Strengthening processes to measure and report project impact
In the current fundraising environment, donors require a higher level of transparency and engagement. From large foundations to individuals, they want assurance that their funds are used to generate greater outcomes in a more efficient and effective manner. These requirements are putting pressure on growing nonprofits to enhance and update processes and technology to increase efficiency and strengthen organizational performance.
In the midst of the economic downturn and with greater media attention on misuse of funds, donors are generally more cautious when providing financial information. Historically, project success stories and annual reports meet the needs of major donors. However, organizations can face difficulty to meet these requirements that often require an organizational shift.
Nonprofits cannot wait too long to establish loyalty and transparency. If that occurs, organizations can suffer reputational risk, and donors may rescind funding from key projects or shift their attention to other organizations. Therefore, measuring and reporting is a critical step that is often overlooked and undervalued. To establish effective processes, creating a balance of speed with strong delivery is key.
To determine if your organization can be better structured to meet the evolving donor environment, ask the following questions:
- What type of information do I provide donors? Are they asking for different information or in a different format?
- Am I reaching my target market with current campaigns? Is there an untapped market we would like to reach?
- Have we lost funding due to transparency issues?
- Can we provide quantitative information about projects, or only tell stories?
- Is our current technology platform able to collect, analyze and report to our donors?
- What level of skill is needed to measure and report? Are there people currently staffed who are capable?
- Is our process structured so we can quickly gather and provide information?
A strong connection between your people, processes, technology and strategy must be in place to measure and report the impact being made, and to build donor trust in your mission. Considerations for each of these four critical areas include:
People – Define appropriate levels for data collection, entry, analysis and donor reporting. Consider the skills, time commitment and responsibilities of your staff. Field workers are typically the closest to the data and can collect important information. However, they might be focused on actual project implementation, or may lack the necessary skills to perform data entry in a complex system. Conversely, someone who completes measurements and performs analysis may not have the right skills to manage donor relationships. You must train staff on proper monitoring and evaluation; once a defined strategy and standardized collection method has been determined, train staff on how to perform these tasks.
Process – Measurement results should be readily available to both you and the donor. Your process should be quick and efficient; if you are taking too long to analyze data and translate it into useful formats for donors, then your processes need to be evaluated. Using different media such as email, social media and website communications can help satisfy donor needs until full reports become available.
Technology – Use system selection techniques to find a monitoring platform that is right for you. Several considerations must be accounted for when selecting a platform; invest in a solution that meets your needs for measuring, analyzing and reporting at various staffing levels.
Strategy – Know what you would like to report and how to measure it. Unfortunately, this can be more complicated than it sounds. For example, a reporting requirement may be to show how your project helped individuals get out of poverty. How do you measure poverty? Is it obtaining a sufficient income level? In this case, you must define a sufficient income level, which could vary by region, and distinguish income received as a result of the project.
When determining what to report, think about what is important and what motivates the donor, ease of obtaining the information and alignment with the mission. Develop a reporting strategy that balances standardization and customization. You should be flexible to gain donors who already have set reporting requirements, but a degree of standardization is required to run efficiently and to ensure compliance with your mission.
Determine frequency of reporting and the amount of information to report for each donor level. Create a frequency plan that doesn’t debilitate your resources, but still touches donors consistently; find a balance between too much information and not enough. An individual does not need as much as a large foundation, but do not forget small donor needs—they add up to large dollar amounts.
Successfully measuring and reporting your impact benefits your donors and ultimately, your entire organization and those you serve. Making an investment in measuring and reporting as a marketing tool develops a cyclical relationship with donors to generate funding for additional projects and initiatives. More visibility and transparency will lead to more trust from donors, and you will see the impact that their dollars can make.