The Value of Metrics are found in Measuring, Not Counting

The Value of Metrics are found in Measuring, Not Counting

March 06, 2012 by jga_admin

by Dan Schipp

 

Metrics have been on my mind lately. Maybe it’s because we are assisting several clients with strategic planning and helping them develop measurable objectives and a dashboard of strategic indicators.

Maybe it’s because in feasibility studies, more and more, I hear prospective donors asking, “How are they going to gauge their impact?”

Or maybe it’s because I am looking forward to Jim Hodge’s lecture at the end of this month on the topic, “If philanthropy is all about relationships, why do metrics only measure money?” (More on this lecture later.)

There is no denying that we are in an age when donors and other stakeholders expect greater accountability and measurement of performance from nonprofit organizations.

They not only want to know what the organization is doing but the impact it is having on the issues or needs it was established to address.

They want to see performance and outcomes data. It’s not just a matter of tracking the standard measurements of dollars raised, number of donors, membership growth, number of people served, and cost per dollar raised.

There are a couple other things to keep in mind.

Measuring is not the same thing as counting. Measuring involves determining the magnitude of something in regard to some standard. Counting is just adding up.

As Steven Mc Laughlin, director of internet solutions at Blackbaud, said at the Association of Fundraising Professionals international conference a couple years ago, “Counting doesn’t actually count for very much. As it turns out, when you count things, you’re usually successful. That is not always true when you start measuring things.”

In measuring, the focus is on lessons to be learned and improvements to be made. Measuring requires asking questions like, “What was it in the past? What is it today? What should it be in the future? How do these results compare to those achieved by similar organizations (benchmarking)?”

And these questions need to be asked in regard to how the organization’s programs are fulfilling its mission, how successful it is in mobilizing its resources, and the staff’s effectiveness in carrying out the organization’s work. As you look at how your institution or organization is tracking performance, are you measuring or counting?

Two other important things to keep in mind in regard to metrics are that you cannot measure everything and what you do measure should be tied to your organization’s strategic plan.

In developing a “scorecard” for monitoring your organization’s performance, you will want to build it around the goals of your strategic plan.

Another option is to build your plan around the categories that are often included in a nonprofit’s scorecard:

  1. revenue/funding;
  2. resource allocation;
  3. service delivery;
  4. donors and board members;
  5. internal operations; and
  6. staff development.

 

Now about that lecture . . . if you are in Indianapolis on March 22, I encourage you to attend the ninth annual Thomas H. Lake Lecture sponsored by the Lake Institute on Faith & Giving.

This year’s lecturer is James M. Hodge III, vice chair and director of principal gifts for the Mayo Clinic. I am looking forward to his thoughts on philanthropy metrics that go beyond measuring money. For more information and to register, please visit: www.philanthropy.iupui.edu/LakeFamilyInstitute.