How Linking Dollars to Outcomes Helps Nonprofits Succeed
Nonprofit

Industry Insights: How Linking Dollars to Outcomes Helps Nonprofits Succeed

By Cheryl Gipson, Social Impact Product Manager

In short:

  • Dollars to outcomes, or dollars to mission, is a metric that links donations to real-world results
  • Tying sustainability to long-term outcomes enables nonprofit leaders to confidently ask for support
  • Low overhead is fortunately no longer the defining benchmark for effectiveness

Nonprofit leaders — along with Candid, Charity Navigator, the Better Business Bureau Wise Giving Alliance and other watchdog agencies — are pushing back on effectiveness metrics based on low overhead rather than real-world results. A better way to quantify success: Dollars-to-outcomes measurements, in which finance, program and fundraising teams provide data that funders may use to assess program risk and benefits.

To link dollars donated to outcomes achieved, take these three factors into consideration:

  • How much have we raised for this program vs. the cost to run it?
  • What are the immediate results of this program?
  • What are the trendlines of this program over several years?

By showing a direct link between donations and positive impact, nonprofit leaders can make the case to stakeholders for not just continued funding as we enter the most giving time of year, but mission expansion.

So, do I see leaders embracing new ways to evaluate mission impact?

Our recent Connecting Dollars to Outcomes survey of 353 nonprofit executives shows positive movement toward new technologies, unified datasets, measurement tools and funding models to help understand the infrastructure needs of nonprofits. That’s a start.

Are you ready to start quantifying your program and financial outcomes so you can correlate service delivery to financial data?

A great place to start is NTEN, the nonprofit technology membership hub. It offers peer advice as well as in-depth courses, including one on data-driven fundraising.

You might also encourage your team to watch documentaries by nonprofit outcomes expert Kate Robinson. Failing Forward — On the Road to Social Impact profiles LifeWorks, an organization working to end youth homelessness in Austin, Texas, while Robinson’s Saving Philanthropy — Resources to Results reveals lessons from social service organizations that do an excellent job of tracking progress toward meaningful outcomes for their target populations.

Bottom line, how nonprofit executives evaluate mission effectiveness — whether you’re measuring outcomes to determine the efficiency of your programs and whether you correlate mission data to financial metrics to understand your dollars-to-outcomes stance — is important to serious supporters. Nonprofit executives who are not advocating for this model may put the mission at risk.

How Linking Dollars to Outcomes Helps Nonprofits Succeed

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