If not, then revise the mission to ensure it is fit for purpose, and reflect that in an updated mission statement.

^* There can be a fine line between an organization’s vision and an ambitious purpose, which is probably why many nonprofits don’t bother to define their vision.

^† The best statements of purpose “begin with a verb (like ‘reduce’ or ‘protect’ or ‘make’) and then a description of the problem you want to address or the conditions you want to foster.” Alison Green and Jerry Hauser, Managing to Change the World (Washington, DC: The Management Center, 2009), 61.

^* This is the purpose of Grameen Bank, based in Bangladesh, which received the Nobel Peace Prize in 2006 jointly with its founder, Muhammad Yunus. See “Vision and Mission,” Grameen Bank website, accessed, February 13, 2023, https://grameenbank.org.bd/about/vision-mission.

^* I did give thought to updating our mission statement in advance of publication of this book but decided that highlighting that it was a little out of date was better reflective of our reality, and that of many other nonprofits.

^* See Kim Jonker and William F. Meehan III, “Mission Matters Most,” Stanford Social Innovation Review, February 19, 2014. They go further in this and an earlier article, “Curbing Mission Creep,” Stanford Social Innovation Review, Winter 2008, and outline “the seven characteristics of a well-honed statement of mission: It is focused. It solves unmet public needs. It leverages unique skills. It guides tradeoffs. It inspires, and is inspired by, key stakeholders. It anticipates change. And it sticks in memory.” This is a lot for a mission statement to deliver.

^* Crisis Group does now have a written mission statement. Its purpose is to work “to prevent wars and shape policies that will build a more peaceful world.” And its mission: “Crisis Group sounds the alarm to prevent deadly conflict. We build support for the good governance and inclusive politics that enable societies to flourish. We engage directly with a range of conflict actors to seek and share information, and to encourage intelligent action for peace.” International Crisis Group website, accessed May 23, 2023, https://www.crisisgroup.org/who-we-are.

^* Often a mission statement is simply a statement of purpose, which can be confusing given these are labeled “mission” statements. There is nothing necessarily wrong with limiting your statement to purpose if you are clear about that purpose, though readers will have to look elsewhere for specifics of what you actually do. Too often, however, the description of purpose is too broad to be of any use. For example, CARE USA says its mission is to “work around the globe to save lives, defeat poverty, and achieve social justice.” This statement could apply to pretty well any international humanitarian or poverty alleviation organization. It certainly doesn’t tell you what CARE actually does, and it won’t help you assess whether CARE is successful in what it is doing. It likely doesn’t help CARE staff in understanding what they do either.

^† On how to write a clear mission statement, see Erica Barnhart, “Great Mission. Bad Statement,” Stanford Social Innovation Review, January 15, 2016, https://ssir.org/articles/entry/great_mission._bad_statement.

^‡ Most organizations put their mission statement on their website. Many describe their purpose and mission in the “About Us” section of their website, without specifically labeling them as such. Mission statements can usually also be found in the opening section of an organization’s strategic plan.

CHAPTER 2

Impact

Identify and Measure Change

A great organization is one that delivers superior performance and makes a distinctive impact over a long period of time.

—Jim Collins¹

As soon as the Freedom Fund launched, I started having lively discussions with our new board members on what “impact” meant for the organization. Given we are an anti-slavery organization, one of the first impact goals the board agreed on was a target for “lives liberated” from slavery and trafficking, i.e., how many people we directly helped exit situations of extreme exploitation. This goal has the merit of being a fairly clear metric—in most cases, it’s straightforward enough to work out whether someone is in a situation of modern slavery or not. But the problem with a metric like this is that it doesn’t really tell us whether we are contributing to a genuine reduction in the levels of slavery and extreme exploitation in the regions where we operate, which is the change we really want to see.

Take a group of villages in northern India where child trafficking is endemic due to desperate poverty, caste and religious discrimination, and weak rule of law. Vulnerable girls are often coerced into domestic servitude or trafficked into brothels, and vulnerable boys are forced to work in brick kilns and stone quarries or factories. Say that over five years, by partnering with local community organizations, we helped liberate five hundred children from trafficking in those villages. That’s a big figure and may sound like success. But what if one thousand other children had been trafficked into slavery during that same period, meaning that child trafficking in those villages actually increased? Was that success, failure, or something in between? The overall level of trafficking has increased, but perhaps it would have been even higher if not for our intervention. But if our impact is being evaluated by a measurable reduction in the prevalence of slavery, then clearly this is a failure on that metric.^*

All of this goes to show that determining what counts as impact can be challenging. Or rather, there can be various types of impact. If you are liberated from slavery, that certainly is impactful for you and your family. But perhaps not for the community if overall levels of exploitation stay the same, or even increase. The way we agreed with our board to address this is to measure different types of impact—at the individual level, at the community level, and at a broader “systems” level—each with its own target. We’ve continued measuring in this way since, refining our efforts along the way.

