I love this post from Tom Claffey of The Philanthropy Desk. The mission statement of a nonprofit organization is its north star. The reason the nonprofit exists is to fulfill its mission. If the need didn’t exist, neither would the organization. As leaders, we tend to look ahead to the next big thing. Vision is an important part of leadership, particularly at the executive level. But it’s hard to have a clear vision when you aren’t clear on your current impact. 

I was in a seminar last week with about 20 major gift fundraisers. One of the presenters expressed her frustration with the focus on impact in the nonprofit sector. She was tired of hearing about it. I cringed. Everytime she opined on the topic, I wondered how she evaluated mission fulfillment without measuring impact. 

If you’ve been around for the past year, you know my passion for impact-based fundraising strategies. If you’re new, check this out to get up to speed quickly. I’m going to take us in a slightly different direction today and discuss why measuring impact matters from the leadership perspective outside of fundraising. 

Every nonprofit’s purpose is driven by strategies that have action items aimed to achieve specific outcomes. For example, if your mission is about restoring coral, you would have programs to regrow coral and action items to replant and monitor progress. You might employ different methods of cultivation in coral nurseries to test which technique works best with your species and environment. There are a limited number of possible outcomes, strategy A works best, strategy B works best, they both work the same, or neither work. If you don’t measure the effect of both strategies how do you make a decision on the best way to grow coral? Applied to a scientific environment this logic makes a lot of sense. Social impact is also a science. 

You’ve heard the term data-driven decision making? This is when you use information gathered to help make a decision that advances the organization. Using the coral example, if strategy A worked better than strategy B, you might decide to pursue that avenue to achieve the best results when coral farming. The real question is, why did you make that decision? You’re probably thinking, well, you just told me, strategy A grows more coral. That would be correct but it’s not just the decision to grow coral at the moment, it’s the long-term impact that employing strategy A will have on the organization’s mission. 

Impact fuels our why in the nonprofit sector. It’s how we demonstrate mission fulfillment. Impact is a report card that is different from a balance sheet. It’s not how much money you raised, or how many times someone clicks your website; impact is what you actually did to make a difference. If your goal is to grow more coral, how much of the coral that you grew using strategy A survived when you replanted it back on the reef? That is your impact. 

The ability to demonstrate impact builds trust and allows for strong data-driven decision making. Impact measures more than effort, it measures outcomes. When you measure impact you can share with your board and stakeholders demonstrated progress toward fulfilling your mission. Impact builds trust and allows donors to see how their philanthropic investment moved the needle for a cause they care about. Impact isn’t a vanity metric, it’s the metric that matters most. 

So how do nonprofit organizations measure impact? We’ll tackle that in part II next week!