Upping the Support for Nonprofit Performance Assessment

Matthew Harty

The Center for Effective Philanthropy’s Benchmarking Program Officer Roles and Responsibilities report provides useful insights into an often unexplored and relatively unknown area — the foundation program officer’s perspective on their role and profession. I found this piece to be particularly interesting in regard to the respondents’ perception of the leadership and management capacities of nonprofit leaders and the availability of resources required to assess organizational performance. This report shines a light on an important and complex challenge facing many nonprofits: how does one manage an organization if starved for funds to effectively assess performance?

As I read the report, two data points caught my attention. According to the study, 54 percent of program officers responding to the survey think that nonprofits are well-run and only nine percent think that nonprofits, in general, have the resources necessary to assess the results of their work. These data points tell a powerful story.

If only a slight majority of program officers believe that nonprofits are well-run and an overwhelming majority believe that the same organizations don’t have the resources to assess their work, well, then, you get what you pay for. And if you give any credence to the colloquialism, “you can’t manage what you can’t measure,” nonprofit leaders are in a nearly impossible situation, per the report’s findings. In my opinion, this view of nonprofit leaders as barely competent managers of underfunded organizations is a harsh and unfair assessment.

If nonprofit leaders lack the required resources to assess their own performance, how can they improve? Organizations benefit from an ongoing assessment of their performance, and these assessments provide the data required to make appropriate adjustments and corrections. This is not a new or unknown concept, nor is it lost on nonprofit leaders. A 2015 CEP study found that half of nonprofit leaders who responded to an open-ended question about what they would like to do to better assess and/or improve their performance said they wanted to acquire additional, or better, data.

But nonprofits have to make difficult resource allocation decisions. And according to that same 2015 CEP report, about half of nonprofits spend two percent or less of their budget on efforts to assess performance. If nonprofit leaders have to choose between serving their clients or assessing their own performance, my experience tells me that, possibly to their own detriment, nonprofit leaders will choose serving their clients over assessing internal performance.

They would likely argue that the organization exists to serve their clients, communities, constituents — their mission. Assessing their own performance would likely fit in the “nice to have” bucket and would be secondary to their primary, mission-centric activities. Nonprofit leaders, possibly more so than others, are acutely aware of the tradeoffs inherent within their resource allocation decisions. As a result, assessing their own performance falls down the agenda and mission-related activities occupy the top slots. One could argue that a 54 percent approval rating of nonprofit management competence is actually a major accomplishment given the limited resources, and that nonprofit leaders should be applauded for doing so much with so little.

But before we canonize our nonprofit leaders for their management accomplishments with scarce resources, the report also identifies an opportunity window that could benefit both funders and nonprofit organizations alike.

There is consensus amongst program officers that nonprofits do not have the requisite resources to assess their performance, and CEP’s 2015 study found that just one-third of nonprofit leaders said that their foundation funders tend to support their organization to help it assess its performance. This begs the question: if the coffers were opened and the funds were suddenly available, would nonprofit organizations be able improve their performance through measurement and evaluation? If so, how might philanthropy, evaluation, and measurement experts and nonprofit leaders partner with one another to improve organizational performance, and by extension, sector-wide outcomes?

Recently, experts from across the globe and sectors gathered at Stanford’s Data on Purpose | Do Good Data conference co-hosted by the Stanford Social Innovation Review (SSIR) and the Digital Civil Society Lab at the Stanford Center on Philanthropy and Civil Society. The conference focused on the challenges and opportunities of data collection, measurement, and evaluation. Thankfully the conference posted each presentation online and they can be accessed here. If you have the time, I recommend watching as many of these talks as possible, as they approach measurement and evaluation from a variety of perspectives. In particular, Andrew Means’ talk about data mining and his role as director of beyond.uptake provide possibly new approaches to the ways in which data, measurement, and evaluation experts can partner with nonprofits to improve performance.

After reading CEP’s report and viewing a number of sessions from the conference, I believe a number of opportunities exist for better use of data, measurement, evaluation, and management that could benefit funders, their grantees, and ultimately their clients and society.

  • Given the complex nature of measurement and evaluation, an increase in funding alone will not be enough to improve organizational performance.
  • Data collection, measurement, and evaluation experts will be essential in assisting nonprofits in defining and assessing performance.
  • Program officers should consider funding measurement and evaluation grants in addition to program grants or general operating support.
  • The nonprofit sector stands to benefit from recent advancements by measurement, evaluation, and technology experts, and funders can bridge the gap between them.

Given the increase in focus on outcome measurement from funders, this is a major unmet need in the sector. CEP’s report provides the type of high-quality research the sector needs to move this issue forward, and hopefully will inspire approaches to philanthropy that foster the efficiency and efficacy of nonprofit organizations.

Read the Report

Matthew Harty is director, programs in social enterprise, at Columbia Business School.

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