performance of your nonprofit?
Avoid member churn by welcoming new members and being attentive to the needs of existing members. Implement a well-designed knowledge transfer system to prevent staff turnover and help your staff become proficient at their jobs. You can also measure your time and use the resulting data to deduce ROI measurements - this is a great way to facilitate strategic decision making. Find out more.