Impact measurement in the social sector is broken.
In the private sector, businesses rely on customer demand and customer satisfaction metrics to guide strategic investments and measure success. That helps them align their own growth with the demonstrated needs of their audience.
However, in the social sector, organizations almost exclusively use informational and vanity metrics to measure success—like total revenue, individuals served, meals distributed, or events hosted. Unfortunately, those indicators tend to paint a picture of organizational success, rather than examining the level of value creation for community members.
If nonprofit missions are to succeed in empowering people to flourish we must improve the way we define and measure impact.
At Stand Together Foundation, we’re committed to helping ourselves and our partners measure better. We’re shifting the impact measurement paradigm to focus on real results, rather than impressive organizational milestones. We believe that by integrating customer-focused metrics, we can understand the true value that nonprofits create and, over time, build a movement of impactful nonprofits serving individuals as their core customers.
Here are three ways we’re challenging the status quo for impact measurement.
- Rolling out the Impact Measurement Platform
Our Impact Measurement Platform is a new framework for evaluation that targets the three levels of transformative impact that our Stand Together Foundation community is focused on: personal, organizational, and community transformation. We are building custom indices to address each level, with specific metrics to show total poverty systems transformation.
The first of these indices is the Personal Transformation Index, which has been deployed for testing and refinement with our Catalyst Partners. The Personal Transformation Index asks participants in a nonprofit’s program to describe their own experience of transformation, rather than assuming that the program is working as intended. The second index is the Catalyst Transformation Index, which we are currently developing alongside our partners to benchmark organizational success.
- Helping leaders understand their culture to drive growth
We use Market-Based Management® (MBM) as a framework to learn about the behaviors, assumptions, and expectations that permeate an organization. Specifically, we assess the health of organizations in five key areas: Vision, Virtue and Talents, Knowledge Processes, Decision Rights, and Incentive.
Using MBM with our partners creates a shared language for evaluation and invites individual team members into the process for a more holistic view. These assessments also help leaders identify issues, narrow their focus, and decide where to invest in the future.
- Developing a diagnostic tool to empower nonprofit leaders
We developed a diagnostic tool that helps identify an organization’s impact and insights capability and more quickly understand its key capabilities. This tool enables us to empower organizations with clear next steps for growth and gives our Stand Together Foundation team the right information to create game-changing products and services to help them.
Key categories of the diagnostic tool include a nonprofit’s defined theory of change, the volatility of its programming, its staff capacity, and its core goals.