At EMH, we are firm believers that your non-profit should be run like a business. We have previously discussed ways to ensure financial sustainability, ways to get the most out of your brand, as well as the importance of implementing metrics to measure impact. Measuring performance is one of the more important aspects in ensuring that your non-profit runs like a business. By implementing Key Performance Indicators (KPIs) your organization will be able track progress with quantifiable metrics to guarantee that your actions will always reflect your organizational goals.
Using KPIs for Success
Using KPIs allows a great amount of clarity and communication. Specifically, they help funders understand your goals, which lead them to develop trust in not only your mission, but also your ability to carry that mission out. By making a commitment to implement KPIs you are able to show that your organization is making a sustained impact, and that there is a positive relationship between your activities and that impact. Finally, KPIs are of great use with respect to internal operations. A robust system of metrics ensures that any strengths and weaknesses of your organization are apparent, which will go a long way towards maintaining a sustainable union.
KPIs are by no means a glamorous aspect of business, and you may face significant challenges as you attempt to incorporate them. Perhaps the most difficult problem is actually creating measurable KPIs. Social impact can be difficult to define and measure and by definition KPIs need to be measurable. However if you do not thoughtfully consider how you plan on measuring your impact, you may ultimately drift away from your organizational goals. In many instances, social impact differs greatly between organizations, and you must be able to develop metrics that are specific to your mission.
Once you are able to hurdle the actual creation of KPIs, it easy to fall into the habit of not measuring diligently. As other needs arise you may deprioritize impact measurement. Specifically, as your goal’s programs shift over time, you just may not have the time to consider whether or not your metrics are actually useful. As a mission driven organization a great degree of your success is the ability to document that you are effecting change. By implementing and revising your KPIs periodically, you can ensure that there will be no questions about if your actions are in line with your mission.
Many of the problems associated with measuring progress can be resolved with a few simple steps. First, be sure to assign a staff member to measure each KPI. They should be evaluated for their relevance in addition to merely collecting data. Second, KPIs should be reviewed frequently at staff and board meetings. Briefly touching base makes sure that your team is reminded of the commitment to quantifying impact in all areas. Finally, develop a balanced scorecard, such as the one below, with short-term targets. This allows you to have a reference point to guide your analysis.
At EMH strategy we firmly believe that non-profits are best served by implementing tactics that will enable them to function like businesses. Simply reviewing your organization’s mission statement and the problems that your organization addresses, assessing your current capabilities, and determining short-term and long-term goals is simply not enough. You should also be able to build out key performance indicators that are related to your organization’s desired outcomes. These simple steps will ensure goals are reached and that your non-profit is able to sustain itself for the future.
Andrew J. Albert