Without the end goal of profit, how does an NFP measure its success? As well as its financial performance, other factors such as social impact and political reach can be equal or greater priorities.
Measurements are vital for the NFP organisation’s
- good governance responsibilities
- future survival strategy
- ability to attract and reassure the cause’s donors, sponsors, employees and volunteer supporters
- capacity to apply for and win funding programs and grants.
Ideally, measurements, whether social, political or economic, should be tangible, standardised and easily understood by a wide audience. The last point is especially important for making measurements inclusive when informing NFP donors or grant funding bodies.
A key aspect of an NFP’s achievement is its social impact. However, this is harder to track, according to the AICD, “Some measurements of impact are straightforward, such as before/after surveys, interviews and feedback forms. Economic analyses, such as Social Return on Investment, are more difficult.” [AICD]
Fortunately, more resources are now available to NFPs that seek to produce a rounded picture of their activities with measurements of their social impact. In Australia, UTS has launched a new toolkit that helps Australian NFPs to measure their social impact, the Social Impact Measurement Toolbox.
UTS defines social impact as “the sum effect of any intervention or program implemented to address social disadvantage”.
The Social Impact Measurement Toolbox was designed with the aim of empowering the NFP sector to measure its impact. This free toolbox was described as “a collection of key resources including online courses with video, forums, questionnaires, interactive templates and a repository of reliable, verifiable and validated measures, all collated in an open digital platform.”
Community Sector Banking CEO Andrew Cairns said at its launch, “The Toolbox will level the playing field between the big organisations and the small organisations, those that are in regional areas and those that are in city areas. They’ll be able to have a consistent conversation in all means and manners to be able to get that support.”
Evaluation methods used in the toolkit include frameworks and tools such as: Questionnaires, scales, analysis tools, indexes, indicators and measurements – such as the PERMA-Profiler, which measures the five pillars of Positive emotion, Engagement, Relationships, Meaning and Accomplishment, along with negative emotion and health.
At Hopscotch Accounting we can help your NFP with systems and processes that measure financial activities and the success of the organisation. These tools coupled with social impact measurements will not only provide clarity but assist with building the organisation and planning for the future.