What Is Impact? A Primer on Nonprofit Impact Measurement

In the larger world of impact assessment and program evaluation, impact measurement is an often overlooked but critical step. According to the Stanford Social Innovation Review, one out of four nonprofits don’t have a system in place for measuring their programs' impact. Moreover, of the nonprofits that do collect “impact” data, only six percent feel they’re using that information effectively to influence their greater strategy.

What does this mean? Many social good organizations aren’t collecting or organizing the right data to measure their impact or (even more worrisome) aren’t collecting data at all.

Whether you fall into that six percent or the other ninety-four, this guide will help your nonprofit make the most of impact measurement. We’ve broken down this topic into three main sections:

1. Defining Terms for Program Evaluation

2. How Nonprofits Measure Impact: A Step-by-Step Process

3. Nonprofit Impact Measurement Best Practices

By the end of this guide, you’ll have the tools to determine if your organization is having the expected impact on your community and quantify this impact with measurable results. However, before diving into the steps for impact measurement, let’s review the terminology surrounding critical program evaluation and impact measurement.

Defining Terms for Program Evaluation

What Is Impact?

In the non-profit sector, impact is the quantifiable difference an organization makes. Simply put, it’s the collective effects (intended and unintended) of a nonprofit’s work on the communities it serves.

Impact can encompass changes in a community’s social, economic, physical, and ecological circumstances. For a nonprofit’s many stakeholders, a clear articulation of the organization’s impact is the key to securing funding, creating new programs, and making critical organizational decisions.

But how do you articulate something like impact to donors, partners, staff, board members, volunteers, and constituents? That’s where impact measurement comes in!

What Is Nonprofit Impact Measurement?

At its most basic, nonprofit impact measurement is the collection of data according to clearly-defined metrics that correspond to a nonprofit’s mission and goals. Without measuring impact, it’s nearly impossible for a nonprofit to accurately define its success and the effectiveness of its services relative to the resources at its disposal and the level of community need.

Ultimately, you can be putting in the hard work and investing the money, but if you’re not measuring the right outcome measures—also known as key performance indicators (KPIs)—you’ll never know if your efforts have the impact you want.

How Nonprofits Measure Impact: A Step-by-Step Process

Impact measurement is the foundation of nearly every successful organization in the social-good sector. Measuring impact allows nonprofits to:

• Create powerful marketing and communications materials that resonate with their supporters.

• Improve their programs and activities based on quantitative and qualitative data.

• Remain accountable with reports to their funders, community members, and other stakeholders.

• Develop collaborative partnerships with other organizations to fill in gaps in your community’s needs.

In this section, we’ll look at the five steps nonprofits should take to develop an effective impact measurement process. Before diving in, as a first step, take some time to write down your answer the following question:

What does success for my organization or program look like?

Likely, your response will be drawn from your organization’s mission statement and goals. Broadly speaking, success might include:

• Increasing constituent knowledge and learning

• Changing constituent attitudes

• Increasing constituent readiness

• Reducing an undesirable behavior

• Increasing a desirable behavior

• Maintaining a new behavior

• Improving constituents’ social status

• Improving constituents’ economic conditions

• Improving constituents’ health conditions

Whatever success looks like for your organization, plan to refer back to this definition at each step of the measurement process and use it to guide everything from your measurement framework to how you share your impact with your network.

1. Build a Framework

Once you know your organization’s definition of success, you can then work backwards to build the framework under which you’ll conduct impact measurement. An impact measurement framework allows you to set consistent strategies and measurements, align with partners, improve performance, and increase impact.

While there are a range of premade frameworks you can use, most frameworks follow a logic model approach that outlines a program’s inputs, activities, outputs, outcomes, and impact. Inputs and activities focus on the resources and actions invested into a program. On the other hand, outputs, quality, outcomes, and impact focus on the short, medium, and long-term results of a program or activity.

Before moving to the next step, define your organization’s or program’s inputs, activities, outputs, outcomes, and impact by answering the questions below:

• Inputs: What are the resources you have available to invest in your activities?

• Activities: What are the actions you will take to bring about a desired outcome and impact?

• Outputs: What are the direct, quantifiable products of your activities?

• Outcomes: What are the immediate, short- and medium-term effects of your activities?

• Impact: What are the long-term effects of your activities?

Additionally, when building your framework, consider what you hope to gain from measuring impact. As mentioned above, there are numerous benefits to impact measurement. Whether it’s refining a tool or approach, making decisions about a program, establishing a baseline, or telling a story to funders, consider which benefit is most important to your organization?

2. Determine Specific Measurements and KPIs

With your framework set, you can then determine the specific measurements and KPIs that accurately reflect your organization's holistic impact and the particular outcomes, outputs, activities, and inputs that go into it. Using your answers to the questions above, consider what data you’ll need to collect.

