How to Talk About Nonprofit Impact from Inputs to Outcomes
Inputs, Outputs, Outcomes, Impact - How are they Different?
The idea of measuring results is far from new but has taken on more importance in the 21st century. Foundations especially and many individual philanthropists now search for organizations that are data-driven and results oriented.
Just think of the Melinda and Bill Gates Foundation and other philanthropists such as Facebook's Mark Zuckerberg, and Jeff Skoll, a founder of eBay, whose foundation supports social entrepreneurs. These philanthropists, using their experience with the tech industry, look for data-driven causes to back with their fortunes.
This new fascination with linking philanthropy to measurable results has landed many organizations in the murky waters of program assessment.
However, most nonprofit professionals are not experts in measurement. But they should, at least, be aware of the basic concepts. Fundraising professionals need to be able to talk and write about results.
My go-to resource for measurement is Outcomes Management - How Nonprofits Can Measure Results by Robert Penna. Penna specializes in measurement for the nonprofit sector and has worked with Charity Navigator to develop ways to incorporate charitable results into its rating system.
Here are some simple explanations, gleaned from Penna's excellent book, of the most common terms when we talk about measurement.
What Is a Program?
A program is a product or services your organization provides to change a situation.
Examples include classes, lobbying, public awareness campaigns, performing, displaying, or protecting artifacts or animals. A program might also provide food or shelter for the needy or recreational programs for young people. A program is what your organization does.
What Are Inputs?
The resources your organization devotes to a particular program are called inputs. Those resources can be financial, but also the time of staff or volunteers. Expertise, such as a consultant or a partner organization, can be considered an input.
What Are Outputs?
What does your program produce? For instance, a training program provides graduates. A particular effort might yield information such as white papers or studies. A homeless shelter creates filled beds.
We usually describe outputs with numbers. For instance, "...we filled 96 percent of available beds..." or "...our training program resulted in 95 graduates."
Outputs are measurable and readily determined.
It's tempting to stop with outputs because they are easy to produce. You just count. How many people did you serve? How many meals did you dish out?
But, your organization should try to get to the next level of outcomes and impact to impress funders.
How Is an Outcome Different?
An outcome is an effect your program produces on the people or issues you serve or address. For instance, the result of a training program might be the number of graduates who get a job and keep it for a particular period.
An outcome is a change that occurred because of your program. It is measurable and time-limited, although it may take a while to determine its full effect.
Measuring outcomes requires a more significant commitment of time and resources. Plus, you may have to track performance over time.
Why Does Impact Matter?
Impacts are the long-term or indirect effects of your outcomes.
Impacts are hard to measure since they may or may not happen. They are what we hope our efforts will accomplish.
For instance, graduating from a training program may eventually lead to a better quality of life for the individual. But how do you know? What are the indicators of a better quality of life? How long will it take to see the impact?
Impacts are often uncertain and unpredictable. As Robert Penna says in The Nonprofit Outcomes Toolbox, “...impacts are what we hope for, but outcomes are what we work for.”
What Fundraisers Need to Remember About Measurement
Charities often use the term, “results,” when they are actually talking about “outcomes” or “outputs.”
Be clear about what each word means and use them appropriately. Also, strive for the highest level of those results that you can reach.
Fundraising messages that motivate donors may read very differently than the information you give to institutional funders in your grant proposals.
When fundraising, you try to appeal to the hearts of donors while still backing up your appeals with evidence that your programs do work.
But, the key to effective fundraising is to make sure that your charity can measure outcomes. And to know at what level you are doing it. The terms you use in your donor communications may not matter all that much. It's what is happening in the background that counts.
If the critical data exist, then you can answer any question that might come up whether that question comes from a foundation or a major donor.
Plus, all those data help determine what worked and what didn't. That's how you improve your programs.
How Measurement Fits Into Overall High Performance
As crucial as measurement is, it is only part of what sets off a high performing nonprofit from one that isn't high performing.
The Leap of Reason Ambassadors Community has developed a framework for high performance in the social sector. Especially useful is its section on how even small nonprofits can and must understand how to build high performance from the ground up. Leap of Reason's framework serves as a handy outline of the "pillars" of high performance. Those pillars include:
Pillar 1: Courageous, adaptive executive and board leadership (the preeminent pillar)
Pillar 2: Disciplined, people-focused management
Pillar 3: Well-designed and well-implemented programs and strategies
Pillar 4: Financial health and sustainability
Pillar 5: A culture that values learning
Pillar 6: Internal monitoring for continuous improvement
Pillar 7: External evaluation of mission effectiveness
Although many smaller nonprofits can be overwhelmed by this model, its authors insist that it can be done, one step at a time:
"We have found that high performance is less about specific decisions and more of a context and framework to approach decision-making. Many organizations and leaders have found that strengthening their organization’s performance eventually embraces every component of their work, every aspect of their organizational culture, and every function in the organization. While that may sound overwhelming, it needn’t be."
For nonprofits, measurement should be considered within the context of a model such as this, not just because it's needed to apply for a particular grant or make the case to a significant donor. If measurement becomes part of an overall plan, it becomes more natural, easier, and sustainable.
High performance can be achieved by almost any nonprofit organization. Although small nonprofits and arts organizations find it more challenging to express results in a data-driven way, they can develop ways to track and measure almost any activity.
Once developed, these systems can produce information that should be presented to funders, whether individual donors or institutional donors. They will be rewarded for those efforts. Donors want to see nonprofits of all kinds make an effort to quantify and understand their effectiveness.
The Nonprofit Outcomes Toolbox, Robert M. Penna, Wiley, 2011.