Every nonprofit I have worked for has had clarity about its purpose and mission and the change it wanted to help bring about. But every one of them, including the Freedom Fund, has struggled to come up with ways to effectively measure just how much progress it was making in achieving that change.

The Sail Training Association of Western Australia could readily count how many young people had taken leadership courses on the Leeuwin but, beyond that, struggled to assess the extent to which it had “enriched” their lives, and how many lives it should aim to enrich to fulfill its purpose.

Crisis Group could accurately measure how many reports it published each year on deadly conflict, and how many advocacy meetings it held, but was not able to assess the extent to which it actually influenced policymakers (beyond scattered anecdotal accounts), let alone the extent to which any such influence reduced the occurrence or duration of conflicts.

Girls Not Brides, a nonprofit dedicated to ending child marriage around the world, and on whose board I served for many years, is a membership organization whose mission is to serve its many hundreds of member organizations and to mobilize their collective expertise and power to drive change. But beyond recording how many members it had, it struggled to assess how effectively it contributed to a reduction in child marriage.

The takeaway is not that these organizations were poorly led or ineffective. On the contrary, they are among some of the best-led nonprofits I have come across. Rather, the lesson is that measuring something as potentially amorphous as “change,” however defined, can be a real challenge to even the most effective organizations. But it is a challenge leaders need to embrace.

In this chapter we will look at why impact is central to everything nonprofits do. We will explain what impact is and how it differs from other related concepts, such as inputs and activities. We will explore why a better understanding of impact will allow your organization to become more effective in driving the change it seeks to bring about. And we will finish up by confronting some of the obstacles to better understanding and measuring impact.

WHAT IS IMPACT AND WHY IS IT IMPORTANT?

Given the centrality of impact to the work of nonprofits, leaders should ensure that there is a clear understanding throughout their organization of the impact that it seeks to bring about, and how progress will be assessed.

There is often confusion, even among experienced nonprofit leaders, about what is meant by impact and exactly what needs to be measured. As a result, nonprofits often measure the wrong things. Some purport to measure their impact by tracking funds raised or spent on their running costs, the number of members recruited, how many reports they published or conferences they convened, website traffic, or “beneficiaries” served, e.g., with meals, shelter, health, or education services. These may all be useful metrics for operational or programmatic purposes, but they are not good measures of impact, as they are not measures of change. Rather, they are measures of the resources committed to running the organization, i.e., its overheads (often called inputs) or its activities (often called outputs).^*

The best-in-class way to identify and measure the impact you want to achieve is to focus on the outcomes your work has contributed to—i.e., the actual changes that come about after your activities have taken place, such as education levels increased, poverty or vulnerability reduced, rights protected—and then assess the extent to which those outcomes can be linked to your activities.

Given that impact is such a central concept for nonprofits, I’m going to explore it in some detail. Impact is like financial returns for businesses, and you can be sure that successful business leaders have a very clear idea of what financial returns they are seeking to achieve. They relentlessly measure their business’s financial performance, and are assessed on that performance. They also are clear about the difference between a business’s inputs (staff costs, research and development, sales and marketing), its activities (goods manufactured, services provided), and its outcomes (financial returns). Successful nonprofit leaders need similar clarity and discipline about the impact they are seeking to achieve.

Even though the focus should be on outcomes (i.e., change), you should still also measure your organization’s activities, as this is usually an important first step on the way to measuring outcomes. For a start, if you can’t count how many people you have served, students you have taught, or reports you have published, then you probably aren’t managing your program well. Or perhaps you are counting these activities, and realize that you’re not doing as many things or reaching as many people as you anticipated. That will indicate that your program is unlikely to have the outcomes you were expecting, without you having to go the extra mile and measure those outcomes: if you serve half the meals you anticipated or teach half the students you intended, you probably aren’t going to reduce hunger or increase education levels to the extent forecasted. But you shouldn’t mistake activities themselves for impact.

