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Impact Measurement Tip: Calculating Your Cost Per Success


Sheri Chaney Jones

CEO & Founder of SureImpact



In this week’s Measurement Tip, we are going to discuss how to determine your program’s cost per success. This is my favorite measure of all measures ever invented, because it allows you to tell your impact story in a real way. Instead of reporting on what it costs to put one individual through your program, cost per success enables you to tell funders what it costs for one person to have a successful outcome in your program.  



For example, Center of Hope Family Services (Center of Hope) in Toledo, Ohio has dramatically increased their funding by reporting on their cost per one successful outcome. Center of Hope’s entire program costs approximately $1 million. Imagine going to your funders and telling them you need $1 million every year just to run your programs. When phrased that way, it feels like a burden on society and on donors. Instead, Center of Hope is able to communicate their cost for getting one person to a successful outcome. In 2020, this number was $2,373 per successful outcome. Now when they communicate their need for program funding, funders know what their return on investment will be.  According to Dr. Tracee Perryman, CEO of Center of Hope, “We can speak with even more specificity as to why the dollars funders are investing in our programs will make a difference.” (Read the full case study here)


Another great thing about measuring cost per success is that you can measure it over time. Let’s say your organization has a 65% success rate, but your goal is to get it to 75%. If you know that it costs you $2,500 to get one individual to a successful outcome, you can increase your program’s budget and increase your success rate at the same time.


Running the Numbers

So, it is actually very easy to calculate your cost for one successful outcome. Step 1 is to calculate how much it costs to run your programs. My recommendation is that you add everything into the cost. Don't worry, I know different grants have different formulas, but in this case, you need to add in your administrative costs because you cannot do your programmatic work without some of that administrative structure. For example, if your executive director left the organization, your program might not be as successful. Or, if some of your fundraising efforts went away, your program might not be as successful. Also, if the technology and the software you use to manage your data went away, your program would not be as successful. So, make sure you build in all of the costs that it takes for you to run your program.


Step 2 is to take all of the costs that it takes for you to run your program, and then divide it by the number of individuals who achieved a successful outcome. Resist the urge to use the number of all clients served, because that calculation will just show you the cost to deliver a service. Remember, the goal is to show what it costs to help one individual to achieve a successful outcome. So, make sure to only use the total number of individuals who have achieved that successful outcome.


Conclusion

As nonprofits move further into 2024, it’s vital to ensure your organization maintains a secure position in the sector. Now is the time to focus on strengthening your organization to ensure long-term sustainability.

SureImpact provides the data collection and impact reporting infrastructure to meet the unique needs of social-good organizations as you work to achieve your organization’s mission and ensure sustainability. SureImpact’s simple and collaborative case management, outcome tracking, reporting, and analytics tools are designed to help you manage and measure your social impact and ensure you have impact data available in real time to share your impact story without the burden of doing everything manually.



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