But, there are 1.1 million 501(c)(3)’s in this country so how do you know if you are the best? Even if you are the best, could you be better? What would it look like if you were better? What do you need to do to be better? To be a successful nonprofit means more than having the ability to raise money. successful also means having the ability to demonstrate effectiveness and improving upon it.
The 4 fundamentals to a successful nonprofit:
• Financial Sustainability
• Effectiveness of Management
• Community Engagement
• Program Performance
How are you doing with all these? How does your organization compare to other organizations doing the same programs? How is your organization doing compared to prior years and how much better do you want to be?
If you can measure it, you can manage it
Tattoo this on your forehead. For-Profits make a profit, Non-Profits make a difference. So how do you measure the impact you are making on your community? To get answers to all these questions you need to establish common metrics that gauge relative performance.
This is called benchmarking; the systematic, continuous process of measuring and comparing an organization’s business processes against leaders in your field (external) as well as within your organization (internal) to gain insights that will help the organization take action to improve its performance.
The term was first established by land surveyors who needed to mark a fixed reference point in order to measure distances. To benchmark, you need to first establish a point of reference known as a baseline, your actual or current level of results for a particular performance measure. The benchmark is your desired level of results for a particular performance measure.
Why do Benchmarking
The potential of benchmarking is tremendous. Benchmarking can help your organization stimulate innovation, increase the impact of your mission, reduce expenses, uncover hidden weaknesses, inspire staff and board members, impress funders, attract board members, improve your public face and, help to focus more on the mission of your organization.
Getting Started
• Assess whether your organization is ready and willing to undertake benchmarking.
Does your organization really want to improve or continue to just survive?
• Identify what you want to improve.The key is to fix the right thing. Perhaps your organization wants to get more grants, have more money in the bank at the end of each month, grow your revenues by not only keeping your current donors but obtaining additional donors, or perhaps you identify another need in your community and want to add a new program. Board member turnover and attendance at meetings may also need improvement.
• Form a Benchmarking Team to take charge, gather resources, write the benchmark plan and determine deliverables of the plan.
Don’t try to measure everything! Start with some simple goals. Go for the low-hanging fruit instead of drinking from a fire hose. For outcomes that are more concrete and measurable start with the financial information. Go for the program outcomes once you get the hang of benchmarking. Make sure your financial information is credible. Inaccurate financial information will cause you to merely spin your wheels. As Ronald Reagan said, “trust by verify”.
But we’re too small to undertake Benchmarking
There is no whining in the nonprofit arena. Benchmarking doesn’t have to be complex, time-intensive or a waste of money doing the wrong thing.
• Use volunteers within your organization and outside such as SCORE
• Use your Board to spearhead the benchmark efforts
• Do benchmarking instead of your strategic plan which usually has the same priorities and goals but benchmarking will produce greater precision measures
• Try focusing on improving just 1 thing
• Collaborate with peers
• Write a planning or capacity building grant to fund the benchmarking process
• Focus on improving management to eventually increase your impact
The work of nonprofits is critical to the wellbeing of communities. Get started today on elevating your nonprofit and making it thrive. Society needs you.
Chris Telfer CPAchris@fowlertelfercpa.com 109 NW Greenwood Ave.
541-389-3310 www.empoweringthepurpose.com.
