Measuring Performance and Impact
Measuring performance and social impact is essential to building an organization that not only meets the needs of a given community, but also chips away at the very root causes of a social problem. A prerequisite for any organization striving to achieve lasting social impact is a rigorous self-evaluation system, and a regular schedule for reporting results, both internally and externally.
Every organization should issue two types of progress reports, which we call dashboards and report cards. A dashboard is distributed internally to staff and board members and includes measurements to help an organization ensure that it is operating in an efficient, effective, and sustainable manner. A report card allows funders and other key stakeholders outside of an organization to monitor its progress and social impact. Organizations should use both types of reports to assess their performance and make improvements to hone their approaches to solving social problems.
While often perceived as expensive and complex, measuring performance and impact simply requires developing a limited number of indicators and tracking them diligently over a pre-arranged period of time.
Dashboards and report cards should include a combination of three types of indicators:
- Organizational health indicators provide critical insight into the stability of an organization, and measure its financial and organizational capacity to carry out implementation of its work. Such indicators may include the number of staff and volunteers, the total number of months for which the organization could operate using currently available cash, or rates of membership renewal.
- Strategy performance indicators track the short-term results and growth over time of an organization’s social-change strategies. Depending on the type of organization, strategy performance indicators could include the number of schools involved, events hosted, communities served, or individuals enrolled in a given initiative.
- Social and economic impact indicators document an organization’s progress in meeting its mission to solve a particular social problem. For example, an organization aimed at getting high school students into college would want to know what percentage of graduates of the program go on to enroll in a college or university. Of those, the organization will also want to calculate how many complete a degree, and possibly, the types of careers they choose and the average salaries they earn afterward.
Ask a Root Cause Consultant: It’s not easy to quantify the results of my organization’s programs. How do I collect the data necessary to evaluate our success?
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Rather than getting caught up in the “It’s impossible to measure what we do” argument, try following a few simple steps:
- Sit down with a group of staff or board members, and brainstorm a list of indicators that might help you evaluate your organization’s impact.
- Study your list carefully and delete any indicators that do not directly relate to your organization’s financial and operational health and the targeted social problem.
- Develop a survey with questions that will help you obtain the data you need, and determine how often to administer the survey. For example, ICE surveys participants once upon entering its small-business program, and every year for five years after graduation. It can be helpful to test your survey with a small group first, to make sure that the questions make sense to participants and capture data that you can use.
- Create a schedule and delegate tasks for collecting, analyzing, and reporting your data.
Tools for Practitioners
Our favorite tools on the Web.
InnerCity Entrepreneurs 2005 Report Card
An example of a report card issued by Inner City Entrepreneurs (ICE), Root Cause’s ‘streetwise M.B.A.’ program for urban entrepreneurs.
Assessing Social Impact in Double Bottom Line Ventures
Developed by the Double Bottom Line Project at Columbia Business School’s Research Initiative on Social Entrepreneurship (RISE), this report catalogs methods of assessing social impact for nonprofit and for-profit social ventures.
Measuring Innovation: Evaluation in the Field of Social Entrepreneurship
This 2005 report, prepared for the Skoll Foundation by the Foundation Strategy Group, documents a variety of approaches to evaluating social-entrepreneurial nonprofits, with the goal of helping new social entrepreneurs develop an effective evaluation process.
Measuring What Matters in Nonprofits
Published in 2001 in The McKinsey Quarterly, this article offers a brief overview of how to link metrics to your mission, and it’s full of helpful examples. The article is free, but it requires users to complete a short registration form to access it.