Is Your Data (Or Lack Thereof) Impacting Your Fundraising Efforts?
In today’s world, the availability of information has drastically changed. Donors and major funders have started to use different influencing factors when deciding which organizations to support. People used to give because they thought an organization was doing good for the world, but now it’s all about actually knowing an organization has done good. In fact, according to a study by The Chronicle of Philanthropy, seven out of 10 donors want to see actual evidence of an effective program before opening their checkbooks. With cellphones and computers only a step away, donors take to organization websites to review available information, whether through annual report publications or reports from certain watchdog groups like CharityWatch. Furthermore, donors want to see lower administrative or overhead expenses and more program expenses, as well as the impact of the work being done in the community. If organizations can’t demonstrate or provide this information, it could mean missing out on meaningful donations or relationships and major funding opportunities.
As nonprofit organizations forge a path to the forefront of solving today’s issues, how do they stay mindful of providing meaningful information to donors while also battling limited resources, increasing demand for those resources and increased competition? It starts as many conversations do—by working to develop a clear vision and business plan for your nonprofit, along with appropriate financial resources to make progress toward operating within that vision. Only then can you begin measuring the effects or outcomes of work being done with your respective communities.
In response to donor demands, some organizations may consider creating additional programs in hopes of presenting a more rounded or vibrant picture of work to the public. However, including additional programs runs the risk of creating programs that are a poor fit for the organization, which can act as a distraction and use resources and time that may not actually be in line with the organization’s vision. The increase in workload also can cause something called the “doing our best” (DOB) effect or mentality. Have you ever felt like perhaps everything isn’t running efficiently or effectively, but instead there’s an endless cycle of completing tasks without knowing whether they work or add value in the end?
Instead of maintaining a DOB mentality, it will be increasingly important to include, as a part of each program, multiple ways of collecting data. This will help enable your organization measure the effect or value being added to the community as a result of your nonprofit’s work. It may at times feel like data is only collected for reporting purposes because a funder requires it. This may still be the case; however, we do know donors value data availability and want to see what kind of impact your programs are making for the clients and communities served. Nonprofits should strive to create a new culture that includes collecting and using data to further the organization’s overall mission.
A new normal should be established that includes resiliency and flexibility, as well as a culture of high performance, learning and innovation. Make sure your organization is adapting to changes. Push management, staff, board members and volunteers to perform at their best at all times. Create a culture of continued learning, innovation and increasing creativity to keep up with an ever-progressing world. Nonprofits’ missions are changing from serving communities to solving issues within the community, and this type of mission or vision can’t be successful by doing things the way they’ve always been done. Donors will decide to give to the organization they can see making the most impact. Funders will give to organizations with a concise plan, measurable results and clear outcomes.
A recent national study from State of Evaluation has shown only one in three nonprofits has measurable outcomes. Some of the most common reasons nonprofits don’t have measurable outcomes include limited staff time, insufficient resources, limited expertise, limited external resources and lack of support from organization leadership. What’s an outcome? An outcome is the result of an activity, while an activity is what you actually do. Here’s an example:
- Activity – Feeding hungry kids before school
- Outcome – Improved student health, better behavior, better grades and higher graduation rates
An outcome is a promise delivered. We promised we were going to do something, we monitored and evaluated throughout the process, and we can say in the end it either worked or didn’t work. Outcome assessments and being able to precisely measure the degree of change are becoming increasingly important. An outcome assessment’s results also may help to evaluate whether your organization is an impact-driven organization by asking questions such as, “Have we aligned goals and activities with the effect we’re making?” or “Can we use the data collected to make changes or correct programs and services provided?”
There are four measures to use when analyzing or collecting data. Data must be complete, timely, reliable and accurate. Can your organization collect complete data, or does it make sense to partner with another organization to help collect information? Can information be current or available within a reasonable time frame? Is the information obtained reliable? And can the information be considered accurate?
After it’s determined that information can be used, organizations should create or have in mind benchmarking indicators to evaluate the data collected. Before selecting these benchmarks, organizations should determine what success means to each program and create benchmarks aligned with each program’s goals. Benchmarks should be accurate and relevant to each program and can then be used as indicators or reference points to evaluate progress toward reaching stated goals. Nonprofits must understand the issues they’re trying to solve before they can monitor success along the way. During this monitoring process, heavy questions may come to the forefront surrounding programs that lack evidence and don’t generate the level of change desired by organizations. This may be the time to decide if programs with effects that can’t be measured should be cut.
While these types of decisions can be difficult, it may be best to start by evaluating your organization’s foundation or main building blocks. Do you stand on a firm foundation with a clear mission, values and vision? Through the data collection and evaluation phases, remember not to lose sight of what your organization is and why you exist. What impact do you want to make, and what impact do donors want to see? Donors will measure an organization’s success based on the data provided to them, much like consumers who look at hotel or restaurant reviews before making a reservation. Data, no matter how it’s presented, will tell funders and donors if programs are working. Don’t attempt to measure things you don’t know, things you don’t need to know or things beyond your control. Paint a picture to the public of what the situation was before your program stepped in and what the situation is after. Clearly indicate what issues or problems were solved by monitoring progress and evaluating the outcomes. Data can be gathered in a variety of ways, including conducting questionnaires, surveys, interviews, application reviews, observations and focus groups. Ultimately, the reason nonprofits should measure outcomes and effectiveness is to better serve your clients and communities.
Reach out to your BKD trusted advisor or use the Contact Us form below if you have questions.