EXAMPLES OF NONPROFIT “INPUTS” AND “ACTIVITIES”

Look at the impact statements or annual reports of many nonprofits, and you will often find statements about their inputs, such as fundraising, or their activities. These may be important metrics, but they are not in themselves measures of impact. For example:

“Millions of volunteers enable 221 million meals to be delivered to 2.4 million seniors each year.” —Meals on Wheels America [activities]²

“The world’s largest platform for social change, with over 329 million users globally.” —Change.org [activities]³

“Heritage [Foundation] experts appear on television and radio dozens of times each week, publish hundreds of policy research reports annually, and host hundreds of meetings a year with grassroots leaders and local and national officials.” —The Heritage Foundation [activities]⁴

“Nearly 85% of our revenue directly benefits our clients. 11% of our revenue is used to operate our programs and only 5% of our revenue is spent on fundraising.” —Ali Forney Center [inputs]⁵

Examples of outcomes include a reduction in homelessness or hunger and improved education and health for the target population. These may be changes for which your organization can claim direct responsibility, like reducing hunger through the provision of meals, improving students’ academic performance through tutoring, or stopping evictions through legal support. But you may also contribute to impact that feels more indirect: changes to legislation, changes in cultural norms (e.g., promoting the importance of girls’ education in countries where it is not the norm), or otherwise playing a role in shifting complex social, political, or economic systems. (See more on “systems change” later in the chapter.)

Focusing on impact is how your nonprofit holds itself accountable to its key audiences: primarily, those you serve, and your donors and staff. Ideally, you have an idea of the outcomes you want to achieve over, say, three to five years, and you can then set targets and track your progress. Doing so allows you to measure your performance, and it helps you to better allocate resources to achieve the greatest change. However, this is not always possible when you are starting a nonprofit or a new program and don’t have enough information to set robust targets. In this case, you may want to set provisional targets, or just measure impact as you go along, until you have a baseline against which to set targets for future years.

In the ideal scenario, you possess a clear and measurable mission, well-defined and-aligned targets for the impact you seek to achieve (directly or indirectly), and the resources necessary to drive your efforts and measure your progress toward those goals. But aligning all three components is genuinely hard. However, even well-positioned nonprofits can do better at setting and measuring goals for and measuring impact. The investment is worthwhile because, done well, your organization will have a greater chance of delivering the change it seeks to bring about.

CASE STUDY

What Great Impact Looks Like

One truly impressive example of nonprofit impact is that of the National Foundation for Infantile Paralysis (NFIP), later rebranded as the March of Dimes, which played a central role in largely eliminating polio in the US.

In the 1930s, polio caused paralysis in hundreds of thousands of victims, mostly children, each year, including thousands in the US alone. The NFIP was founded in 1938 by President Roosevelt, himself an adult victim of polio. Its mission was “to lead, direct, and unify the fight” against polio. Central to NFIP’s mission was funding research into a vaccine for polio. Among many other initiatives, NFIP funded the efforts of a young Dr. Jonas Salk to produce a vaccine and then conduct a massive controlled trial on two million children in 1954. Those efforts proved successful, and the Salk vaccine was approved for mass immunization throughout the US in 1955 through a campaign heavily promoted by NFIP. Within two years, polio cases had been cut by 90 percent. The disease was largely eliminated in the US by 1961 and fully eliminated there by 1979.

Note that NFIP’s mission wasn’t to eliminate polio but rather to play a leadership role in the fight against it. NFIP went above and beyond what was already an ambitious mission. This is one of those happy situations where the impact of a nonprofit (working with many other partners, including the US government) well and truly exceeded the expectations set by its big mission.^*

THE BENEFITS OF MEASURING IMPACT

Measuring impact effectively can be hard, so you may well ask yourself: Why should we bother when we can get by on measuring activities, such as reports published or meals delivered? Or by preparing selective, feel-good case studies as evidence of impact? Why go the extra mile, especially if it will consume precious funding and staff time? These are fair questions.

Measuring activities is useful, and often a precondition to measuring outcomes, but the investment in measuring your actual impact (i.e., outcomes) can be a force multiplier for your work in a number of ways.

1. Understanding What Works and What Doesn’t

When you know what works most effectively, you can allocate your resources accordingly, generating more impact for the funding available. You may decide to reallocate funding to more successful initiatives, or drop or retool initiatives that are not proving as effective. Good evidence gives you the tools to invest your resources more efficiently. This is the most important reason to invest in rigorous impact measurement. Successful businesses have the discipline of the financial bottom line, so are constantly assessing which of their initiatives are profitable and which are not, and adjusting behavior accordingly. Nonprofits should bring a similar discipline to their performance, but based on impact, not profit.