The why and how of proving nonprofits’ impact on the community

Community nonprofit organizations, such as Boys and Girls clubs, domestic violence shelters, food pantries, senior centers, and Head Start programs, provide critical services to our communities. These organizations rely on grants and funding from the government and charitable organizations. Increasingly, investors are wanting to see clear evidence of how their funds are being used to help the community. Proving the impact their organization is having on the community can be tricky for nonprofits, that typically operate with a lean team wearing multiple hats. It’s important for nonprofits to understand this issue and how prioritizing changes to their reporting systems can enable them provide proof of their impact to investors.

Escalating funder expectations

Organizations that issue grants to nonprofits have moved more toward “outcome-based funding.” Outcomes can be difficult to measure versus traditional outputs. Outputs could be the number of meals served, number of seniors who visit the center, etc. These are easier for nonprofits to measure, and they typically already have systems in place to keep track of these. However, outcomes are a lot more challenging to track and measure. Outcomes could be increased grade point averages (GPAs) of youth served, decreased loneliness and overall wellness scores of seniors using services, or increased kindergarten readiness scores for Head Start participants. To continue receiving grants, nonprofits must treat measuring outcomes and impact data as non-negotiable.

Shortage of evaluation skills and staff capacity

Nonprofit organizations typically operate as efficiently as possible in order to maximize funding directed to their mission. This means staff members are often doing many different jobs and adding new data collection requirements could be challenging and overwhelming. However, for the organization to fulfill their mission, proving impact through data is critical. Helping staff members to understand this point can help gain their buy-in. Providing employees with free or low-cost courses and training will also help them feel more confident with these additional job requirements.

Priority solutions to close the gap

Nonprofit organizations can begin small by implementing a few new practices to increase their data collection and reporting capabilities. If budget allows, there are different data systems for tracking outcomes that organizations can implement. This will help increase metric tracking consistency across the organization. Organizations can also lean on external expertise and partnerships for data collection and measurement. Local colleges and universities may have students who can help organizations design and implement strong data collection practices. Organizations should also use their data and results for storytelling and continuous improvement. This shows employees and investors alike that these new practices are important and are being used to help the nonprofit serve the community as well as possible.

For nonprofit organizations who rely on grant funding, proving their results with real data is the key to sustaining impact. Despite the challenges of gathering and using this data, it’s a critical priority and will help organizations not only obtain the grants they need but also develop and implement more effective programing for their communities. Organizations can start small with their data capabilities and slowly build towards a robust data collection and utilization program.

Sources

National Council of Non-profits

Grants Plus

National Council on Aging

Small Biz Daily