The NonProfit Times - July 1, 2008 - (Page 13)

STREETSMART NONPROFIT MANAGER THOMAS A. MCLAUGHLIN Measure The Unmeasurable Establishing metrics that managers and donors understand anagers at for-profit companies enjoy the very real advantage of knowing exactly how they will be measured. When success or failure is determined by the stock price, judgments tend to be pretty clear, at least in the short run. Nonprofits have a by-now famous “double bottom line” of mission and margin. The latter is a straightforward calculation, but it is not terribly useful beyond being a broad gauge of future sustainability. The measurement of mission is of more interest, but how exactly does one go about measuring something as amorphous as “public benefit?” This is one of many reasons why there aren’t many good metrics of the work that most nonprofits do. Getting broad agreement on what constitutes a public benefit is unlikely, let alone getting agreement on how to measure it. But if it were not possible to settle the question of measuring public benefit, why M nonprofits in the same standard way. The only data collection tool used by all nonprofit public charities is the Internal Revenue Service’s (IRS) Form 990, which, at the moment at least, is mostly about financial matters. How can that be useful? It turns out that many of the things that the IRS asks for are enough to construct some creative markers for these three qualities. Most of them are buried in various parts of the document, but they all offer useful information that can provide insight into the desired qualities.With a little tweak here and there, they can help you document useful markers of some overall desirable qualities. Each indicator relies on two different lines in the Form 990. Below is each for- mula in words, then as the numbered lines on the 990. QUALITY WORKFORCE Employee Benefits and pension plan contributions. Employee benefits and pension plan contributions as a percentage of total salaries and wages or diStreetsmart, page 14 A good public image upholds the public’s trust, as well as fundraising capability wouldn’t it be possible to measure some things needed to provide it? The idea is to find things that can be measured and that are correlated in some way with what can’t be measured. Executives need markers that can be expected to be present when an organization is successful at achieving its mission. It’s the next best thing, of course, but at least it can provide a way to grapple with the bigger question. With that in mind, let’s take up three things that most nonprofits need to be effective in providing public benefits: • The quality of the workforce; • Public image; and, • Political capital. The need to maintain a good quality workforce in tomorrow’s world of labor shortages and restricted immigration is obvious.A good public image upholds the public’s trust, as well as fundraising capability, while political capital enables an organization to do innovative things while engaging the community as a legitimate partner. These are all reasonable desires. But, where can data like these be found? To be most effective, the data to be measured need to be universally collected from all JULY 1, 2008 THE NONPROFIT TIMES www.nptimes.com 13 http://www.theheritagecompany.com http://www.theheritagecompany.com http://www.nptimes.com

Table of Contents Feed for the Digital Edition of The NonProfit Times - July 1, 2008

The NonProfit Times - July 1, 2008 Time to Let GO Sparks Flying From Blackbaud's Bid For Kintera Holiday Jeer Contents Who...When...Where...How...What? The Wrong Arguments Calendar Measure the Unmeasureable Getting Good Advice We Barely Got to Know You Special Report: Giving USA Shows Bequests, Foundations Boosted Otherwise Flat Giving to 306 Billion Dollars National Benchmarking Nothing Is Forever Diversified Planet Business Briefs NPT Jobs Resource Directory Bridge Map Insert

The NonProfit Times - July 1, 2008

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