How To Measure Nonprofit Effectiveness

One of the more recent and most vivid displays of a non-profit organization in action was the Red Cross’ role in the aftermath of the Haiti earthquake and in the Hope for Haiti telethon. In the United States, there are 1.8 million non-profit organizations doing work in areas of charity, medical relief, housing, education, and other causes. Though organized with the noblest intent of making the world a better place, non-profit organizations continue to receive very close scrutiny because of the following reasons:

  • Its non-profit nature means financial donations come in and any surplus of that is not distributed in the form of payouts to members or stakeholders.
  • Non-profit Organizations enjoy some measure of tax relief and tax shield under the provision of the IRS.
  • Most of its members are voted internally and control over its resources and funding are decided by a few inside the organization mostly by the Board of Directors.
  • Although Non-Profit Organizations have to be registered in the United States with clearly defined mission, vision, and by-laws, they are not required to regularly file its financial report publicly.
  • Some non-profit organizations constantly have issues in capacity-building often relying on large sums or continuous injection of funds to keep on operating.

If you are one of the compassionate ones who regularly volunteer and share what you have with non-profit organizations, here’s how you can effectively measure its performance from the outside looking in.

  1. Can the monies and resources support the mission? Non-profit organizations set their goals very high and this is evidenced by their mission statement. For example, a non-profit organization’s mission statement may state “provide healthcare and home assistance to an X number of elderly residents in their state.” Based on that mission statement, you can gauge how activities are planned to accomplish this goal and should equate to the amount and resources needed to meet the needs of the targeted number of elderly residents. In other words, non-profits should put their money where their mouth is.
  2. Is the list available for scrutiny? Non-profit organizations should have a list of beneficiaries in the form of smaller entities to help carry out its mission. Ask for that list and check each one. The list should also have specific descriptions of the work being done to improve the lives of those being helped.
  3. Are you allowed to ask questions? Non-profit organizations should welcome questions about their mission and should be open to your suggestion of interviewing their beneficiaries to gauge satisfaction and if the intended allocation was received to spur a project.
  4. Is there a steady upsurge in growth? “Billions and billions served.” – This is a McDonald’s pylon signage that states how many people they have served in their stores. The same should apply to non-profit organizations. You can measure the growth by the number of individual or group beneficiaries served to date.
  5. What’s the plan moving forward? One of the critical challenges faced by non-profit organizations is longevity. Knowing how many of these are competing for funding, it’s understandable if many throw in the towel because they don’t have the funds to carry on. However, a well-managed non-profit organization looks and plans ahead. As such, realistic and measurable goals are prepared and actions are properly assessed to make sure it becomes sustainable funding or no-funding. If you see these in a non-profit’s project plan, it means it will be effectively and successfully implemented even when donations or funding dwindle.

Accountability is a big factor in nonprofit organizations. Each member should be responsible for the organization’s mission and take it to the very end. If people see how well managed a non-profit is and that many lives are improved, people will always help through donations or become moved to participate in the spirit of volunteerism.


Share this article!

Follow us!

Find more helpful articles: