Measuring Effectiveness
- 2. Your organization deals with many challenges presented by internal and external accountability demands. You are always looking for ways to improve operations, to anticipate and be more responsive to competitive pressures, and to define meaningful performance goals that render your work concrete in stakeholders’ eyes. Creating a dashboard or scorecard can help. A dashboard can be an excellent tool for focusing board and CEO attention on what matters most. It can help overcome asymmetry between the precision of financial and mission measures.
- 3. This tool can be used to help Depending on your organization’s size and shape, you build a scorecard or you may wish to build a dashboard by: dashboard for your using ideas from all levels of the organization organization. Indicators and then choosing among the ideas to create should be a mix of internal the most meaningful set of measurements, or and external measurements. assigning a select team representing Selection of the indicators is artistic/program, finance, operations points of guided by what your views to create a prototype for review, organization seeks to discussion and adoption accomplish. And, measures can be grouped such as financial, mission This is an iterative process so allow time for the achievement, operational indicators to be identified and vetted before excellence, and customer building version 1.0 of your dashboard. After you satisfaction to map onto the use the dashboard for a time, it is quite possible goals of the organization. that you will want to adjust or change some of the indicators.
- 4. The following slide contains a short video by Peter Frumkin in which he discusses the importance of measuring multiple dimensions of organizational performance. Watch the video with your team and then work through this exercise together.
- 5. 1. Start with clear understanding of what your organization wants to accomplish. If you have a working logic model, use selected outputs and outcomes to define critical impact indicators 2. Choose a small number of significant financial indicators and ratios 3. Define a limited group of metrics related to governance, staff professional development, and volunteer engagement 4. Define key indicators of quality 5. Create a visual representation of the organization’s performance measures – your dashboard
- 6. If you have a clear description of what your organization seeks to accomplish, use this information to guide your discussion and selection of measures you will track for your dash board. Alternatively, you can use a logic model focusing on the outputs and outcomes. For more information on logic models, watch this video.
- 7. Which financial indicators are most meaningful and how will you represent those? Examples include: Profitability measures Artistic or programmatic reserves Liquidity Financial vulnerability Efficiency Resource diversification
- 8. Stakeholder Group What matters that you can measure Clients and customers Satisfaction; frequency of attendance; use of materials… Volunteers Level of engagement, numbers, retention Individual donors Number by giving category and trend over time Foundations Impact on community Corporations Size of audience Partner organizations Accomplishments to date Staff Professional development, retention Board members Level of engagement Complete your own chart.
- 9. Think about program and operations and what quality means. Some examples: What metrics tell the quality story? How good are the operational systems? What is the error rate? What operationally is the organization’s strong suit? Where does it need to improve?
- 10. Using your chosen indicators, create a snapshot of the organization. For examples, see: http://www.blueavocado.org/content/nonprofit- dashboard-and-signal-light-boards http://www.compasspoint.org/dashboard
- 11. Thank you for taking the time to work through this exercise with your team. These online lessons are a bit of an experiment for us. As we learn more, we will continue to adapt and refine them. Your feedback is vitally important. Please let us know how you used this tool. What was unclear? What would you add? We look forward to hearing from you. Thanks, The NAS Team