Your guide to KPIs for non-profits
The push to become “data-driven” is taking over most organizations these days. Chatter about “big data” and the relative ease with which companies can access metrics related to their business has everyone jumping on board.
Well, nearly everyone. Non-profits have traditionally lagged behind their for-profit counterparts in adopting a data-driven approach to doing business, putting them at an inherent disadvantage in monitoring success and identifying improvements.
Here’s the good news, though. It doesn’t have to be this way. There are lots of opportunities for non-profits to join the business world in using data to drive performance. Where should your non-profit start? By adopting some KPIs.
Measuring impact through KPIs
There are a lot of ways to measure the success of a non-profit. But most of them revolve around one theme: Impact.
Say you’re a charity that’s trying to develop a cure for a disease. In this instance, your impact would be measured by how much progress you are making towards finding a cure. Or say you’re an advocacy organization that works on behalf of members to influence the political and cultural climate in which they operate. In that case you’re probably more interested in the impact you’re having on the conversation about your topic, say in newspapers or at the legislative level.
Describe it how you want to. But the idea is the same. The more you can do to alter the landscape in which you operate beyond what would be happening if you didn’t exist at all, the more you can claim to have found success.
How not to measure success for non-profits
The temptation for many non-profits is to focus exclusively on revenue and donation metrics when deciding on KPIs. The reasons for this are understandable: Every organization needs money to operate, and non-profits are no different. Competition for donations is fierce, and non-profits need to hue to a well-defined strategy to bring in the revenue they need to follow through on key goals. If they can’t get people to donate, then they’re not going to be around to make a difference in their chosen areas.
But the problem with treating revenue metrics as KPIs is that it can cause your organization to lose sight of what it’s really trying to accomplish. All of a sudden revenue stops being a means to an end and instead is treated as the final goal.
By all means, it’s important to adopt some metrics for fundraising. The money needs to come from somewhere, right? You’ll definitely want to know about a sudden spike or decline in donations.
But only adopting fundraising metrics as key performance indicators means you’re chasing KPIs that do not reflect your underlying strategic goals.
The problem with measuring influence
It’s one thing to decide you need to start tracking influence. Actually finding some metrics that correspond to this goal? A whole other matter entirely.
Influence is one of those qualitative metrics that tends to defy our attempts at quantification. You can’t just “count” influence the way you do with revenue or value of goods sold. There is no one metric that can show you directly how much impact you’ve had.
So you need to get creative.
How to find your non-profit’s key performance indicators
In the business world, there’s no cookie cutter approach to adopting KPIs – the process of finding them needs to be an essential component of exploring and refining your strategy. You can’t just take someone else’s KPIs and adopt them as your own, because everybody’s situation and environment is unique.
It’s no different in the non-profit world. Your KPIs will need to be as unique as your organization’s mission and strategy.
But there are a few general KPIs that non-profits will want to look at when setting their own strategy, either to use directly or for ideas on setting their own.
Revenue numbers of course need attention (even non-profits need money to continue operating and reach their key goals). But for most non-profits revenue likely wouldn’t qualify as a key performance indicator. The reason? Raising revenue isn’t an end goal for non-profits.
But metrics related to revenue can act as a key indicator of how successfully you are getting your message out to the people you’re trying to reach. Seeing the number of donors decline? It likely means your message isn’t getting through the way it has in past years. Seeing the average donation per person decrease? Maybe you’re not reaching the same audiences as in past years, or maybe your messaging wasn’t quite as effective as it once was.
Donations aren’t the be-all and end-all. They can, however, act as a key indicator in the absence of other available metrics.
The development and influence of public policy is a major reason for the existence of many non-profits. That’s why a lot of them devote so much of their resources to meeting with politicians, studying the public policy environment and involving themselves in the legislative process.
Even non-profits whose existence is tied closely to other goals – such as a health organization’s focus on research – still have a government relations arm devoted to public policy. The problem is that actually measuring that influence can be exceedingly difficult.
The legislative process is a complex one, often involving factors that are too complicated to boil down to simple cause and effect. Changes in laws frequently take years and are influenced extensively by cultural issues, the will of the voters and – you guessed it – politics. Politicians will also, for simple reasons related to optics, frequently resist attributing their decisions to any particular person or organization.
Still there are indicators on which non-profits can rely.
One potential area to look at is the number of public recommendations made that were eventually included in final legislation. Another is the number of times officials from your non-profit were asked to consult with politicians on public policy issues – examples like legislative committees spring to mind here.
If you can show that politicians and public servants have paid attention to you, it goes a long way toward demonstrating influence in the legislative arena.
Many of the topics non-profits research don’t have end dates that will be reached any time soon. Organizations devoted to the study of cancer, for example, will be unlikely to claim a “cure” any time in our lifetime.
So the question then becomes: How do you demonstrate progress towards a goal that is years into the future?
A lot of these will likely be unique to the organization (and likely beyond the understanding of a lowly digital marketer such as myself). But it’s worth thinking about what your non-profit produces that act as a marker on the way towards longer-term goals. Research reports produced or the number of times your research was cited elsewhere spring to mind as possible ideas.
Many non-profits claim raising profile and gaining attention as a key goal. That’s why media impact frequently comes up as a key indicator of success.
The reasons for this are somewhat straightforward: Reach and legitimacy.
Many organizations have adopted tactics, such as social media updates and blog posts, to communicate directly with audience members. But few of these strategies can reach as many people as a placement in a respected newspaper or radio/TV station.
Major media outlets continue to reach huge numbers of people on a near-daily basis. One placement in the Globe and Mail will likely eclipse the exposure that many organizations get from their website in an entire year.
Getting earned media attention also confers a modicum of legitimacy that just isn’t possible for organizations that only use their own publishing tools.
Thought leadership impact and influencer marketing
Thought leadership plays an increasingly large role at many organizations. Nonprofits and charities are no longer content to raise money and then put it towards their research. They want to be (and be seen as) leaders in developing thoughtful ideas and solutions in their fields.
If you can demonstrate that top leaders in your field are paying attention to what your organization has to say, you can claim a significant level of impact.
Closely related to this is the idea of influencer marketing. The ability to reach key influencers who work in their space is a key indicator of success for many non-profits. Want to know if your message is getting through? Check to see who’s paying attention to you.
Maybe these people aren’t necessarily “thought leaders”. But they can still be influential in helping to spread your message through social media and other platforms. I’m thinking here in particular of community leaders who, thought they may not work in the field where your organization operates, may still have significant role in championing your cause.
Reach and engagement
Many nonprofits are concerned with more than just those who fall into the “stakeholder” or influencer category. They’re trying to influence perceptions among those who would fall into the “general public” category.
Here the utility is in influencing perceptions, opinions and actions over the long term. I don’t know for certain, but at a distance many health-related organizations would seem to fall into this category. Think, for example, of Heart and Stroke Foundation commercials aimed at getting us to lead healthier lives.
Here the number of people that you’ve reached would be an important KPI. Or maybe you’re interested in the number of people who saw an ad and performed a key conversion action, such as signing up for a newsletter or attending an event.
For many nonprofits, these sorts of achievements are more than just a means to an end. They fit squarely with the goal of influencing the public at large.
Bringing it all together
Which KPIs have worked for your non-profit? Let us know in the comments below.