Each data point you track should connect to a specific step in your framework. In other words, each data point should offer an observable, quantifiable answer to one of three corresponding questions:

• “What was done?”

• “How well was it done?”

• “Who is better off?”

Thus, depending on your framework, you might consider using some (or all) of the following qualitative and quantitative metrics:

• Number of constituents served

• Services delivered

• Percent of constituents demonstrating new behavior or skill

• Number of constituents returning for treatment

• Cost of services

• Participant feedback

• Constituent demographics

• Community support/awareness

• Average gift size

• Fundraising return on investment

• Donor growth

• Volunteer attendance

• Volunteer to donor conversion rate

However, a single metric does not an impact make. When measuring for comprehensive impact, never rely on one single metric. Instead, select a variety of indicators that offer a range of perspectives and insights.

3. Create Processes & Train Staff

Before jumping into collecting data and tracking your KPIs, it’s crucial that you develop a system of processes and procedures to train your staff on how to follow them. How you collect data is just as important as (if not more so than) the metrics themselves.

Thus, effective processes and staff training consist of more than a long, one-time email to all of your staff members that few will read or retain. Instead, you should build an impact-centric organization culture:

• Choose technology that is easy for staff to use.

• Plan an initial, thorough training that gives staff hands-on practice.

• Record all data-related processes in an accessible, living document.

• Host regular ongoing trainings on data best practices.

Ultimately, accurate data collection is crucial to accurate impact measurement. In order to gain staff buy-in, give them the tools to leverage data in real-time. Showing them the importance of data collection is crucial not just for long-term organizational planning, but also for their making decisions on a daily basis.

4. Collect Data

While it may seem like a pivotal moment in the stages of impact measurement, data collection is not a single, one-and-done activity. In fact, data collection is ongoing and never really ends.

Depending on your impact measurement processes, the data you collect will likely come from a variety of sources. These may include:

• Interviews

• Surveys

• Assessments

• Observations

• Third-party providers

Because you’ve done the pre-work to connect your metrics to your impact, the data you collect should point directly to the impact you’re making.

Historically, nonprofits have spent exorbitant amounts of time and money collecting and analyzing impact measurement data by hand. However, today, there are impact measurement tools that automate the collection process and make measuring impact easier and more efficient.

5. Share Across Your Network

Finally, in order to truly benefit from measuring your nonprofit’s impact, you need to communicate your impact measurement results with stakeholders—your funders, donors, board members, volunteers, and constituents. Leverage your data to show your successes alongside the opportunities for additional support.

While a good first step is to share this impact via an annual impact report, nonprofits who leverage tools to constantly communicate impact can quickly adapt and respond to internal and external changes. As a result, they can serve more constituents, improve operations, increase revenue, and strengthen relationships.

However, these five steps are just the tip of the nonprofit impact measurement iceberg. To gain the most meaningful results, pair each step with the best practices collected below.

Nonprofit Impact Measurement Best Practices

In many cases, nonprofits will begin an impact measurement program only to get stuck several times until they stop entirely, hitting one hurdle after the next as data becomes siloed and inaccessible.

But this doesn’t have to be your nonprofit’s experience. Implementing the following best practices can help you avoid the common challenges and pitfalls of impact measurement and streamline processes:

• Evaluate consistently. For many nonprofits, by the time performance measurement results are processed and shared, their core data is already out-of-date. To ensure maximum impact, nonprofits should regularly collect, evaluate, and share their impact measurement data in real-time.

• Be clear about outputs and outcomes. Before collecting your data and measuring your impact, it’s crucial that you make sure that your KPIs actually measure what they’re intended to.

• Work collaboratively. Instead of existing in silos, share data with and collect input from your team, constituents, funders, and partners. Moreover, by creating a continuous feedback loop, you can report on impact in real-time, receive strategic guidance from stakeholders, and grow your impact.

To quickly and easily put these best practices to work, consider leveraging an all-in-one impact measurement solution. SureImpact’s user-friendly impact measurement platform helps nonprofits, collaboratives, and foundations, to standardize metrics, securely collect data, and collectively measure and share impact in real-time.

Additional Resources

If you found this guide helpful and want to learn more about impact measurement and assessment, take a look at the following resources:

• The Ultimate How-To Guide to Social Impact Assessment. In this ultimate guide, see how nonprofit impact measurement fits into the larger social impact assessment process.

• Back to the Basics of Impact Measurement. Want to learn more about all things impact measurement? Download this free eBook for an in-depth review.

• Why a Measurement Roadmap Is Key to Your Organization's Success. Follow these steps to develop a clear measurement roadmap for your organization's future.