Every industry has been impacted to some degree by the COVID-19 pandemic. For the not-for-profit sector, it’s never been a more critical time to ensure we are still able to deliver on the promise of our missions.

With such uncertainty, there are methods you can use to clearly demonstrate your not-for-profit’s effectiveness—to your funders, constituents, community, and charity evaluators. Outcome metrics is the key to delivering this visibility.

Amid increasing demand for transparency and accountability, today’s not-for-profit organisations are seeking ways to both produce and demonstrate successful outcomes. In our digital, always-on world, not-for-profits require greater efficiency and managerial visibility so that they can respond rapidly while continuing to drive down cost.

When it comes to financial management, not-for-profit accounting presents unique challenges that cannot be adequately addressed with legacy systems, outdated spreadsheets or manual processes. Heightened expectations and scrutiny come from several sources—including increasingly engaged funders looking for financial management techniques and principles employed by for-profit businesses. To meet this demand, not-for-profit organisations are embracing outcome metrics to measure and report their performance.

What are outcome metrics?

Regardless of the not-for-profit—whether it’s faith-based, philanthropic, health and human services, educational, membership organisations or other—measuring and reporting outcomes has never been more critical to ensure business continuity, particularly during these uncertain times. Donors and grantors have higher expectations during a crisis such as the recent bushfires. Donations and grants come with stipulations for performance because the givers want to ensure their dollars are making the greatest possible impact on those most effected. Government funding, in particular, has strengthened compliance reporting and performance expectations.

Why outcome metrics matter

The importance of outcome metrics can be seen from a variety of perspectives and functions within the not-for-profit organisation. These include:

Funding

In a competitive environment, the ability to define, measure, monitor, and report the metrics that define success can encourage new and additional funding from donors, foundations, and other benefactors. For instance, demonstrating achievement of key milestones can unlock subsequent rounds of multi-year grants.

Accountability

Funders are increasingly tying their support to stringent accountability. They want to see where their money is going and the results that are achieved–whether it’s organisational growth and new locations or more not-for-profit partnerships and matching funds. Not-for-profit organisations must provide exceptional transparency into the organisation’s outcome metrics, controls, and reporting.

Stewardship

From development and accounting to operations and programming, the ability to define, track, and report outcome measures–showing where you are and where you want to go—will help ensure good stewardship. This, in turn, will boost donor confidence and strengthen your credibility—which supports your growth and ability to pursue your mission.

Conclusion

With intense competition for donor dollars—and funders insisting on greater accountability and visibility—not-for-profit organisations must clearly demonstrate fiscal responsibility as well as program results. Now more than ever the call for greater transparency and accountability is growing louder.