12 outcomes to measure and communicate for a successful nonprofit annual report
What if the CEO of corporation X refused to report profits in their annual report to shareholders? He would be seeking a new job in 2015, right? Just like this hypothetical out-of-work CEO, for too long nonprofits have got away with leaving their true profit out of their annual reports. The bottom line for a nonprofit is more than the difference between dollars raised and expenditures. The true profit of a nonprofit should be measured in outcomes: how is the organization changing lives and changing circumstances? Your profits, which should be included in your annual report, are measured in a higher quality of life, increased job creation, stronger communities, etc.
Like corporations, the nonprofit sector has a responsibility to achieve a high return for investors. You do this by producing outcomes for your target populations and creating more efficient organizations. Are you fulfilling this responsibility by measuring and demonstrating your organization’s reason for existence in your annual reports?
Measuring and communicating your impact and value doesn’t have to be difficult, expensive, or time consuming, yet it has to be done. Below are twelve common outcome measures to spur action. For your next annual report, consider moving beyond counts of program participants and activities. Start sharing your true impact and value by measuring some of the items on this list found in my book, Impact & Excellence.
Twelve outcomes to include in your nonprofit annual report:
1. Increased knowledge and learning
What percent of participants increased their skills and knowledge as a result of your program or service? This is measured by a simple pre-post test.
2. Changed attitudes
What percent of participants improved their attitudes as a result of your program or services? This can be reported by ratings from the participant, parent, teacher, co-worker, employer, counselor, etc.
3. Increased readiness
What percent of participants are meeting the minimum qualifications for the next level? This can be measured by giving a skills and knowledge test that include these next level concepts or skills. Also, you can assess this using an attitude survey.
4. Reduction of undesirable behavior
What is the incident rate of undesirable behavior after the program? This is measured by relapse, recidivism, or self-reported behavior frequency. The smaller the better for this measure.
5. Increased desirable behavior
What percentage of participants achieved the desired goal? This is measured by predetermining the goal and recording success after a set period of time.
6. Maintenance of new behavior
What percentage of participants moved to the next level or do not reenter the program or system? This is simply measured by tracking those individuals that move or reenter.
7. Increased social status
What percentage of participants improved or developed new positive relationships? This is measured by observation or self-report items.
8. Increased economic conditions
What percentage of participants retained employment, moved to permanent housing, increased income, etc.? This is measured by self-report or observation measures.
9. Increased health conditions
What percentage of participants reduced incidence of health problems? This is measured by self-report or review of medical records, etc.
10. Reduction in administrative costs
What percentage of funds are budgeted directly to the population you serve? This is measured by dividing administrative costs by the total budget and comparing that percentage to previous years.
11. Increased economic development
How many jobs did your organization create? This is measured by calculating the jobs created and the total dollars injected into the economy.
12. Participant, employee, and/or stakeholder satisfaction
What percentage of your participants, employees, and stakeholders are satisfied with your organization and the services you perform? This is measured by a satisfaction survey or focus group.
Not all twelve of these measures will be right for every organization, but you should find at least three that are appropriate. Plan to implement a few of these measures to more successfully demonstrate and communicate your return on investment. In your annual reports, don’t leave your investors wondering about the impact of their investments. They may move on to other organizations that are committed to making and proving real change.