Why You Should Be Measuring Your Philanthropic Impact And Outcomes
Impact and outcomes measurement have been popular buzzwords in the philanthropic community over the last few years. But what does measuring your organization’s impact, outcomes mean? Why is it necessary to measure the value of your investments, and what data do you need to ensure your measurement process provides accurate, meaningful results?
In this article, we’ll look at the concrete advantages for your organization and your stakeholders of implementing a measurement strategy. We’ll also share the importance of tracking the right data, creating a strategy, and offer some tips on getting started.
Measurement shows how you’re driving change
The National Council of Nonprofits is among the many organizations that believe philanthropic organizations are not only responsible but also accountable to the communities they serve. It’s important to demonstrate to your stakeholders (whether they be donors, board members, government agencies, etc.) how the work being done is effective in helping achieve your organization’s mission. By sharing how you are tracking and reporting on the results of your programs, you greatly improve transparency and clearly communicate exactly what you’ve done to reach your goals. But first, you need to decide how the data you track can be used to create reports that prove you are indeed being impactful.
“The trend is towards understanding how to actually measure the impact your foundation is having on the world,” says Kristian Mørk Puggaard, Managing Partner of DAMVAD Analytics, a SmartSimple partner with offices in Denmark and Sweden. “You may feel that you are driving change, but may not be making as big a difference as you think. With the appropriate strategy in place, you can better understand your impact, and begin to change your behavior to improve that impact. Comprehensive measurement practices also give you the ability to influence the behavior of your grantees and help them do even more good with the funding you provide.”
There is a difference between measuring impact and measuring outcomes
“The difference between measuring impact and measuring outcomes has much to do with the various stages of the granting process,” continues Kristian. “Starting with the initial input, the resources allotted at the start. Next comes the activities, which look at how you plan to achieve your goal. The output phase takes a look at how well your programs performed, followed by the outcome of this work and what was ultimately achieved.” But even if your projected outcome was achieved, that’s no guarantee of a successful outcome.
“Impact measures what was actually changed based on the effect of your activities and outcomes. This speaks to the overall change made thanks to the other phases of the work you’ve done.”
One global family foundation that has been providing grants for more than 30 years, created a tool they’ve shared with the philanthropic community. The Data Playbook, available on Creative Commons, a website for the sharing of ideas and resources by organizations around the world. This playbook outlines a 5-stage logic model (also known as logical framework) with a toolkit any organization can use to get started on the road to impact and outcomes measurement. Let’s take a closer look at their strategy.
The 5-stage logic model
“The difference between measuring impact and measuring outcomes has much to do with the various stages of the granting process,”
This measurement model acts like a framework to outline your organization’s goals, and how to track your progress in 5 stages:
Impact: What measurable change are you seeking to achieve in the long term?
Outcomes: What measurable change are you seeking to achieve in the short to intermediate term? What would indicate that you are on your way to accomplishing your long-term goals?
Outputs: What tangibles can you measure immediately following the program?
Activities: What are the actions that you need to perform to successfully run the program?
Inputs: What resources (money, staff, technology) do you need to invest in the program for it to be successful?
For example, if you want to improve the literacy rates of children in a particular community by 35% over the next 5 years:
Decide what impact you want to make
Identify what outcomes will prove success
Determine the outputs that can be measured quickly
List the activities needed to ensure success
Compile the inputs needed to get started
Next, you would need to decide how many children to involve, and what activities can be undertaken to make the most of your resources. This leads to the actual education of the children and using the tools obtained to engage the kids in learning to read.
Once this stage of the process is complete, you’ll know how successful you were by the number of students that are now able to read that weren’t before. Does this number correlate to the percentage you were hoping to achieve at the start? Did you get close to 35% or even exceed your goal? After you’ve quantified this number, you can look forward to seeing how those children put their reading into practice. Are any of them teaching others to read? Did any of them attend college or university to further their education?
Lastly, we get to the impact. This is where you can assess what the long-term achievement was. In this case, it may well be that of the 100 kids that participated in your initiative, 75 obtained post-secondary degrees and now have full-time jobs. In addition, they are teaching their own children to read, leading to an ongoing change in how this community educates future generations.
This is just one example of a long-term, measurable impact that demonstrates to your stakeholders precisely how well you met your goals and what this means for the future. Yet, while this is all well and good, we still need to consider how to actually ensure you’re gathering the right data to ensure you prove accuracy, and therefore the value, of the impact you’ve made.
A question of data
In the for-profit world, success is measured by how much money a company makes. Depending on the organization’s goals, other measures may be included in the overall determination of success, such as the impact of environmental initiatives, equitable employment practices, customer satisfaction, or improvements in product quality. For nonprofits, the challenge is knowing what data you need in order to measure impact and outcomes.
Using the example of a community reading program, we can see how quick and easy it is to collect a large amount of data. For example, you’d need to have gathered:
The names of the children
The ages of the children
The number of children living in the community
The overall population of the community
The reading test scores
The number of books each child read
The total number of books read by all the students
“A good number of foundations have no strategy and really aren’t thinking about why they collect data or how to define and use the data they do collect."
This is just the tip of the iceberg. You’d need to continue collecting information on students that went off to pursue post-secondary education, what kinds of jobs they qualified for if any of them moved from the community. The list can get quite long and even become overwhelming. This is regular challenge for all sizes and types of nonprofits, even those that already understand the vital importance of collecting data.
“A good number of foundations have no strategy and really aren’t thinking about why they collect data or how to define and use the data they do collect. There may be a discrepancy between what the administrators of your foundation versus your stakeholders hope to get out of the information. It’s also very time-consuming to gather information without any goals as to how you will use it,” adds Kristian
How does a foundation then begin to form a workable strategy that resonates with their community?
“The best idea is to work closely with your stakeholders to define what your goals are, then start collecting the appropriate data that will meet your strategic goals and help you measure impacts and outcomes,” says Kristian.
You don’t need to be an expert in data measurement to get the process going
Every new initiative needs to start somewhere. But even if the whole idea of data collection and measurement seems overwhelming, it may be worth your while to take a few small steps to get the ball rolling.
“Even for small foundations, getting started doesn’t need to be complicated or take too long to do. The point is to simply get started. Begin with what it is you’re doing, why, and what indicators you need to make an impact strategy. It shouldn’t take any more than a month to get the data together. You don’t need anything too detailed to start. Decide what indicators you need, then start collecting that data from the organizations you fund,” concludes Kristian.
You may even be further along the road to impact and outcomes measurement than you think!
"The point is to simply get started. Begin with what it is you’re doing, why, and what indicators you need to make an impact strategy."
“If you already have your activities and the relevant output, making the connection between researching your data and collaborating with your peers shouldn’t be too complicated to get yourself started. Get foundation leaders involved and moving towards comprehensive measurement. And ensuring you have an effective data collection process is vital. This can be achieved through a good system that takes your information, tracks it, and keeps it stored in an organized fashion. That will make it much simpler to extract the necessary details and create thorough reports for your stakeholders that clearly indicate what you have achieved,” concludes Kristian.
Meaningful outcomes and impact measurement isn’t an impossible task; any organization can isolate the relevant data required to get started. All you may really need is the desire to start and the curiosity to find out how much good work you’re actually doing. Supporting your measurement activities can also be made easier with one of SmartSimple’s all-in-one grants management systems. Take advantage of powerful reporting capabilities while using our complete tracking, budgeting and collaboration tools. Request a demo today to see what SmartSimple can do for you.