not-for-profit dashboard indicator
Whitepaper

Demonstrating impact with the right not-for-profit dashboard indicator

Not-for-profit dashboards are the final component of any effort to track outcomes. After identifying what KPIs to track, and how to track them, not-for-profit dashboards offer a means to put those metrics to work on behalf of the mission, but the trick is knowing which not-for-profit dashboard indicator to display.

Two ways to think about success

Not-for-profits are successful two ways: by carrying out the mission and by funding it. The work they do needs to have a meaningful, measurable impact. Simultaneously, their fundraising and financial management needs to sustain the mission. Equally important, a not-for-profit can’t be called successful unless it excels on both these fronts:

Program outcomes

These metrics track if programs are working to carry out the mission of the not-for-profit. Some examples include:

  • The number of meals served by a not-for-profit that fights hunger.
  • The amount of debt reduced by a church that teaches personal finance.
  • The number of books distributed by an organization that advocates literacy.
  • The growth in attendance at a camp for under-served kids.
  • The increase in new projects launched by any not-for-profit.

The key is to focus on metrics that relate directly to the mission - both its immediate goals and overarching objectives. Identify the work that matters most, then find out if it’s working.

Financial outcomes

These metrics track if a not-for-profit has the financial resources to sustain itself into the foreseeable future. Get a critical perspective on financial performance with metrics like these:

  • Program Efficiency = Total program services expenses / total expenses
  • Revenue Per Member = Member revenue / member count
  • Fundraising Efficiency = Unrestricted fundraising expenses / total unrestricted contributions raised
  • Working Capital Ratio = Working Capital / Average Total Expenses
  • Liabilities to Assets Ratio = Total Liabilities / Total Assets

Start thinking about which program and financial metrics speak the loudest about your own success.

A reminder about donor trust

A study from the Journal of Accounting, Audit, and Finance showed that not-for-profits with a seal of transparency from Guidestar, a charity evaluator, increased their donations by 53%. People are enthusiastic to support causes they believe in, but first they need to believe in the not-for-profit too. That’s where not-for-profit dashboards come in.

With the right dashboards, not-for-profits can monitor outcome metrics to understand their own performance, then make targeted changes or improvements as necessary. In that way, dashboards help deliver the positive results that funders, volunteers, staff, and program participants all hope for. Another advantage of a not-for-profit dashboard, when properly implemented, is the ability to highlight outcomes in an instant. When someone wants to know how program participation is trending, for example, that information is available on demand – an example of the kind of transparency expected of not-for-profits.

Finally, when a not-for-profit has dashboards that incorporate the right financial and operational metrics at its disposal, it has other advanced ways of utilizing data and leveraging outcome metrics. Financial reports for not-for-profit boards, for instance, are simple to produce when all the data already lives on the same platform. The same goes for program performance audits or disclosures about financial management. If data can feed into a dashboard, it can serve any purpose, including the most important of all: running a not-for-profit that people trust.

Making success the message

As not-for-profits gain a better understanding of their performance – informed by the right KPIs for not-for-profits and outcome-focused dashboards – they can make success a bigger part of their message. Instead of emphasizing who they serve and how, they can shift the focus to the results they achieve and why. Whether your not-for-profit wants to make outcome metrics the centerpiece of your fundraising strategy or just a component, it takes data – fully integrated, automatically updated, intuitively organized, and carefully analyzed. Without it, and without the not-for-profit dashboards to provide insights, a not-for-profit is basically flying blind.

Allison Webb
Director, CPA
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