For Good Measure

Many nonprofits do a lot of good, but they don’t always have the numbers (or other measures) to prove it.

That’s increasingly changing, however. One sign of this is a new book called More Than Good Intentions: How a New Economics Is Helping to Solve Global Poverty, which, according to one favorable review, highlights “rigorous evaluation methods akin to clinical research to test poverty solutions, both old and new.”

Another sign is the launch of a sector-wide initiative called Charting Impact, which is devoted to helping nonprofits think in more results-oriented terms.

For Peter Drucker, measuring results was an essential part of effectively running any organization, including nonprofits. But the emphasis must be on impact, not on activities or processes. “Measurements need to be measurements of performance rather than of efforts,” Drucker stressed in his 1981 book Toward the Next Economics. “It is not adequate, indeed it is misleading, to use measurements that focus on efficiency of operation, rather than on the services the agency delivers to somebody outside.”

And yet, as Drucker knew so well, all too many social-sector organizations tend to get blinded by their noble aims. “There is a temptation to say: We are serving in a good cause. We are doing the Lord’s work. Or we are doing something to make life a little better for people and that’s a result in itself,” Drucker wrote in Managing the Nonprofit Organization. “That is not enough…Good intentions only pave the way to Hell.”

Drucker recognized that devising truly telling metrics at many nonprofits–where “changed lives . . . is the bottom line”–is no easy thing. And still, he asserted: “It can be done. . . . Indeed, results can even be quantified, at least some of them.”

[EXPAND More]Then, as now, this wisdom wasn’t always affectionately received. “For many organizations in the nonprofit sector, to be specific about results is still odious,” Drucker observed drily. “One sometimes has to remind them of the Parable of the Talents in the New Testament: Our job is to invest the resources we have—people and money—where the returns are manifold. And that’s a quantitative term.”

What do you think: Are nonprofits getting better at measuring their impact? 

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