Transparency and financial accountability are more important than ever for today’s not-for-profits (NFP). Engaged donors insist on this openness, and long-term funding from grants and foundations often depends on demonstrable program efficacy. After all, programs that can show they’re responsibly using funds and tracking progress toward desired outcomes are more likely to achieve their mission.
As useful as outcome metrics can be both internally and externally, selecting meaningful metrics and tracking necessary data can be a monumental challenge. Even those organizations accustomed to performing careful financial management might find themselves overwhelmed with facts, figures and formulas.
A balanced approach that focuses on the NFP’s strategic mission is the best way to satisfy the demands of all stakeholders. Outcome metrics should take into account both financial and performance-based considerations and encompass the interests of both donors and those served by the NFP.
Every organization will pick different metrics to prioritize. The key is to identify the top indicators that will best reflect the NFP’s progress towards its goals. Leaders can use these questions for assistance:
- What effect is this program striving to have?
- What are the progress indicators?
- How do we know we’re moving the needle?
There are countless outcome metrics a NFP can potentially track. The scale of this effort will depend largely on the tools the NFP has at its disposal.
Committing to transparency and accountability is meaningless unless an organization has the ability to track, store, analyze and report on data in a powerful way. Maintaining data requires automation tools for the hard work while giving decision makers the freedom and flexibility to reconfigure their approach.
Modern financial systems necessary for accurate and ongoing tracking of outcome metrics are unfamiliar to many NFPs. The good news is that these systems are more intuitive than ever while accommodating unique NFPs with wildly diverse agendas.
If you’re ready to dazzle donors while helping ensure your NFP is meeting and exceeding expectations, the right financial management system is essential. Download our free whitepaper to learn more about the metrics and methods that will help drive your success.
Contact your BKD advisor if you have questions.