Part 1 – Measuring and reporting project impact in nonprofits

By - March 17, 2016

In today’s fundraising environment, donors are requiring a greater amount of transparency and engagement. They want comfort that their dollars are being spent efficiently and effectively to generate greater outcomes. From large foundations to individuals, donors are putting pressure on growing nonprofits to improve and update their processes and technology to satisfy their increased requirements.

As we emerge from an economic downturn, donors aren’t as trusting with provided financial information. Project success stories and annual reports have historically met the requirements of major donors. It can be difficult for organizations to meet these new requirements as it often requires an organizational shift.

It is important to not wait too long to establish loyalty and transparency. Nonprofits can suffer from reputation risk and donors may pull funding from projects or shift their focus to other organizations. Measuring and reporting is one of the most important steps but is often overlooked and undervalued. Creating a balance of speed with strong delivery is key.

One nonprofit that partnered with RSM was quick to recognize the need to measure impact, but in haste, they purchased and rolled out a technology platform that wasn’t properly implemented. The requirements were not defined and the platform lacked capacity to meet the complex projects and reporting requests. Equations to measure impact were so complicated that field staff, who often had limited understanding of English, didn’t report on the work that was being completed. In summary, the work was being performed according to donor requirements, but the lack of measurement and reporting cost the organization as they struggled to catch up.

Ask yourself a couple of questions to determine if your organization can be better structured to meet the changing environment:

  • What type of information do I currently provide donors? Are donors asking for different information? Are they asking for information in a different format?
  • Am I reaching my target market with my current campaigns? Is there an untapped market that we would like to reach?
  • Have we lost funding due to lack of transparency?
  • Can we provide quantitative information about our projects, or are we only able to tell stories?
  • Is our current technology platform able to collect, analyze and report to our donors?
  • What level of skill is needed to measure and report? Are there people currently staffed who are capable?
  • Is our process structured so that we can quickly gather and provide information?

In part two of this series, we will discuss how to connect your people, processes and technology to measure and report impact.

To learn more about how RSM can assist you with your other business needs, contact RSM’s management consulting professionals at 800.274.3978 or email us.

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