Nonprofits Should Adopt For-Profits' Performance Measurement Rigor, Says New Book
CAMBRIDGE, Mass., November 4, 2009 — Many nonprofit organizations can significantly improve their impact on social problems and their operations, by adapting some of the private sector`s data-driven performance measurement standards, according to a book released today by Root Cause (www.rootcause.org), a national nonprofit advisory organization.
The book, Building a Performance Measurement System: Using Data to Accelerate Social Impact, is one of the first guidebooks to look at the performance measurement system commonly used by the private sector to increase profitability, and modify it for a simplified, step-by-step customized system to help nonprofits improve operations and increase social impact.
A free PDF version of the book and more information about nonprofit performance measurement are available at www.rootcause.org/performancemeasurement. Hard copies are available for $19.95 through Amazon.com.
"Doing good is no longer good enough," says Andrew Wolk, CEO of Root Cause and the book`s co-author. "The pressure has never been so great for nonprofits to prove their worth. Rigorous internal performance measurement is a key to many nonprofits` success-perhaps even survival-during these hardscrabble times."
"Good data can show a nonprofit that it`s focusing on the right programs and
resources to accomplish its mission," he said. "Rigorous performance measurement can also assure philanthropic investors that their shrinking dollars are wisely invested in organizations that are well run, sustainable, and making a difference."
The book outlines a performance measurement cycle that can be customized for each organization`s mission and vision. It includes a five-step process and a template for developing the system.
It includes detailed explanations and examples of how to conduct a performance measurement audit; define what should be measured in organizational health, program performance, and social and economic performance; determine the best measurement tools to capture data continuously; develop a "dashboard" and internal reporting process; analyze findings; and report performance to external stakeholders, including funders.
Wolk said many organizations publish annual reports that track budgets and
client numbers, but far fewer undertake the challenge of measuring social
impact-uncovering and reporting, through hard data as well as personal stories, their progress towards realizing their mission.
For example, Root Cause found over the last three years that all of the
applicants to its Social Innovation Forum whose statistics it tracked used some
form of measurement, such as financial health and client growth, but only
one-third of them were engaged in meaningful measurement of social impact.
Root Cause is a nonprofit organization headquartered in Cambridge, MA, that
advises innovative nonprofits and educates social impact investors. CEO Wolk has advised numerous organizations dedicated to social impact; authored publications on nonprofit business planning, performance measurement, and the intersection of government and social entrepreneurship; and holds appointments at Harvard
University and MIT.